There’s a big difference between your run-of-the-mill real estate investor and a pro real estate investor. Pros educate themselves on varying strategies, and they plan for taxes year-round, ensuring they’re taking advantage of every opportunity, credit, and deduction that’s available.
And there’s one specific strategy I see a lot of investors overlook: the 1031 exchange. On this episode of Investing in Real Estate, you’re going to learn about how to invest like a pro by using a 1031 exchange. Click play to learn more!
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If you’re doing your due diligence and keeping tabs on your portfolio growth, it’s likely that every once in a while, you might find a dog in your portfolio. Not every investment performs the way you thought it would. Or maybe you’re just looking to get out of a particular market.
Regardless of the reason, if you’ve got a property you want to offload, a 1031 exchange was designed for you.
The 1031 exchange is a powerful tool available to real estate investors. Essentially, it allows you to sell a piece of real estate, and then roll those funds into another investment while deferring taxes. Under normal circumstances, when you sell a property, you can expect to pay capital gains. But through a 1031 exchange, those taxes are deferred.
However, I’ll admit, this is a complicated topic, but it’s well worth learning about. Going through a 1031 exchange could save you thousands of dollars.
You should know that you’ll need to work with a professional in order to correctly complete this transaction. A qualified intermediary is a professional who is trained in the 1031 process, and they will help facilitate in the entire transaction, including holding funds, preparing legal documents, and ensuring that everything is done in alignment with IRS guidelines. So don’t feel like you have to retain all of this information perfectly. You should be aware of the rules, but also know that you’ll have a pro holding your hand every step of the way.
Other than the incredible tax benefits, here are some reasons you might want to entertain the idea of a 1031 exchange, including:
- utilizing the equity in your rental property
- increasing your monthly cash flow
- diversifying your assets
- maximizing depreciation
- strategic estate planning
- expanding your portfolio
- and more!
If you like this topic and you’re hungry for more information, head over to my blog and check out The Ultimate Guide to 1031 Exchanges. That post dives deeper into the exact rules and regulations and has even further resources for you to explore.
And if you think you’re ready to act on a 1031 exchange, at Morris Invest we have a 1031 exchange program that is designed to make the process simple. Schedule a free call with our team to learn more about the benefits of a 1031 exchange and how to max out your tax benefits with rental real estate.
Episode Resources
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The Ultimate Guide to 1031 Exchanges
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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