Learning About Finance and Money
The Benefits Of Joining A DST 1031 Exchange
Jordy De Pijper
In Delaware, a DST is known as a Delaware Statutory Trust. It's often used as a legal or financial vehicle for various different purposes. Specifically, a DST 1031 is a way for multiple people to come together in a trust while investing in real estate. Why is going through this trust a good idea when getting involved in real estate in Delaware? Here are just some of the reasons why a DST 1031 might be a better idea than going it alone in the real estate rental market.
Fractional Ownership Allows You to Invest in Properties You Otherwise Could Not Afford
One reason people agree to pool their interests together in a DST 1031 is that the collective financial power of the group is much higher than any one person alone. You might not have the resources to invest in a million-dollar property on your own. But find a group of investors, and you can collectively own a piece of real estate with the exact ownership and subsequent monthly payout from tenants divvied up according however the trust is set up. This fractional ownership will allow every member of the trust to get involved in premium properties that are often rented to the kind of high-rolling tenants who are typically well-off financially and therefore a lower risk to the investment group.
It's a Great Way to Get Into Real Estate Without Dealing With Property Management
When you buy in to a DST 1031, there might not be any one person who has a majority interest in the trust. Because of this, most real estate investment groups choose to outsource the actual management of the properties to a rental management company. This will allow you to invest in the real estate market without having to deal with any of the hassles that often come with being a landlord. The management company you hire will be the one to respond to maintenance requests or chase down a late rent payment if needed.
Diversify Your Portfolio
By joining into an existing DST 1031 trust, you can even ask that your funds be put towards multiple different properties instead of just one. You will then have fractional ownership of multiple different real estate opportunities. This could help you if you believe that the real estate market might depreciate in a certain neighborhood in the years ahead but perform well in another area. The diversification will ensure that you see a healthy payout every month from the rental income without having to worry too much if one of your buildings or neighborhoods sees a downturn.
Contact someone who offers DST 1031 services today for more information
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