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After years of smaller or more actively managed investments, most investors tire of the day-to-day headaches and look for something more substantial. Commercial real estate investments can provide fewer headaches and more rewards. Using a 1031 exchange can further enhance your ability to defer taxes and keep the profits in your pocket.
At its core, 1031 exchanges should be an investment strategy first, and a tax strategy second. When analyzing a commercial real estate investment, it is critical to keep your investment objectives as the primary factor. The second component is the risk profile of the commercial real estate portfolio.
Most investors choose to invest in real estate for these three reasons:
Capital Preservation
Predictable income
Inflation-protected growth
Analyzing the real estate portfolio with a professional advisor who understands your objectives, risk tolerance, and income goals is essential to making a wise investment.
Given that every investor wants to be looking to balance income with growth, how do you get there?
Quality of the asset
Quality of the income
Property and lot analysis
1031 exchanges have several caveats, requirements, and timelines that must be adhered to. Exchanging “like-kind” property is one of the requirements. As an investor with a current commercial real estate holding, the 1031 exchange will allow you to exchange your existing commercial property with a “like-kind” property that may produce more cash flow and increase the assets under management for your portfolio.
Legacy Commercial Group can show you a selection of properties that meet your needs and incorporate them into a wealth strategy that fits your portfolio. The quality of our real estate assets and the potential income can provide passive income and help you take advantage of 1031 exchange tax-deferred gains.