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1031 Benefits
 Investment Property can
be transferred from one location to another. Investors who move
can exchange for properties closer to home. An exchange also may be
a way to buy a replacement property in a site ideal for future
retirement.
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Current cash returns
can be improved without sacrificing equity. Because of retirement
or another life-style change, an investor may want a property that
produces a higher monthly income instead of the property he or she
currently owns that might increase in value over time. Exchanging
allows an investor to swap for a property that produces a higher
monthly income without incurring any current tax liability.
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Greater investment
appreciation may be gained without a large tax bill. Some
high-bracket investors may wish to for-go current income to
accumulate future equity. Using a tax-deferred exchange makes it
possible for investors to “sell high and buy low” and
keep the entire profit working for them.
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Investments can be
consolidated or diversified. Changes in an investor’s
philosophy may necessitate real estate portfolio changes.
Exchanging makes it possible for an investor to sell a group of
properties and transfer the equity into one larger piece of
property. It’s also a good tool to redistribute investment
risk among a variety of property types and locations.
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Management hassles can
be reduced or eliminated. An investment property requiring
frequent and time-consuming attention may be exchanged for one
requiring less hands-on management or one that is professionally
managed.
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