Why should you consider a 1031 exchange?
- Defer paying capital gains taxes.
- Leverage.
- A properly structured exchange can provide real estate investors with the
opportunity to defer all of their capital gains taxes. By exchanging, the
investor essentially receives an interest-free, no-term loan from the
government.
- Relief from property management. The lessee takes the responsibility to
sublet and maintain the property allowing real estate buyers to avoid most of
the day-to-day management headaches.
- Upgrade or consolidate property.
- Diversify. Own multiple properties rather than just one.
- Relocation to a new area.
- Differences in regional growth or income potential.
- Change property types among residential, commercial, retail, etc.