Many real estate property businesses are held by those who find themselves at a point in their lives when chasing tenants for their monthly bills is a tad too tiring. While real estate can be a truly profitable business idea, it is also incredibly demanding from the manager’s part. However, there are some strategies that could help you turn your real estate business into a passive business model and still have a great income based on it.

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Passive investments exist

If you reached the age where you want to leave on vacation, travel the world or simply relax, there is a better alternative to dealing with trash, tenants and maintenance duties. Learn About Delaware Statutory Trust and how this can help you turn your real estate business into a passive, yet highly profitable one. Tenants in 1031 investments have the great benefit that no management duties fall on their hands, but the owner will still enjoy the financial advantages of having a real estate property on their name. plus, these investments are always tax-deferred, if properly managed.

Challenges of 1031 property exchanges

As appealing as these exchanges might sound, there can appear several challenges that have to be taken into account by all investors; these also are the reason for which experts recommend that a specialised team should be found to help the investors with those.

  • Finding an appropriate exchange property within the given timeframe (45 days);
  • Successfully closing on the purchase in the given interval (180 days);
  • Securing the bank financing to cover the debt on the original property;
  • Due diligence on the property;
  • Remaining cash.

These all are big issues in the process of investing in 1031 exchange properties, and the according to the experts, these cannot be handled by the investor themselves, as they cannot enter in money’s possession at any time during the process; otherwise, this tax-deferred investment will become taxable.

A better status for the investor

The trust, creditors or beneficial owners in a DST investment cannot assert claims directly against a DST property. The owners benefit from the same liability and status as corporate stakeholders. This separates entirely the person from the investment and potential liabilities that may appear. It still does allow the owner to make a generous profit on a yearly basis, with minimal efforts.

Benefits of DST investments

Obviously, this investment strategy is popular due to a series of well-founded reasons:

  • A truly passive investment. The status and purpose of the investment mage it a veritable passive one, which means that the owner/manager doesn’t have to get involved AT ALL in the managerial process;
  • No bank will directly get involved. The reason for which this happens is that investors can always have an exit strategy and not be bound by a credit on their names.
  • No limitations. While there are rules that must be followed, generally, these investments aren’t limited in any shape or form.

These are some basics about DST investments, for those that really want a passive income strategy for their retirement years.

 

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