INVESTORS IN 1031-QUALIFIED DSTS NO LONGER HAVE THE MAJOR HASSLES OF BEING A LANDLORD.
According to the most recent study from the U.S. Census Bureau, Individual investors own nearly three-quarters of all rental properties, and two-thirds of all rental units, in the United States. 1 Assuming that half of the partnerships, LLCs, TICs and estates that own rental properties represent individual underlying owners, their share of rental ownership is roughly 87%. 2 It is estimated that half of all landlords originally acquired these properties as their personal residence. 3 BENEFITS AND LIMITATIONS OF 1031-QUALIFIED DSTS
Despite attempts to demonize landlords as a monolithic group of greedy corporate real estate moguls, a plurality of rental housing providers are simply entrepreneurial, middle-class Americans who converted a former home to a “side hustle”. Every year, some fraction of landlords will sell their rental properties to other investors or owner- occupiers. For those taxpayers seeking to retire from active ownership while deferring capital gains taxes, one increasingly common strategy is to replace a rental property with one or more 1031-qualifed properties structured as a Delaware
Statutory Trust (“DST”). In 2022, thousands of investors exchanged their properties for roughly $15 billion of 1031-qualified DSTs. 4
IN 2022, THOUSANDS OF INVESTORS EXCHANGED THEIR PROPERTIES FOR ROUGHLY $15 BILLION OF 1031-QUALIFIED DSTS.
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