Lately, the investors are actively looking to invest in 1031 Delaware Statutory Trust (DST) Properties. Infact, if we go by the facts, the Delaware Statutory Trust (DST) Investments have increased to a great extent in the past 1.5 years.
Why wouldn’t they? When the investors choose to go with Delaware Statutory Trust (DST) investments, not only do they free themselves up from the property management struggles but also helps them in deferring the payment of 37.5% tax payment and much more.
If you are a new investor, you may be confused between NNN, DST, REITS. This blog may help you make the best investment decision or affirm you of your decision to invest in 1031 DST Properties. Take a look.
- Relieves you from the management burden- All management related power lies in the hands of the property sponsor. The affiliated trustee takes all the decisions and the investors need not to worry about it. Maybe, that’s why more agile decisions are taken in DST investments. No management burden and secured money investment frees the investor to think about more investment plans.
- Better Investment Diversification- The scope of investment rises in 1031 DST Properties. A single DST is allowed to have a maximum of 2,000 investors. Each of them can make an investment of an amount as little as $ 1,00,000. This also gives an investor the luxury to invest smaller amounts across multiple DST programs and yield better returns while deferring the taxes levied on their Relinquished Property.
- Huge investments- In DST, many investors collectively invest in a single property in the name of the LLC (trustee). This way the investors are able to invest in a huge property which yields them a higher return on their investment. Also, the risk is very low.
- Special ownership structure- Generally, investors used to own an amount that can be done. When you invest in DST as replacement property, the trustee which is a limited liability company (LLC) covers the investors and doesn’t hold them liable. Unlike, other investment options that an investor has here there is one trustee that signs the loan papers and sponsors the property. The investors in case of any losses can declare themselves bankrupt which keeps their personal assets safe.
- Minimal ongoing fees- Statutory Trust (DST) Investments don’t require an SPE. This is why investors have to pay minimal ongoing fees. There is no single purpose entity and henceforth no or minimal maintenance fees are required.