The real estate market remains a lucrative sector for anyone looking to cash in on the growing demand for office space and industrial complexes. A growing population and booming economy create just the perfect atmosphere.
With the help of reputable 1031 exchange companies in Nevada such as 1031 Exchange Place, you can speed your way to the top. See, under the section 1031 of the tax code, they lend you the cash to buy your next real estate property if you agree to certain terms.
As with all government stipulated affair, this process is not a cakewalk. However, if you take the time to execute the exchange properly, you would be on your way to building a real estate empire.
What is a 1031 property exchange?
In simple terms, a 1031 exchange is a tax deferment provision in the tax code that allows people to keep their monies in the real estate sector. The rule lets you hang on to any capital gains made on a property if you reinvest the entire amount realized from its sale.
You would be swapping one commercial property for one of equal or greater value. That’s right, residential properties don’t qualify for this tax deferment. Deferring capital gain taxes increases the amount of capital available to purchase your next property.
It is a form of an interest-free loan that you might never have to pay off. If you never cash out of the property in question, you can hold on to the capital gains.
What are the benefits of a 1031 exchange?
Under this exchange, you can make a lateral transition in the property market and grow your income. For instance, you can trade up from a duplex to block of apartments with a higher rental income. Alternatively, you can trade an office block for an industrial complex.
Such transitions can help you grow your income levels, which increase your purchasing powers. Leveraging these benefits can help you purchase a string of valuable properties.
Despite the high price of admittance, the real estate market remains a profitable investment destination. If you need a leg up to realize your investment dreams, consider taking advantage of a 1031 property exchange.