Maximize Your 1031 Options
In our recent How Americans Plan to Vacation During Covid-19 article, we reported that nearly half of Americans have taken or plan to take a vacation during the COVID-19 pandemic. We note in the article that the pandemic has altered many of our typical vacation ideas. Instead of flying off to faraway or exotic locations, staycations or vacationing within driving distance have become the most popular options.
A growing number of Americans are also finding the need for ‘close to home’ short term rentals with leases of just a few days or even several hours – whether it be a break from confined living spaces or their loved ones, or even to create an office away from home work space.
Your investment property – current or future – may be the perfect opportunity to meet these locals’ needs. And utilizing a 1031 Exchange may enhance your investment opportunities even more.
Some things you may want to consider:
- One of the best ways to increase your income property investment value or cash flow is to sell your current investment property and utilize a 1031 Exchange to acquire a property that fits the needs of the current changing market. For example, one investment property owner recently sold commercial space that she leased to a retailer and purchased a house with a large backyard to be leased short or long term to apartment/condo owners who are seeking space during “shelter in place” restrictions.
- What market opportunities are close to your home or vacationers’ homes? Look at research like best cities to buy Airbnb investment property and where vacation markets have grown the most.
- Purchase a vacation rental with your 1031 proceeds. You can increase the value of your investment while acquiring property you can personally enjoy with limited use. Read up on Rev Proc 2008-16.
- If you’re handy and you work on improvements to increase your investment vacation property value, the nights you stay at your vacation property while working do not count as personal use.
- Strategically purchase a future dream, vacation or retirement home with 1031 proceeds. Find your perfect dream property that you can rent out now and plan to fully enjoy later.
Many opportunities exist for investment property. Planning a strategic tax deferred 1031 purchase or sale may be the best strategy in order to maximize opportunities in the current economic environment. Reach out to us at IPX1031 for more information and to your tax and legal advisors for your specific situation.
How Americans Plan to Vacation During Covid-19
How to Buy Your Vacation Home with a 1031 Exchange
Strategically Buying Your Dream Vacation Home with a 1031 Exchange
Where the Vacation Home Market Has Grown the Most
Data Reveals Vacation Home Hot Spots Across the Country
Do Vacation and Second Homes Qualify?
Revenue Procedure 2008-16
Cities with the Most Airbnb Properties
Best Cities to Buy Airbnb Investment Property
IPX1031 – Choose the Experts
IPX1031 focuses solely on 1031 Tax Deferred Like Kind Exchanges. As the national leader in 1031 Exchange services, IPX1031 has the financial assurances, security and expertise essentials to protect your funds and provide answers and guidance throughout the exchange process. For more information or to discuss your specific 1031 tax deferred exchange situation, please contact us.