Depreciation in DSTs Post-Exchange: What Carries Over and What Resets?
As you invest from a 1031 exchange into a Delaware Statutory Trust (DST), one concern that you might want to consider is depreciation. What happens to the depreciation from the previous property? Do you get a fresh start now that the DST has several underlying income-generating assets? The answer isn’t straightforward, but it’s largely reliant on how tax laws view your basis, what’s considered “new,” and what “carries over.”
State Sourcing of DST Income for Nonresidents (and When Composite Returns Make Sense)
Investing in a Delaware Statutory Trust (DST) gives you access to income from several underlying properties within the DST. This structure offers benefits such as enhanced diversification and revenue from institutional-grade assets. Tax-deferral benefits, at the federal level, are also applicable when you finish a 1031 exchange through a DST.
How Appraisals Influence NAV in Passive Real Estate
For seasoned real estate investors, understanding the interplay between appraisals and the net asset value (NAV) of their investment properties is crucial. This dynamic is particularly significant in the realm of passive real estate investments, such as REITs or real estate-focused mutual funds. Appraisals can often make or break the perceived value of these investments, directly impacting financial decisions and strategies.
What “Core,” “Core-Plus,” “Value-Add,” and “Opportunistic” Mean in Passive Funds
In the realm of investing, particularly within real estate, understanding different strategies is crucial for successful portfolio management. When it comes to passive funds, investors often encounter terms like “Core,” “Core-Plus,” “Value-Add,” and “Opportunistic.” These classifications are key to determining investment strategies and aligning them with one's risk tolerance and return expectations.
Sponsor Evaluation for Passive Investors: Track Records, Teams, and Process Controls
In the world of passive real estate investments, particularly within Delaware Statutory Trusts (DSTs), selecting the right sponsor is crucial. Evaluating sponsors goes beyond merely examining properties; it's about understanding the integrity and capability of the people and processes that will ultimately determine your investment's success.
Understanding Use of Leverage in Passive Vehicles
Leverage in real estate investing is akin to a double-edged sword. It can magnify gains or amplify losses. For investment property owners, understanding how leverage works, especially in the realm of passive vehicles such as Delaware Statutory Trusts (DSTs), is crucial for informed decision-making and risk management.
