How Property Management Works Inside a DST
The passive nature of Delaware Statutory Trusts (DSTs) makes them appealing to many investors who want a more hands-off investment. While you’re not expected to take part in administration or operations, it’s crucial to understand how the underlying properties of the trust are managed. With this knowledge, you can better assess DST offerings and sponsors, ensuring that you’re committing capital to ones that can properly oversee the income-generating activities of the assets.
Capital Expenditures and Repairs in Delaware Statutory Trusts
Delaware Statutory Trusts (DSTs) source their income from the performance of the underlying properties. As such, the monthly income you earn has a direct relationship to the profitability of the real estate assets. What happens, then, if the property suffers damage or any other issue that may disrupt operations and cash flow?
How Interest Rate Fluctuations Impact DST Values
Delaware Statutory Trusts (DSTs) can be promising investments, especially for 1031 exchange investors who want tax deferral, passive income, and enhanced diversification. However, like any other type of real estate investment, DSTs are not immune to changing economic conditions.
Understanding DST Operating Restrictions Under IRS Guidelines
The main driver of success for a Delaware Statutory Trust (DST) investment is the performance of the underlying assets. As such, streamlined and optimized property operations are necessary to ensure that cash flow remains stable and consistent. Given the passive nature of DSTs and restrictions imposed by the IRS, the lines become blurred between what’s restricted and what’s allowed for both investors and sponsors.
DST Portfolio Composition: Single-Asset vs. Multi-Asset Structures
As an investor evaluating Delaware Statutory Trust (DST) offerings, you’re focused on aspects like tenant creditworthiness, sponsor experience, and projected financials to determine if the specific investment is worth it. However, there is one aspect that some investors don’t pay enough attention to: the DST portfolio composition.
DST Liquidity Myths and Secondary Market Realities
Entering a Delaware Statutory Trust (DST) generally means sacrificing liquidity for benefits like passive income and tax-deferral. However, there is a way to access your capital even before the holding period is over: selling to an interested buyer in the secondary market. This strategy is possible because of an emerging demand, but it’s still rife with misconceptions and uncertainties.
