Reits vs rentals

[Mark K.]

Looking to see thoughts on selling rentals and investing them in Reits through a 1031 exchange. Our properties have more than doubled in value and it seems like the return may be worth more than the headache of owning them at this point? Also wondering if anyone has feedback as to a good real estate tax advisor in our area?

Thank you.

[Jay Thomas]

Shifting from selling your rental properties to diving into REITs using a 1031 exchange is a pretty cool idea, and in the right situation, it could be a clever move. With REITs, you get a shot at higher returns without the typical landlord hassles, especially considering your properties' increased value. They're also good at spreading risk across different properties and areas, making your investment more stable. Plus, the tax benefits from a well-handled 1031 exchange, deferring capital gains taxes on your rental sales, can really boost your financial gains. But, and there's always a but, it means giving up control to REIT managers, dealing with limitations on how quickly you can access your money, and handling fees and expenses. Weighing these factors will help you figure out if this shift matches up with your long-term money plans.