Why a Self-Storage TIC Might be Right for You

Investors go into rental property ownership for all the right reasons. Appreciation of the asset and a steady, monthly income flow are two big ones. And it works beautifully for most. At least for awhile.

But eventually the day comes when an investor, likely facing his or her golden years, still desires the cash flow and appreciation, but no longer wants the day-to-day responsibility of rental property ownership. After all, those 3:00 a.m. phone calls get tiresome, even for the most agreeable landlords.

The great news is that investors can continue to enjoy the benefits of rental property ownership while eliminating the daily management responsibilities. And, if they structure the transactions correctly, they can defer any tax obligation on capital gains. How?

With a 1031 exchange utilizing a self-storage tenancy in common (“self storage TIC”). The investor goes ahead and sells their current investment property and, via a 1031 exchange, reinvests the proceeds into an ownership interest in a self-storage #TIC. The beauty of a self-storage TIC is that it allows for fractional ownership of a revenue-generating property while eliminating any of the day-to-day management responsibilities.

Self-storage TICs also offer:

• Superior return on investment
• Offset your income with a pro-rata portion of depreciation (10% APR in most cases)
• No hands-on property management responsibilities
• Liquidity
• Qualify for future 1031 exchange treatment
• Guaranteed monthly income
• Avoid the volatility of the stock market

A self-storage TIC combined with a #1031 exchange can be an effective tool for an aging investor – or anyone else – who want to continue their investment strategies with real estate but with fewer responsibilities.

If you’re considering a 1031 exchange, please visit our website to learn more about the exchange process, our qualified intermediary services and how we can help you find and close on your next 1031 exchange property.