DST 1031 properties are purchased by trusts rather than individuals, and most trusts have multiple people involved with them. Investing in properties through a trust that involves multiple people has several benefits over purchasing properties on your own.
Access to Larger Properties
The groups who invest in DST 1031 properties have access to properties that most individual investors can't afford on their own.
When multiple people pool their financial resources together, they can afford more desirable properties. These are sometimes properties in better neighborhoods, but they're more often larger properties. For example, a group might be able to afford a condominium building or an apartment complex that sells for much more than a standard house.
Getting into larger properties, like apartment buildings, has two advantages. First, these properties can provide higher returns than single-family houses because they have more people renting units.
Second, big properties can help diversify an investment portfolio that primarily consists of smaller units. Diversification like this can help protect investors from downturns in a particular segment of the real estate market.
Benefit from Other People's Expertise
If you invest with a group of other people who have experience with real estate opportunities, you can benefit from their knowledge and experience. No one person has to be an expert in every aspect of real estate investing, so long as the group as a whole has people who know what to do. Each team member can specialize in a specific area of knowledge.
Since you don't need to know everything about real estate investing, you can reduce how much time you spend studying the whole subject. You also can avoid making mistakes that an investor who doesn't know everything might make, for others in the group will speak up when they see someone making an error on an investment.
Spend Less Time Investing
If you don't have a lot of free time for researching and managing properties, a group that focuses on DST 1031 properties can let you participate in this type of investing while committing less time to the activity.
Groups commonly have people who source new potential deals and managing existing properties, but these groups also have passive investors.
Passive investors do little more than provide financial resources, and this role is perfect for someone who doesn't have a lot of time. Other people can take care of the time-consuming aspects of investing while passive investors collect returns per a group's agreement.Share