Running a family business is certainly not an easy task, especially if it revolves around the real estate market. Buying and selling properties can be quite profitable, but considering the numerous taxes you are obligated to pay, the real estate market has its own financial downsides. If you are interested in either buying, or selling a property that is used for business purposes, then perhaps you should consider a 1031 properties exchange program. If you collaborate with the right facilitator, and are well aware of what 1031 exchanges imply, then you might end up saving a lot of money. Here are some essential details you should know on the topic.
The first reason why property exchanges have become such a success among real estate investors, and why you should give this topic your consideration as well, is the possibility of deferring taxes. When selling a property or buying one, the taxes you are required to pay to the government are certainly not ones to neglect, and this aspect can sometimes affect your profits considerably. Once you begin learning more about 1031 exchanges, you will find out that this type of program allows you to defer taxes. This can be an extremely advantageous detail for your business, pushing it forward, and giving you the chance to expand.
Properties that qualify
One thing you should know about exchanges is that not all properties can qualify. In order for the program to apply, the exchanged properties need to be used for business purposes solely. This means you will not be able to swap a vacation home with someone, for example. So if you were planning to use the program for a residence, your application will not be taken into consideration. To be safe, you should read all relevant requirements, before contacting an exchange facilitator, to know if you can qualify for a swap.
You will need a reliable facilitator
In order for the exchange process to go smoothly and to meet all legal requirements, you will need the assistance of a facilitator – a third party who will have an objective role. This type of specialist needs to be highly experienced and reliable, so when you are searching for a company that offers these services, make sure to research their reputation in advance. With the help of a property exchange specialist, you will understand each step of the process, and the exchange will develop in an inconvenience-free way.
A 1031 exchange program is a great opportunity for real estate investors to save some money, and skip over a few inconveniences that property investments usually involve. If this topic has caught your interest, and you want to take advantage of what this type of program has to offer, you should contact a specialist who can provide you with the support and advice you need. Just look online for a company that handles property exchanges, and request a meeting. Your real estate family business will only have things to gain, if you go with this option.