Why do investors opt for Delaware statutory trust properties?

Written by Andres Bryant. Posted in Real Estate

Over the past few years, 1031 exchange investors have chosen to resort to the Delaware statutory trust, which is characterized by advantageous features, including delegation of management, liability protection, one time registration, asset protection and many others, combining the tradition of trust law with the modern freedom solicitude of contract. As an investor yourself, using Delaware statutory trust can offer you protection and flexibility, which are two aspects that are crucial in the world of investments. Here are the main reason why so many 1031 investors have chosen DST properties:

Tax advantages

Legally, a DST requires to be structured in such a way that it will not be subjected to taxes, at a business organization level. Being a more tax efficient alternative to corporation, it can be an ideal option for you as a 1031 exchange investor. Of course, this detail depends on all the parties involved and on the tax treatment chosen to suit your needs and interests best.

Management flexibility

A diversified approach towards property investments makes more sense than placing a large amount of your net into a single property. Moreover, the affairs and business of a DST are known to be managed by a trustee, a beneficial owner or third parties, which will offer you the broad flexibility you need. You have the possibility of selecting the arrangement that works best for you, minimizing your responsibilities, while still benefiting from the profits you desire. The ease of formation and minimal cost maintenance are other appealing advantages that a Delaware statutory trust property can offer you. But only by discussing with a professional, you will manage to fully understand the concept.

Contractual freedom

Another reasons why DST properties are so appealing to investors is the contractual freedom offered. The traditional approach of the DST act, give you the opportunity to define your own business relationship with the other parties involved in the process. By communicating, and establishing your needs, you can determine all the aspects of the contractual relationship. You can limit or expand your duties, depending on your interests and needs.

Limited liability

From a legal point of view, the trustees and beneficial owners of a DST have no personal liability for the obligations and debts of the entity. The broad scope of permissible indemnification and limitation of liability are details that are extremely appealing for investors. So if you are an investor or an industry professional yourself, give Delaware statutory trust properties some more considerations, and the benefits will certainly not disappoint you. As you can see, the DST is extremely advantageous, allowing investors to minimize their risks, while still accumulating profit. If this subject has caught your attention, and you desire to find out more information on the topic, it is best advised to resort to a reputable commercial real estate firm that can provide you with the 1031-Exchange eligible property ownership you are interested in. Take advantage of a stable cash flow, and look for a team of experts that can offer you the professional advice and guidance required.

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