In the past approximately twenty years, a series of secured financial instruments put the bases off what we know now as the DST. Beginners should know that Delaware statutory trust real estate investments offer to the parties in discussion a series of advantages and privileges as well as a series of protective rulings for those managing such transactions. But let’s analyze what these benefits and advantages are in the following paragraphs.
Increased flexibility levels
Investments managed under the Delaware Statutory Trust offer, generally, increased levels of flexibility, as the trustees benefit from great management instruments as participants. Therefore, third-parties specialized in management matters can and will offer their assistance as a trustee needs it. Also, the Agreement lets the participants in a trust fulfill different jobs and purposes, as they establish and desire themselves.
Trustees have limited liability of the potential debts of the entity
No matter one’s status in an entity formed under the DST laws and regulations (be them managers, beneficial owners, or simple members) they do not have personal liability over the potential debts accumulated by the entity, neither will they be responsible or guarantee with personal properties for it. This comes for members and participants as a great advantage, since they can benefit from the income as long as it is possible, but no downside will be felt if the business becomes unproductive.
Enormous tax advantages
These investments are tax deferred, and because of this reason, many companies choose this option, because it is a great alternative that is not taxed at organizational level. Also, it lets the parts involved to choose the most benefic tax regulation for their particular case and business practiced.
Witty investors know how to make the most of it
Ok, you might not be the most trained business person, or you might not even be a business person at all. The great thing is that under the DST regulation you can make simple real estate investments, able to bring a generous monthly income. And, once again, this all under the tax-free regulation. The simplest way of making money under the DST is via 1031 property exchanges. The process consists in swapping your property for another one, estimated at a similar market value. It all has to be done in a strict time frame, and with professional intermediaries. The investor should not enter in the possession of the money at any point of the transaction. The properties most be “like-kind” only in terms of value, the destination of the property being rather irrelevant. Many swap their commercial building for ranches, or farms or hotels. It all depends on your future plans and expectations in terms of business. Also, because these investments are so flexible, the success of investor’s business depends entirely on their capacity to analyze market trends and developments.
Make sure you take advantage of this kind of investments, but don’t forget to hire a highly professional team to help you in the matter as well!