Understanding DST investments made easy

When you are not familiarized with many concepts in the finance field, it will be quite difficult to face all the situations that will pop in your journey. As a family, it is required to make sure that all the requirements and needs of each member is respected. The main limitation when it comes to this problem would be the home that the family is living in. Well, in order to know how changing homes works or what you should do when the budget won’t allow you to buy a new house each time you desire, you need to learn about some real estate concepts that can be extremely useful for your situation, for dealing with issues that definitely need to be solved as fast as possible.

DST investments are something that not many people know about. Understanding how the DST real estate works is not complicated at all. The only thing that you need to do is set your goals for the future and know exactly what you desire and need to do. A DST investment refers to a like-kind exchange. Replacing a property can be done if certain requirements are respected. 1031 exchanges are usually applied to business real estate, but there are some exceptions for homes as well. Read more about this topic below:

Benefits

There are certain benefits of DST investments that are surely useful for a family. If you don’t know how to handle banks, you should know that a DST investment do not involve any direct bank contact. Banks are not implied in any way in such investments, reason why people can easily get their exit strategies where necessary. Yet, what’s even more useful about DST investments is the fact that you can choose an additional option (besides the 45-day period meant for identification).

The main benefit of DST investments would be the fact that tax deferral is present. You need to understand that tax deferral doesn’t mean that you are completely avoiding all the taxes you would have to pay, but you will receive a certain amount of money spent on taxes back. You should get to know every detail about taxes, because it is really important not to gather a lot of debt or else you’d end up in a worse situation than the initial one.

Drawbacks

There is always another side of the story. Since you may not be familiarized with taxes and investments, you should understand what a passive investment means. It includes lots of limitations and a very low input, that can represent a huge drawback later on. Another thing that could represent an obstacle for you would be the long-term holding periods. This is the case of people who want to make a DST investment in the business field, since the holding period reaches up to ten years. This might be quite inappropriate considering the fact that you don’t want to simply park your money somewhere a while – you desire a full investment.