Buying and owning a property that you lease out to tenants is no walk in the park. It doesn’t matter if you own an apartment complex or a business building, every property requires immense time, attention, and money to keep everything up and running.
Unfortunately, running a piece of property is more than just collecting rent. You have to perform maintenance, address vacancies in a timely manner, schedule and show the property to potential tenants—the list of responsibilities goes on and on.
That’s why most property investors opt for hiring a professional property management service to handle all of these pesky tasks. Property management gives you the liberty to focus your time and money on expanding your equity and frees you up to spend time on your own life. But how do you accomplish this? Let’s find out!
Perform a 1031 Exchange
Owning a piece of property is a potentially beneficial investment option. Unfortunately, however, buildings are also high on the list as some of the most depreciable assets an investor can own. They require tremendous amounts of upkeep that can end up costing you a fortune.
This is why many property owners are choosing to spread their wealth across several other properties. Through an IRS code called the 1031 Exchange, property owners are able to sell off a piece of depreciable property and hedge the earnings of the sale into other, more appreciable property. Then, they can hire a professional property management service to maintain tenant relations and building upkeep. The 1031 Exchange also allows investors to defer or forego costly taxes entirely, potentially saving money at the point of sale.
Provides a viable exit strategy
Only two or three decades ago, property owners aimed for appreciation of their properties and growing their nest egg. Now, the core objective for most property owners is to accrue income over time. This is made possible with the help of the 1031 Exchange and professional property management services.
One of the greatest benefits of professionally managed real estate is that it offers a viable exit strategy for highly appreciable equity. This helps you better position yourself for your next round of investing and align more succinctly with your goals. Instead of feeling stuck in a rut with your depreciating property, you can divest in that real estate and put the difference into a potentially more appreciable building, which gives you a chance to obtain income over time.
Free up time for your own life
So, what does this mean for you as a property owner? Instead of dealing with pesky tenants and costly maintenance and renovation, you can now free up your time to find potentially bigger and better properties to invest in that are managed by somebody else. Now you have more free time to go to your grandchildren’s baseball game, go on a cruise, or play a round of golf!
Have peace of mind
And perhaps the crown jewel of choosing to engage in a 1031 Exchange is the ability to step back, not deal with day-to-day management, and let your money do the work for you. A property management solution may give you ease of mind while still having the potential to garner wealth through your multiple appreciable investments.
Through the leveraging of the 1031 Exchange and utilizing a reputable and professional property management company, NB Private Capital can help you attempt to get the most out of your real estate investments. Now, you can lessen your reliance on your nest egg equity and strive to continue growing your wealth through tax deferrals and the potential for increased income.