Strategies for Owning Income Properties in California
In California's dynamic real estate market, significant changes in investment property laws are prompting property owners to reassess their strategies. We discuss into the implications of these laws and explore why it may be time to reevaluate your investment strategy. From the complexities of 1031 Tax-Deferred Exchanges to innovative alternatives like Delaware Statutory Trusts and Tenancy in Common arrangements, we provide insights to help you navigate this shifting terrain. Whether you're a seasoned investor or new to the market, understanding these changes is essential for making informed decisions about your real estate portfolio.
1031 Tax-Deferred Exchanges
This is a transaction permitted by the Internal Revenue Code whereby property investors may defer capital gains taxes when selling a property held for a business, trade, or investment and reinvesting the proceeds in like-kind property. The timelines are 45 days to identify/180 days to close.
Delaware Statutory Trust
For those who would like to sell their income property and invest in real estate without the headaches of property management, the Delaware Statutory Trust allows one to invest as a minority interest in a large project managed by professionals. This provides more flexibility for property owners. Call us for details.
Tenancy in Common
Tenancy in common (TIC) is a form of property co-ownership in which a property is not shared equally and is most commonly seen when co-owners are unrelated. Tenants in common are permitted to own carrying shares of the property, but all co-owners have an equal right to enjoy the entire property. The biggest difference between TIC and joint tenancy is survivor’s rights. A co-owner with survivor’s rights can pass their share of the property to their heirs as a part of their will and estate planning. Tenants in common have survivors' rights, making them a popular estate planning tool.
California's evolving investment property laws demand careful consideration from property owners. With profitability increasingly challenging to achieve, it's essential to reassess your investment strategy. From 1031 Tax-Deferred Exchanges to innovative alternatives like Delaware Statutory Trusts and Tenancy in Common arrangements, navigating these changes requires insight and adaptability. Whether you're a seasoned investor or new to the market, understanding these shifts is crucial for informed decision-making regarding your real estate portfolio.
To view our other blog that discusses the changing laws for your California Income Property, click HERE.
To see our other blog regarding the new California Real Estate law changes, click HERE.
As your trusted real estate advisors, we stay up to date with all changing laws to keep you informed. Contact us to discuss how these recent changes may affect you and how to plan for the future.
