For some time now, asset securitization and equipment finance transactions have begun to be structured using a Delaware Statutory Trust. Being mainly used in the real estate industry, purchasing an interest in DST real estate comes with a set of benefits that have not been neglected by the common investor. If you are handling real estate investment yourself, and this type of strategy has caught your interest, then you probably wish to find out more relevant information on the topic. Which exactly are the benefits provided by a DST?
Ease of formation
Firstly, forming and maintaining a DST is a relatively inexpensive and easy process, detail that appeals to investors, which are usually confronted with lack of time and resources. All you will need to do is pay a small fee, and follow some basic steps. However, remembered that you will need a trustee in the State of Delaware, in order for the entire process to be completed.
Define your own business relationship
With DST, you have the amazing opportunity of defining your own business relationships, benefiting from the much desired contractual freedom. This means, the parties involve can settle their own arrangements, obligations and economic rights. You can expand, restrict, or even eliminate the duties of each party, according to your own settlements. The freedom of contract legally provided will give you the chance to create a business relationship that suits your personal needs, if all parties reach a final agreement. This detail can make a big difference for investors.
If you do decide to opt for a DST, then you must already know about the tax benefits involved. At a business organization level, you will not be subjected to taxes, depending on the way the Delaware Statutory Trusts is being structured. From a financial and tax point of view, this strategy is extremely advantageous for real estate investors, so if you want to take your gains one step further, while limiting your responsibilities, this is a great option.
Liability is limited
One of the greatest advantages of a DST is limited liability. The trustees and owners have no liability in terms of debts or other obligations revolving around the entity. Personal liability is usually a serious concern for investors, but with this alternative at your disposal, the possibilities are far more appealing, and your obligations are minimized, which is certainly a plus worth considering.
As you can see, the DST can provide you with various advantages, if you are in the real estate business. However, it is necessary to know all the implications of the process and to gain the expertise required. If you desire for your next 1031 exchange closing to be successful, then perhaps you should consider resorting to some qualified intermediary services, which can help you understand the process better. When you have the possibility of gaining so many benefits, why not take advantage of the opportunity? Find yourself a company that can provide you with the 1031 Exchange property ownership you desire, and you will soon collect the gains.