As a property investor in the US, you may be considering a 1031 like kind exchange as a way to defer taxes and reinvest proceeds from the sale of investment property into new real estate assets. One strategy that can be particularly advantageous in a 1031 exchange is the use of rental homes. Rental homes offer several advantages for investors participating in a 1031 exchange. Here are some of the key benefits: 1. Wide range of options: Rental homes come in all shapes and sizes, from single family homes to multi-unit properties. This means that there are plenty of options available for investors looking to diversify their portfolios or seek out new investment opportunities. 2. Steady, predictable income: One of the biggest draws of rental homes is the monthly rental income they provide. This income can help investors cover the costs of ownership and provide a steady, predictable stream of cash flow. 3. Tax advantages: Rental homes offer several tax advantages for investors. For example, rental income is generally taxed at a lower rate than other types of income, and investors can take advantage of deductions for mortgage interest, property taxes, and depreciation. 4. Potential for appreciation: Like all real estate investments, rental homes have the potential for appreciation over time. This means that investors may be able to sell their properties for more than they paid for them, providing a profit on the investment. 5. Control over property: As the owner of a rental home, investors have control over how the property is managed and maintained. This can be particularly appealing for investors who prefer a hands-on approach to real estate investing.
A unique waterfront opportunity for the savvy owner/investor that I'm personally familiar with is in Amesbury, MA. This is a gorgeously redone, cash positive ($100K+ a year) 1031 like kind exchange property near Newburyport, MA on the bank of the Merrimack River. Rent it out fully or use it as a live/rent/work income property. I'm personally working with the owner who is currently offering it for sale by owner (FSBO). I have all the details and insight you need and will put you in direct contact with him. It is an antique home and it has been meticulously refurbished by the current owner over the last 3 years. There are several live/work spaces and a deep water dock for up to a 60 foot boat or yacht. Proven annual income of over $100k over last few years with professionally managed bookings through 2023 on AirBNB and several other vacation rental property websites. You could live/work in one portion and gain rental from other, or own as a 1031 exchange and rent the whole property. 2+ kitchens, and ensuites everywhere.
This is a fully renovated, glass front, waterfront home with 8' x 60' floating dock, and 3 exterior, elegantly lit decks for entertaining. This home features two distinct living areas, with two gourmet kitchens, as well as a galley kitchen for offloading the boat provisions or use it as a separate kitchen to support a small office space, as it is attached to 2 additional rooms on the lower level. The primary top floor master suite has windows on three sides to take in the spectacular view of the Merrimack River, leading out to Newburyport, MA (1/4 mile away) and the Atlantic ocean, Plum Island Beach and national wildlife/Audubon refuge, and it is directly across the river from the 483 acres of Maudslay State Park. Moseley Park, an off-leash dog walking area and playground is also a short walk away.
Seven bedrooms with separate baths offer flexibility for rentals with large families and friends. Often rented to birders looking to spot American Bald Eagles, hunters and fishermen, photographers, writers, and families celebrating birthdays, anniversaries, and weddings. Ceremonies can be held on the lawn along the river. The seven and a half luxurious bathrooms feature high end stonework and heated European mirrors that never fog with steam. Laundry room on the bedroom level, as well as one in the lower level. Dedicated large deck area designed for installation of an outdoor hot tub with incredible views of the water and sunsets. Parking for 7 cars, as well as a garage designed for jet skis and other watercraft. A bonus room behind the garage can be used as a gym, office or for expansion of the garage.
Both US and international 1031 owner/investors are welcome to inquire. Not limited to a 1031 sale. Local legal representation can be established directly for you.
In summary, rental homes can be an excellent choice for investors participating in a 1031 like kind exchange. With a wide range of options, predictable income, tax advantages, potential for appreciation, and control over the property, rental homes offer a compelling investment opportunity for those looking to defer federal taxes from real estate gains and reinvest in new real estate assets. This property is an excellent example.