Wiser Wealth: With a Delaware Statutory Trust (DST) Real Estate Investment Hassles Vanish

High Rise Apartment Building

It is no secret that there is a lot of money to be made in real estate. However, it can also lead you into tangential responsibilities that you might just be tired of dealing with. Some people just want to focus on the value of properties without the duties of being a landlord having to uphold the premises.

Fortunately, the Delaware Statutory Trust (DST) offers a compromise. Daniel Goodwin of Kiplinger sheds some insight on how investors can use this tool to have more customized control over their investment plans.

In essence, the DST allows you to become a fractional owner of a property, leaving the management of maintenance and so forth to others, while you are still able to reap the tax benefits of deferred capital gains. And a DST property also comes with a sense of stability since the tenants tend to be established company names, like Hilton or Amazon.

Frederick Hubler, Chief wealth strategist for Creative Capital Wealth Management Group has been using accredited investments (and DST’s) since they became available. “For investors looking for growth and income without using stocks and bonds, institutional tenants and properties found in my DST’s can add diversification to a portfolio without adding market risk. For working professionals, who don’t have time to be a “landlord” but who want to build up real estate, a DST allows them to convert cash into passive real estate investments but still be “taxed” like real estate.”

“For our clients,” Hubler continues, “who have owned investment real estate and have taken all the depreciation they can (or no longer want to be landlords), selling their property and using the 1031 to exchange into a DST allows them to defer the capital gains.”

Hubler goes on to say, “current tax law also allows a “step-up” at death so those deferred gains will be eliminated when it is inherited by the heirs.”

Unfortunately, investing in a DST does come with barriers to consider. For one, you will only be permitted to invest if your individual income was higher than $200,000 in the previous two years. Obviously, with how tumultuous careers have been recently due to the pandemic, that could be an obstacle. Though alternatively, you can still invest if your net worth is higher than $1 million.

However, the most important caveat to all this is to consult with a trusted accountant prior to making any decisions. Even with all the research, you do on your own, there could still be contingencies you miss. Don’t let ignoring good advice turn an opportunity into a mistake.

To learn more about how you can benefit from the Delaware Statutory Trust, be sure to read Kiplinger’s article here.


Fred Hubner

Want to know if you’re on the right path financially? Fred Hubler’s Second Opinion Service (SOS) is a no-obligation review with Creative Capital Wealth Management Group‘s Chief Wealth Strategist. It’s simply not possible to get a reliable second opinion from the same person who gave you the first one. Click here to schedule an SOS meeting.





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