Should You Consider A Delaware Statutory Trust

If you are into real estate investment, then you would want to consider DST or Delaware Statutory Trust. As the name suggest, those who invest in DST pool their resources in purchasing interest in the trust. Through this tool, investors have the chance to put their money in larger properties, which will in turn improve their investment portfolio. It is all the more beneficial for investors looking to diversify their investment portfolio. Delaware Statutory Trust is widely used in 1031 Exchanges.

Understanding the process of Delaware Statutory Trust

A fractional ownership stake in real estate held in trust by a sponsor is what you get when you invest in a DST. The sponsor, which is typically a major real estate firm, manages the paperwork, due diligence, and acquisition of property while pooling funds from several investors. DSTs typically own properties that are comparable to those owned by major institutional investors, such as warehouses, industrial buildings, retail establishments,  healthcare facilities and medical professional buildings, to name a few. In addition to a fractional portion of the earnings from the sale of the property, investors get periodical cash dividends that are taxed as passive income. Investors have no recourse for any debt that the DST takes on. The beauty of this process is that everything is simplified and direct with minimal paperwork, hence, the reason why it attracts many investors.

Below are the benefits or advantages offered by Delaware Statutory Trust

• DST allows you to have fractional ownership, which is an effective vessel in diversifying investments.
• It allows you to put your investment in institutional-quality properties.
• If you are investor who does not have much time managing your investment, then a DST is perfect for you.
• Unlike other investment tools, DST requires only $100,000 to start investing. This figure is pretty low, which means that more and more people can put their investment on it.
• It provides capital gains tax benefits and high income potential for those investors who put their money on rental properties. They can also benefit from appreciations.
• DST requires minimal paperwork making it all the more attractive to investors.