Why is Texas Real Estate a promising option?
One of the principal reasons for choosing Texas for a 1031 Exchange or real estate investment is that the cost of living and investing conditions favor the investor. According to the Texas Association of Realtors, in the second quarter of 2018, the standard home price in the state was $238,000.
No wonder many Californians and New Yorkers are excited about acquiring property in Texas. Lower prices can be seen in San Antonio, where sales growth has surpassed Houston and Dallas. As per a recent Forbes article, San Antonio is deemed the best city in the state for real estate investing. North Texas has also observed a steep growth in home prices.
Texas Real Estate Facts
Houston, San Antonio, Austin, and Dallas-Fort Worth are the major metros.
There is a rise in pre-owned home sales.
A comprehensive range of real estate investments.
Bigger markets observe higher price-to-rent ratios.
Texas’s capital, Austin, has the greatest median home prices in the state at $335,000. Austin is a great and accessible center for nightlife and rising musical talent. Austin celebrates the world’s largest music industry festival every March. The South by Southwest Music Convention (SXSW), invites musicians, artists, and fans from around the world. Austin also has the fastest growing population in the state. It observed a 9% increase between 2015 and 2018.
Why should I do a 1031 Exchange in Texas?
Technology and Tourism are the factors which keep the Texas economy healthy. Texas has seen a fast-growing job market. More than 400,000 new jobs were created in Texas in 2017. As per the U.S. Bureau of Labor Statistics, Dallas-Fort Worth saw the highest job growth in the state, accounting for over 100,000 new jobs in 2017.
Increasing employment opportunities and a growing population make Texas a suitable option for investment. Texas real estate is more cost-effective than other suitable options. Real estate investors considering Texas are aiming for better returns. Texas is a promising destination if you are looking at a replacement property for a profitable 1031 Exchange.
Let’s also get a better understanding of the 1031 Exchange.
What is a 1031 Exchange?
A 1031 tax-deferred exchange allows investors to reinvest the profits from the trade of investment property in one or more replacement properties without inviting immediate federal (and most state) capital gains taxes on the appreciated value. When the sale and purchase fulfill the 1031 exchange standards, taxes are delayed until the newly procured property is sold. This deferral strategy can be duplicated through any number of exchanges until the tax liability crosses into the individual’s estate upon death.
If you opt for a 1031 Exchange in Texas, you should be aware of the basics. IRC Section 1031 enables an accurately structured exchange allowing any investor to trade property and reinvest the profits in a brand-new property and to put off all capital gain taxes. IRC Section 1031 (a)(1) states:
“No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like-kind which is to be held either for productive use in a trade or business or for investment.”
Allow Experts to Manage a Successful 1031 Exchange in Texas for You
1031 Exchange enables your money to churn the maximum profit for you. However, the process of 1031 exchange in Texas is extremely complex in nature, and it would be wise to seek guidance from expert professionals. We have extensive experience in handling highly profitable exchanges for our diverse client base.
For consultation and assistance regarding 1031 exchange call 888-993-2835 or email us at info@1031Xchange.com