Section 1031 of IRC, commonly known as a 1031 exchange, allows investors to defer capital gains tax on exchanging an investment property for another like-kind property. 1031 investors can acquire a replacement property anywhere throughout the United States. Hundreds of investors choose 1031 exchange every year so that they can get hold of new properties at new locations. Considering all the rules and requirements of a 1031 exchange, it could be said that 1031 exchange Connecticut market has a lot to offer to 1031 investors. Here are the five best marketplaces for 1031 investors in Connecticut.
Bridgeport could be the best option for you if you’re looking to flip your investment properties for a potential 86.7% ROI. The median home value in Bridgeport is $176,200. It makes the city affordable for many 1031 investors who want to step into the Connecticut real estate market.
While its neighborhoods may not be too appealing, its proximity to New York ensures positive results. The city is turning into a prime real estate market for wealthy investors who want to stay close to Wall Street.
In recent years, the market has appreciated about 6.7% and it is likely to increase by 6.6% in value within the next year.
While Waterbury real estate market may not bring the same profits as Bridgeport’s, it provides a potential ROI of about 143% for house flippers. The median home value in the city is $116,200.
Last year, the Waterbury real estate market had risen by 5.6% in value. While it isn’t expected to keep rising at the same rate, a 4.4% increase is forecasted for this year.
You may need more capital to invest in this market. However, Cornwall is a great option for investors looking to make money irrespective of anything. The median home value in Cornwall is $419,200. Chances are that you may get lucky and find some properties priced at about $92,000. Last year, the value of properties rose up to 13%. In 2019, houses in Cornwall are expected to rise by about 2%.
This coastal town is a perfect location for house flippers looking for a potential ROI of about 122%. The median home value in Stratford is $239,361. While the average annual appreciation rate is only 1.13%, it’s a great market if you’re looking to sell or exchange your investment properties.
After considering Stratford’s home vacancy rate of 7.2% and a home ownership rate of 79.1%, it could be said that it’s a seller’s market.
If you’re looking for high-value properties, the Fairfield market could be your best option. While the median home value in the city is $673,695, the market has the highest average annual appreciation rate of 2.28%. Fairfield real estate market doesn’t incline towards either the buyer or seller. Therefore, you may consider renting or selling your investment property in this market.
As you can see, these five real estate markets are best for 1031 exchange investors in Connecticut. Depending upon your budget and desire, you can invest in any of these markets.