Traditionally, a 1031 Exchange is used to defer payment on capital gains on investment properties. However, in today’s confusing market it can also be a strategy to minimize risk as well.
How has COVID-19 affected your real estate rental portfolio? Do you find that you are at risk of tenants not being able to pay their rent?
Are you considering taking advantage of the COVID-19 increase in demand for suburban rentals and wonder if a 1031 Tax Exchange can work during a forbearance?
There are several key strategies worth considering to minimize risk and maximize profit. One example is leveraging a forbearance to create a buffer of time to sell and transfer the proceeds into a less risky area, or a HUD guaranteed rental property.
If you’re working on your taxes during #stayathome, there’s some good news from the IRS that can dramatically help investors. Please read the update from Pennsylvania Association of Realtors below:
The IRS issued guidance Thursday evening to grant deadline relief for both 1031 like-kind exchanges and opportunity zone investments that are already underway. Both of these programs are designed to promote economic growth in communities, and NAR made the case that investors in these programs should not be harmed due to the effects of COVID-19.
1031 Like-kind exchanges. If an investor has taken the first step of a like-kind exchange by selling the old property, and either the 45-day or the 180-day deadline falls between April 1 and July 15, the deadline has been extended to July 15.
Opportunity Zones. If an investor who sold a capital asset planned to roll over the gain into an Opportunity Fund and the 180-day deadline to do so falls between April 1 and July 15, 2020, he or she can make the investment as late as July 15.
Also, sole proprietors who pay quarterly estimated taxes now have until July 15 to file their second quarter payment. As a result of an earlier IRS notice, first quarter estimated tax payments had already been extended to July 15. This means that any individual or corporation that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, can wait until July 15 to make that payment, without penalty.
For more information on how investors can thrive in the midst of the COVID-19 economic chaos, contact me today and let’s have virtual coffee via Zoom.
Whether you have one rental or many, check out the Top 5 tips to get top dollar for your rentals from Mike McNelis, CEO of The Philly Apartment Company.
1) Be Pet Friendly! This surprised me – but Mike explains over 60% of renters either have pets or want to have pets. Mike has suggestions to protect you regarding deposits.
2) Fix and Clean your Vacancy ASAP – sometimes landlords want to wait until it’s rented to paint. Mike explains that hurts your rental results. Do the re
3) Kitchen and Bathroom Renovations – these are areas where you can get a return dollar-for-dollar. New vanities, mirrors and light fixtures go a long way. As do stainless steel appliances.
4) Security – renters are always looking at security. Interior and exterior doors. Replace deadbolts and locks. It’s one of the things tenants look at first.
5) Be cooperative! – renters in today’s market have a lot of choices. Renters want to get to know their landlords. Be communicative and available. They want to know how to get in touch with you. That makes a difference when renters are weighing their options.
Contact me for my LANDLORD GUIDE and tips on how to maximize your investment properties for best results.