Can You 1031 Exchange Into a REIT?

Investing in real estate can be an excellent strategy for diversifying your portfolio. A REIT can be an ideal investment option if you want cash flow via real estate without worrying about management responsibilities. So, can you do a 1031 exchange into a REIT? While using a 1031 exchange to invest in REIT shares may sound like a wise idea, doing so can be complicated and may not be directly possible.

This guide includes the basics of REITs, how 1031 exchanges work and what investment options are available to you.

Guide to Like-Kind Exchanges

If you are an investor and considering selling your investment property and purchasing another, you may want to do a like-kind exchange. With a 1031 like-kind exchange, you can sell your investment property, purchase a like-kind property and defer capital gains tax.

At 1031 Crowdfunding, we want to help you through the process of a like-kind exchange. This like-kind exchange guide includes the basics of the rules, definitions and concepts you may want to understand before you jump into the 1031 like-kind exchange process.

Since 2011, the baby boomer generation has been reaching the age of 65, an age at which they join the group of Americans using the bulk of healthcare resources. A generation of about 76 million people today will continue to turn 65 through the year 2030.

As with any investment, it’s important to do the proper due diligence to know where your hard-earned money is going. When it comes to senior living investments, some think it’s similar to the traditional multifamily, office or industrial properties they have invested in before. Although in some instances this may be true, senior housing and care have some specific differences from other property types that are important to know before you invest.

Investing in Senior Housing

The U.S. population is getting older. In 2000, 35 million people were over 65. In 2020, 54 million people were 65 or older. By 2040, data indicates 80 million people will be more than 65 years old. As the population ages, people need somewhere to live that can accommodate their needs as older adults. While some can age in place in their homes, others move into housing designed for older adults who need a higher level of daily care. The increased demand for senior housing creates an opportunity for investors who want to diversify a portfolio or start investing in real estate for the first time.