Practical
Guidance.

What is a 1031 exchange?

A 1031 exchange is a tax-deferral rule in Section 1031 of the Internal Revenue Code. It lets you sell investment or business real estate and reinvest the proceeds into like-kind real estate while deferring capital gains tax and depreciation recapture. The tax is postponed, not erased; each exchange rolls the gain into the next property. Read the full 1031 Exchange guide to see how the rules apply to a sale.

What are the 45-day and 180-day rules?

Within 45 calendar days of closing the sale, you must identify replacement property or properties in writing to your qualified intermediary. You then have 180 days to close on the replacement property. Both clocks start on the sale closing date, run at the same time, and cannot be extended. The 1031 Exchange guide walks through both deadlines in detail.

What is a Delaware Statutory Trust (DST)?

A DST is a legal entity that holds title to real estate, typically large institutional-quality properties. You buy a fractional ownership interest and hold a mostly hands-off position while a sponsor manages the asset. DST interests can qualify as like-kind replacement property in a 1031 exchange. Explore the full Delaware Statutory Trusts guide for how DSTs work as replacement property.

How do cap rate and cash-on-cash return differ?

Cap rate divides net operating income by purchase price, so it measures income against price before financing. Cash-on-cash divides annual pre-tax cash flow by the cash you actually invested, so it reflects your mortgage and your real return. Use cap rate to compare properties, and cash-on-cash to judge a specific financed deal. See how cash-on-cash measures a financed deal in the dedicated guide.

What should I check before buying a rental property?

Verify the rent the market actually supports, check the condition of major systems like the roof and heating, and budget honestly for taxes, insurance, maintenance, property management, and vacancy. Run the numbers both with and without a mortgage so you understand the deal either way. The Understanding the Numbers guide shows which metrics to run before you buy.

What is a turnkey investment property?

A turnkey property is a fully renovated rental that is ready to rent immediately, often with a tenant in place and property management arranged. It lets you own real estate and collect income without day-to-day landlord work, which makes it a good fit for first-time and out-of-area investors. The TTT Problem guide explains how turnkey properties remove the landlord work.