While the real estate market promises a great return on investment, it takes a considerable amount of skills and knowledge to realize these benefits. It is common for people to make critical mistakes when buying their first property.
In some cases, the property might prove to be a tad too much to handle, or it may not fall in line with your investment strategy. Fortunately, you can correct such mistakes and oversights without incurring hefty losses in the process.
In fact, you can harness the benefits of legal provisions such as the TIC 1031 exchange – a service provided by firms such as 1031 Exchange Place – and hang on to your capital gains.
Grow your income
There’s a great correlation between the rental income from a rental property and its location and condition. If you own a couple of old and run-down houses in a rough neighborhood, the rental income is likely to be dismal.
The market value of the property might be high, but the location and state might make it impossible to sell it at a profit. Luckily, a 1031 property exchange can offer you a way out without your finances taking a beating. You can simply swap this old property with another one of equal or higher value.
Naturally, picking a property that is in great shape and in an optimal location assures you of a higher rental income.
Avoid management responsibilities
Managing a commercial property takes a considerable amount of skills and knowledge that is often beyond your abilities or capabilities. Often, it takes hands-on management to get the most out of your investment. If you are looking to retire, the last thing you need is added responsibilities.
For a completely hands-free approach, you can opt for tenants in common property exchange. Here, you get to swap that property with a shareholding in a large estate. You get to channel every cent from the sales proceeds to secure a share in an institution, office complex, or an industrial complex.
That way, you get to escape the management responsibilities without incurring any losses.
Although lucrative, the commercial investment sector is not without its fair share of pitfalls. If you’re unfortunate enough to make a mistake, you may have an opportunity to correct them without incurring hefty losses.