--- title: Top Benefits for Real Estate Investors to Spring into DSTs description: Explore the benefits of DSTs for real estate investors, including tax deferral, passive income, diversification, and estate planning advantages. image: https://blog.investsafeharbor.com/hubfs/SafeHarbor/Blog_Asset/nyc-spring.png --- 167 East Main Street, Huntington, NY 11743 [info@InvestSafeHarbor.com](mailto:info@InvestSafeHarbor.com) [(631) 421-4341](tel:(631)%20421-4341) [![Available Property Listings](https://no-cache.hubspot.com/cta/default/21593960/3b103598-ae48-4c52-9462-bef9083faf87.png)](https://cta-redirect.hubspot.com/cta/redirect/21593960/3b103598-ae48-4c52-9462-bef9083faf87) [![safeharborlogo-250](https://blog.investsafeharbor.com/hs-fs/hubfs/SafeHarbor/safeharborlogo-250.png?width=250&height=77&name=safeharborlogo-250.png "safeharborlogo-250")](https://investsafeharbor.com/) - [Home](https://investsafeharbor.com/) - [About Us](https://investsafeharbor.com/about/) - [Our Leadership](https://investsafeharbor.com/ourleadership/) - [Wealth Management](https://investsafeharbor.com/wealth-management/) - [1031 Exchanges](https://investsafeharbor.com/1031exchange/) - [About 1031 Exchanges](https://investsafeharbor.com/1031exchange/) - [1031 Resources](https://investsafeharbor.com/1031exchange/resources/) - [DSTs](https://investsafeharbor.com/1031exchange/dst/) - [Closed Properties](https://investsafeharbor.com/1031exchange/properties/) - [Blog](https://blog.investsafeharbor.com/blog) - [Contact Us](https://investsafeharbor.com/contact/) - Client Login - [Available Properties Portal](https://investsafeharbor.com/properties-login/) - [Black Diamond](https://login.bdreporting.com/Auth/SignIn) [![Available Properties](https://no-cache.hubspot.com/cta/default/21593960/24f1e041-ad00-435b-b932-74236070e5c9.png)](https://cta-redirect.hubspot.com/cta/redirect/21593960/24f1e041-ad00-435b-b932-74236070e5c9) ![Top Benefits for Real Estate Investors to Spring into DSTs](https://blog.investsafeharbor.com/hubfs/SafeHarbor/Blog_Asset/nyc-spring.png) [1031 Exchanges](https://blog.investsafeharbor.com/blog/tag/1031-exchanges) | [Real Estate](https://blog.investsafeharbor.com/blog/tag/real-estate) | [Asset Protection](https://blog.investsafeharbor.com/blog/tag/asset-protection) | [Estate Planning](https://blog.investsafeharbor.com/blog/tag/estate-planning) [Ana Reano](https://blog.investsafeharbor.com/blog/author/safeharbor) Mar 23, 2021  0  comments - - - - [mailto:?subject=Check%20out%20https%3A%2F%2Fblog.investsafeharbor.com%2Fblog%2Ftop-benefits-for-real-estate-investors-to-spring-into-dsts%20&body=Check%20out%20https%3A%2F%2Fblog.investsafeharbor.com%2Fblog%2Ftop-benefits-for-real-estate-investors-to-spring-into-dsts](mailto:?subject=Check%20out%20https%3A%2F%2Fblog.investsafeharbor.com%2Fblog%2Ftop-benefits-for-real-estate-investors-to-spring-into-dsts%20&body=Check%20out%20https%3A%2F%2Fblog.investsafeharbor.com%2Fblog%2Ftop-benefits-for-real-estate-investors-to-spring-into-dsts) # Top Benefits for Real Estate Investors to Spring into DSTs Delaware Statutory Trusts (DSTs) are legal entities that allow for fractional ownership of real estate assets by accredited investors.1 Beneficial interest in a DST is treated as direct interest in real estate for tax purposes, qualifying as “like-kind” property in a 1031 Exchange.2 Investors can defer taxes by exchanging real property for an interest in a DST, rather than investing in another whole property. ### **Our Top Benefits for Real Estate Investors to Spring into DSTs:** 1. **Defer & Offset Taxes:** A properly executed 1031 into DST allows investors to defer capital gains & other taxes upon the sale of appreciated real estate, allowing for equity preservation & maximization of total return, while taxable DST monthly income may be offset by depreciation deductions. 2. **Income:** Investors receive monthly distributions of passive income based on their ownership percentage, as well as proceeds from the eventual sale of the property which may be positively impacted by appreciation. (Most DSTs have a holding time of 5-7 years.) 3. **Passive Management:** Owners do not have onerous property management duties - the “toilets, tenants & trash” - as DSTs are a passive vehicle for investors. Properties are professionally managed by affiliates of the DST Sponsor, which handles day-to-day decisions & the eventual sale of the property. 4. **Non-Recourse Debt:** It can be difficult for individuals to obtain favorable financing on their own, especially during economic challenges. But DSTs often come with pre-arranged financing; the DST Sponsor is the sole borrower & takes on 100% of the debt liability so loans are non-recourse to the investor. 5. **Diversification:** DST investment can achieve diversification by geographic region, tenant industry, asset class, capitalization structure, etc. An investor can even achieve diversification by investing in a single DST that holds multiple properties. 6. **Simplicity:** Easy closings & efficient investment process. 7. **Lower Minimum Investment:** Investment minimums are typically $100,000, made possible by the fractional ownership model (up to 499 investors can hold interest in a single DST.) 8. **Access to High-Quality Property:** Investors have access to higher quality, institutional & commercial real estate with long-term appreciation potential. Tenants are often recession-proof with investment-grade credit. (Think NNN leases, multifamily apartments, industrial warehouses, self-storage, essential health & retail, etc.) 9. **Estate Planning:** “Swap Until You Drop” Allows the investor to continue to exchange over & over again until death, at which point the 1031 investments receive a step-up in cost basis. Heirs do not inherit capital gain liabilities or the burden of hands-on management while gaining the investment’s professional real estate management. 10. **Insurance Policy: **If for some reason the investor can’t acquire the original property they identified, a secondary DST option specified during the ID period allows them to meet exchange deadlines and still defer the Capital Gains Tax. 11. **Eliminate Boot:** Any remaining profit on the sale of your relinquished property is considered “boot”. This remainder becomes taxable it is eliminated. The excess cash (boot) can be invested in a DST to avoid incurring tax. ## Let’s discuss your situation! Call us at (631) 421-4341 to discuss your 1031 Exchange or potential investment grade properties.       1*Must be an “Accredited Investor” to invest-defined in Regulation D under the Securities Act as a natural person satisfying 1 of the following: (1) individual net worth, or joint net worth with his/her spouse, or spousal equivalent, of more than $1,000,000, subject to certain criteria for calculation net worth (excluding the value of personal residence); or (2) individual income in excess of $200,000, or joint income with his/her spouse, or spousal equivalent, in excess of $300,000, in each of the 2 most recent years and has a reasonable expectation of reaching the same income income level in the current year.* *2IRS Classification: DSTs are classified as investment trusts for federal tax purposes, under IRS Section 301.7701-4(c). A beneficial interest in a DST is recognized by IRS Rule 2004-86 as qualified replacement property for real property.* #### Tags: [1031 Exchanges](https://blog.investsafeharbor.com/blog/tag/1031-exchanges) [Real Estate](https://blog.investsafeharbor.com/blog/tag/real-estate) [Asset Protection](https://blog.investsafeharbor.com/blog/tag/asset-protection) [Estate Planning](https://blog.investsafeharbor.com/blog/tag/estate-planning) ![Virtual Experiences We Think You’ll Love](https://blog.investsafeharbor.com/hubfs/SafeHarbor/Blog_Asset/Family_meeting.jpg) #### [“We, the Family”: The Benefits of a Family Constit](https://blog.investsafeharbor.com/blog/we-the-family-the-benefits-of-a-family-constitution) #### [Virtual Experiences We Think You’ll Love](https://blog.investsafeharbor.com/blog/virtual-experiences-we-think-youll-love) ![Virtual Experiences We Think You’ll Love](https://blog.investsafeharbor.com/hubfs/SafeHarbor/Blog_Asset/virtual-tour.png) #### Popular Posts ![Two Stories About AI. One Portfolio That Doesn't Have to Choose.](https://blog.investsafeharbor.com/hubfs/featured-1200x700-1.png) [Two Stories About AI. One Portfolio That Does](https://blog.investsafeharbor.com/blog/market-perspective-two-stories-about-ai-one-portfolio) ###### Jun 16, 2026 ![The “Drop & Swap” Alternative In A 1031 Exchange](https://blog.investsafeharbor.com/hubfs/SafeHarbor/ER-Value-Add-Portfolio-2-DST.png) [The “Drop & Swap” Alternative In A 1031 E](https://blog.investsafeharbor.com/blog/the-drop-swap-alternative-in-a-1031-exchange-do-as-you-see-fit-with-your-proceeds) ###### Aug 04, 2022 ![Smart Ways to Take Control of a Trust](https://blog.investsafeharbor.com/hubfs/SafeHarbor/Blog_Asset/EstatePlanningRE.jpg) [Smart Ways to Take Control of a Trust](https://blog.investsafeharbor.com/blog/smart-ways-to-take-control-of-a-trust/) ###### Jul 28, 2020 --- #### Categories - [Financial Planning (21)](https://blog.investsafeharbor.com/blog/tag/financial-planning) - [Lifestyle (21)](https://blog.investsafeharbor.com/blog/tag/lifestyle) - [1031 Exchanges (20)](https://blog.investsafeharbor.com/blog/tag/1031-exchanges) - [Real Estate (20)](https://blog.investsafeharbor.com/blog/tag/real-estate) - [Wealth (20)](https://blog.investsafeharbor.com/blog/tag/wealth) - [Family (19)](https://blog.investsafeharbor.com/blog/tag/family) - [Asset Protection (17)](https://blog.investsafeharbor.com/blog/tag/asset-protection) - [Investments (16)](https://blog.investsafeharbor.com/blog/tag/investments) - [Uncategorized (16)](https://blog.investsafeharbor.com/blog/tag/uncategorized) - [Professional Advisors (12)](https://blog.investsafeharbor.com/blog/tag/professional-advisors) - [Business Tips (11)](https://blog.investsafeharbor.com/blog/tag/business-tips) - [Health (9)](https://blog.investsafeharbor.com/blog/tag/health) - [Tax Planning (7)](https://blog.investsafeharbor.com/blog/tag/tax-planning) - [Estate Planning (6)](https://blog.investsafeharbor.com/blog/tag/estate-planning) - [Insurance (6)](https://blog.investsafeharbor.com/blog/tag/insurance) - [Wills and Trusts (4)](https://blog.investsafeharbor.com/blog/tag/wills-and-trusts) - [Philanthropy (3)](https://blog.investsafeharbor.com/blog/tag/philanthropy) - [DSTs (2)](https://blog.investsafeharbor.com/blog/tag/dsts) - [Psychology (2)](https://blog.investsafeharbor.com/blog/tag/psychology) - [AI (1)](https://blog.investsafeharbor.com/blog/tag/ai) - [Diversification (1)](https://blog.investsafeharbor.com/blog/tag/diversification) - [Irrevocable Trusts (1)](https://blog.investsafeharbor.com/blog/tag/irrevocable-trusts) - [Market Perspective (1)](https://blog.investsafeharbor.com/blog/tag/market-perspective) - [Portfolio Construction (1)](https://blog.investsafeharbor.com/blog/tag/portfolio-construction) - [Recognition & Awards (1)](https://blog.investsafeharbor.com/blog/tag/recognition-awards) - [Retirement Planning (1)](https://blog.investsafeharbor.com/blog/tag/retirement-planning) - [Risk Management (1)](https://blog.investsafeharbor.com/blog/tag/risk-management) --- #### Tags [1031 Exchanges](https://blog.investsafeharbor.com/blog/tag/1031-exchanges) [AI](https://blog.investsafeharbor.com/blog/tag/ai) [Asset Protection](https://blog.investsafeharbor.com/blog/tag/asset-protection) [Business Tips](https://blog.investsafeharbor.com/blog/tag/business-tips) [Diversification](https://blog.investsafeharbor.com/blog/tag/diversification) [DSTs](https://blog.investsafeharbor.com/blog/tag/dsts) [Estate Planning](https://blog.investsafeharbor.com/blog/tag/estate-planning) [Family](https://blog.investsafeharbor.com/blog/tag/family) [Financial Planning](https://blog.investsafeharbor.com/blog/tag/financial-planning) [Health](https://blog.investsafeharbor.com/blog/tag/health) [Insurance](https://blog.investsafeharbor.com/blog/tag/insurance) [Investments](https://blog.investsafeharbor.com/blog/tag/investments) [Irrevocable Trusts](https://blog.investsafeharbor.com/blog/tag/irrevocable-trusts) [Lifestyle](https://blog.investsafeharbor.com/blog/tag/lifestyle) [Market Perspective](https://blog.investsafeharbor.com/blog/tag/market-perspective) [Philanthropy](https://blog.investsafeharbor.com/blog/tag/philanthropy) [Portfolio Construction](https://blog.investsafeharbor.com/blog/tag/portfolio-construction) [Professional Advisors](https://blog.investsafeharbor.com/blog/tag/professional-advisors) [Psychology](https://blog.investsafeharbor.com/blog/tag/psychology) [Real Estate](https://blog.investsafeharbor.com/blog/tag/real-estate) [Recognition & Awards](https://blog.investsafeharbor.com/blog/tag/recognition-awards) [Retirement Planning](https://blog.investsafeharbor.com/blog/tag/retirement-planning) [Risk Management](https://blog.investsafeharbor.com/blog/tag/risk-management) [Tax Planning](https://blog.investsafeharbor.com/blog/tag/tax-planning) [Uncategorized](https://blog.investsafeharbor.com/blog/tag/uncategorized) [Wealth](https://blog.investsafeharbor.com/blog/tag/wealth) [Wills and Trusts](https://blog.investsafeharbor.com/blog/tag/wills-and-trusts) [![footer_logo](https://blog.investsafeharbor.com/hs-fs/hubfs/premium%20footer%20assets/footer_logo.png?width=180&height=45&name=footer_logo.png "footer_logo")](https://investsafeharbor.com/) - Phone: [(631) 421-4341](tel:(631)%20421-4341) Email: [info@investsafeharbor.com](mailto:info@investsafeharbor.com) - - - [Check out our background on Finra's BrokerCheck](https://brokercheck.finra.org/) - [Contact Us](https://investsafeharbor.com/contact/) - [Client Relationship Summary](https://t1t089.a2cdn1.secureserver.net/wp-content/uploads/2020/07/Form-CRS-June-2020.pdf) - [Disclosures](https://investsafeharbor.com/disclosures/) - © 2022 - Safe Harbor Asset Management, Inc. - 167 E Main St, Huntington NY 11743 - (631) 421-4341 ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Ana Reano", "url" : "https://blog.investsafeharbor.com/blog/author/safeharbor" }, "dateModified" : "2024-04-03T17:45:37.537Z", "datePublished" : "2021-03-23T07:29:00.000Z", "headline" : "Top Benefits for Real Estate Investors to Spring into DSTs", "image" : [ "https://blog.investsafeharbor.com/hubfs/SafeHarbor/Blog_Asset/nyc-spring.png" ], "mainEntityOfPage" : { "@id" : "https://blog.investsafeharbor.com/blog/top-benefits-for-real-estate-investors-to-spring-into-dsts", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://blog.investsafeharbor.com/hubfs/assets_2022/safeharborlogo-250.png" }, "name" : "Safe Harbor Asset Management, Inc" } } ```