Why Delaware Statutory Trusts Are Becoming Popular
Investors have multiple benefits if they take advantage of the Delaware Statutory Trusts. If you are an experienced investor then you already know that if you use them correctly you can sue them to increase your income and to preserve your wealth. The majority of investors use this strategy when they want to exchange buildings, because they do not have to pay taxes for the profit they make. But if this is the first time you are thinking to use this strategy, then you should read the advantages of the Delaware Statutory Trusts, because there are some reason why they have become so popular lately.
You do not have to be an active manager
More and more investors prefer the Delaware Statutory Trusts because they can benefit from a passive income steam. This is one of the benefits you have if you previously had an active role in a real estate business via a 1031 tax-deferred exchange. You already know how overwhelming is to be an active real estate manager so this strategy will offer you the advantage of pausing this. You may had enjoyed this occupation for a period, but you do not want to do this until you retire. The Delaware Statutory Trusts will offer you the possibility to acquire a professional managed institutional asset, and this means that you will benefit from income without having to deal with management tasks.
You have access to long term triple net leased properties
If you are asking yourself Why Delaware Statutory Trusts Are Becoming Popular you should know that depending on the type of investment you make, this strategy can offer you access to this type of properties that range from 5-20 years on the first lease term. This offers you the possibility to benefit from income for a long period of time, and you will not find yourself in the situation of dealing with a lease renegotiation. You will not have to get in touch with multiple tenants because this strategy guarantees you a 5-20 years of income.
There is potential for non-recourse debt vs. recourse debt
When it comes to the Delaware Statutory Trusts the debt is non-recourse, and this means that it will not be your liability but the one of the lender. This will offer you the possibility to protect your other businesses in case this investment will prove to be a failure. In case you plan to retire after you close this deal, then this is the perfect strategy to use, because it offers you safety. In case you will have to face a debt, the property is the one that will become the remedy, your other investments and funds will not be affected.
They are not expensive and they are easy to be financed
You will not have issues to obtain the loan because you are the only one who is involved in the business. For example, if you would get involves into a TIC arrangement you will have to wait for the approval of other 35 borrowers. Also, you do not have to be qualified for being able to participate to the trust.