More than 30 Years in
Business in San Diego
KOGO News Radio 600

Own Investment Real Estate? It’s a Seller’s market

For those of us who own investment real estate with simple inflation and given periods of supply and demand, we have seen our property values dramatically increase in value over time. Other than dealing with what we refer as “those Terrible T’s” including tenants, toilets, trash, turnover, toddlers, teenagers, telephone calls, termites and taxes, we treasure our rentals as part of our family. What we often don’t take time to consider is “what are my current and longterm plans for my properties?” Maybe it’s time for some Terrific T’s: Tennis, Travel, and more Time with family?

As financial advisors who provide overall comprehensive personal financial planning, we also have an expertise in helping our clients evaluate options for their
investment properties. We discuss the pros and cons of many options including:


As part of our evaluation, we are reminded that generally we are provided three basic benefits of investment property ownership: Tax benefits, income and potential appreciation. Many of the tax benefits of depreciation and other expenses decrease as years pass and tax benefits fade. As we age, our goal of long-term appreciation many times moves to a goal of income as a priority.

As part of our personal financial planning, we evaluate exactly how much income you are “taking home” after expenses. I am reminded of a client who happily said he had $1 million equity in his duplex and was receiving $5,000 per month (6%) in rental income. A simply review of his tax return (Schedule E) indeed showed gross income of $60,000; however, after expenses, His actual “take home” was $20,000 annually or $1,600 per month, or approximately only 2%.

Our “rule of thumb” is a take home of at least 5%. He was, unfortunately, also surprised to learn his $20,000 was also fully taxable pushing him into a higher tax bracket.

If you own investment real estate, be sure to consider your current and long-term goals for your property and work with experienced advisors who can assist you in helping you make choices that match you and your family’s financial goals. Time for some Terrific T’s?

It is important to note that DST investing is subject to specific eligibility criteria, and only individuals who meet the definition of an accredited investor are permitted to participate.

DST 1031 properties are only available to accredited investors (typically defined as having a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last two years; or have an active Series 7, Series 82, or Series 65).  Individuals holding a Series 66 do not fall under this definition) and accredited entities only.  If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney. Before considering a DST investment, it is crucial to evaluate your eligibility as a qualified investor. Our team is committed to assisting you in this process, ensuring that you meet the necessary requirements to participate in DST opportunities. Additionally, we are here to address any questions you may have and provide detailed information to guide your investment decisions.

Please be aware that DST investments involve risks and considerations which include but are not limited to substantial fees and expenses, inability of the DST to actively manage the property, strict timing limitations and risk of not meeting requirements for 1031 exchange tax treatment, and other negative tax consequences. There are risks associated with investing in real estate and Delaware Statutory Trust (DST) properties including, but not limited to, loss of entire investment principal, declining market values, tenant vacancies, lack of liquidity with restrictions on ownership and transfer. Potential cash flow, returns and appreciation are not guaranteed and could be substantially lower than anticipated. Diversification does not guarantee profits or protection against losses.

Additional risks and considerations related to investing in 1031 DST commercial real estate include, but are not limited to, general real estate risks, financing risks, tax risks, interest rate risk, management risks, operating risk, market risks such as supply and demand, changing market demographics, tenant turnover, tenants inability to pay rent, acts of God such as earthquakes, floods or other uninsured losses. There are also potential risks relating to the trust structure and the potential for adverse changes in laws and regulations. This material is not to be interpreted as tax or legal advice.