Retirement planning? Don’t forget investment properties



You plan ahead for retirement and are determined to invest in a diversified basket of stocks, bonds, and alternative investments. Maybe you don’t have access to profitable real estate right now, or maybe you are a landlord, either as your main business or as a part-time investor. If the latter, you are probably willing to give up responsibility in favor of a passive approach that allows you to try to be less nervous and have more pleasure.

Either way, you can invest in commercial and multi-family properties after retirement without the daily hassle of a landlord. There are a number of passive real estate investments that can help you achieve your goals, dreams and goals. Here are four of them.

Real Estate Investment Trusts (REITs)

The publicly traded REIT market has been around for a long time and many people enter it through their retirement plans and exchange brokerage accounts. REITs are generally companies that own and operate real estate, so you are investing in a company, not just the underlying real estate. REITs pay their income in the form of dividends, which are tax deductible.

The biggest disadvantage of REIT investments – apart from their high correlation with the general stock market and the associated volatility – is the inability to defer taxation of any capital gains from the sale of shares. In other words, when you sell your REIT shares, you will have to pay capital gains tax on any profits.

Delaware Legislative Trusts (DST)

With DST, which is a form of direct ownership of real estate, you have the option to defer capital gains tax on profits until the profits are reinvested in another investment property. (Reinvestment occurs in the form 1031 exchanges(which your tax or legal advisor can tell you more about.) This is one reason, but not the only reason to consider Daylight Saving Time.

DSTs are organizations that own investment rights such as income-generating real estate. Most types of real estate can be owned in DST, including industrial, multi-unit, warehouse, medical and retail. Often, properties are of institutional quality similar to those owned by an insurance company or pension fund, such as a 400-unit Class A apartment complex or a 100,000-square-foot industrial distribution facility leased to a non-profit organization. Luck 500 logistics and transport company. The Asset Manager (also known as the DST sponsoring company) takes care of the property on a daily basis and processes all investor reporting and monthly payments.

Investments in DST are used by money investors with a typical minimum of $ 25,000, as well as investors looking for property replacements as part of a tax-deferred 1031 exchange solution. To learn more about planning your retirement with DSTs, or how they can be used in the exchange 1031, visit

Tenant Total Property (TIC)

The TIC structure is another way to passively invest in real estate as part of a retirement planning strategy. With TIC, you own a share of the property and receive a proportionate share of the potential income and real estate gains. As a TIC investor, you are usually given the opportunity to vote on major real estate issues, such as whether to sign a new lease with a tenant, refinance a mortgage, or sell a property.

While TIC and DST investments have their own nuances and differences, they often hold ownership of the same types of property. DST is generally considered a more passive investment vehicle. Both DST and TIC are subject to the 1031 tax regime as described above.

Qualified Opportunity Zone Foundations

Qualified Opportunity Zone Foundations, which were allowed by the Tax and Employment Reduction Act of 2017, are a form of private equity funds. They offer some relief for capital gains tax deferral and tax abolition. A fund of this type may invest in real estate or an operating business in the Zone of Opportunity, usually in a geographic area of ​​the United States that has been identified in this way by the government because it may be underserved or overlooked.

If you are seriously considering this investment option, keep in mind that there may be a higher level of risk depending on the location of the property, and the time horizon of the fund can be as long as 10 years, which means tying your capital for this. length of stay in an illiquid asset. A Skilled Opportunity Zone fund can provide potential cash flow and rewards, as well as positive economic and social impact on the community.

Bottom line: Don’t forget about passive real estate investments when planning your retirement. Investment property can provide a diversified portfolio rich in stocks or bonds, with income potential in addition to value appreciation and tax benefits, including the ability to defer taxes on capital gains. (Diversification does not guarantee protection against losses or appreciation, although many believe it is a smart investment strategy.)

If you are or have been a landlord, passive real estate investments also allow you to continue investing in the real estate market without the headaches of dealing with tenants.

This material does not constitute an offer to sell or a solicitation to buy any security. There are significant risks associated with investing in real estate securities, including illiquidity, vacancies, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning / operating commercial and multi-family property, financial risks, potential adverse tax consequences. , general economic risks, development risks and long periods of storage. There is a risk of losing the entire principal amount of the investment. Past performance is not a guarantee of future performance. Cash flow potential, profit potential and potential appreciation are not guaranteed. Securities offered through Growth Capital Services, a FINRA member, SIPC, Office of Supervisory Jurisdictions, located at 582 Market Street, Suite 300, San Francisco, CA 94104.

Founder and CEO of Kay Properties and Investments, LLC

Dwight Kay is the founder and CEO of Kay Properties and Investments, LLC. Kay Properties is the national 1031 investment exchange. The platform provides market access with 1,031 exchange items, 1,031 exchange items available only to Kay customers, independent consultations on sponsoring companies, full due diligence and validation of every 1031 exchange offer (typically 20-40 offers) and 1031 aftermarket.


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