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What is a DST Property? Should You Invest in One

What is a DST Property? Should You Invest in One
Posted By: Stephanie Snyder on June 05, 2021

A DST generally stands for Delaware Statutory Trust. It is primarily a legal unit or entity that enables prospective investors to combine or pool finances to buy real estate shares. You need to know that DST usually offers attractive rewards over ordinary 1031 exchanges.


These benefits include minimal landlord responsibilities, limited liability, plus flexibility. Here is why you need to grasp more about a DST property and why you should invest in one:


You find that several DST property offerings are usually syndicated. Moreover, they offer organizational quality like industrial warehouse housing, student housing, senior living, hotels, luxurious apartment buildings, and medical buildings. You find that most of these property assets are leased by credit-worthy, nationally reorganized tenants. Hence, these tenants regularly offer commercial securities on the prospective lease.


Smaller real estate investors find it hard to purchase higher-grade real estate assets. However, the DST property structure has made it possible for investors to own shares of cash-flowing commercial and residential properties.


Benefits of A DST Property


1. Immediate Access


You need to know that a DST relieves an investor the stress of beating the two deadlines of an average 1031 exchange. It does this by offering instant access to specific pre-qualified similar properties.


2. The Ability To Invest with Limited Finances in Institutional-Grade Properties


You find that several DST investments are properties that small or mid-sized investors cannot afford. Therefore, by combining or pooling funds with other potential investors, you can get to have a share in a large property. Additionally, you will be in a position to gain a good amount of interest due to the value of the well-managed properties.


3. Diversification of DST Properties


Investing in a DST will help get immediate diversification of your property and portfolio. You should know that in an ordinary 1031 exchange, you are purchasing one replacement real estate asset. Furthermore, the property you buy will have no diversification of the prospective real estate location or type.


4. Outsource Real Estate Management


Outsourcing will help you ease the stress of managing the property. Hence, you will avoid and reduce the responsibilities of dealing with occupant issues and being a landowner. You find that outsourcing will help you reduce workload.



Also, you will enhance efficiency through the help of professionals to manage your properties.


The latter will help you focus on other vital things in your life. Furthermore, you will be in a position to earn passive income in the comfort of your home. If you look forward to outsourcing management for your property, you can consider the DST 1031 exchange.


By using this approach, you will able to remove yourself from the daily headaches of property management. Additionally, you will get the chance to diversify your equity, thereby reducing risks.


5. Closed-End Money Set-up


You find that the DST property is closed once the properties are held or secured, and the limit for the sum of potential investors is attained. Hence, the DST scheme is instantly completed, and no extra shareholder will be placed on the list. Consequently, you find that this limit is set up to prevent the worth or value of a former investor’s interest from being diluted.


6. **** Regulated


When you invest with DST, you will be assured of regulatory compliance with significant investor policies. You need to know that DSTs are controlled by ****, and they can merely be bought through an investment advisor. Also, you need to ensure that the investment advisor is licensed. Therefore, ensure you follow the regulatory compliance guidelines to help you maneuver around when investing with DST properties.


7. Limited liability


You should know that the DST generally owns the prospective properties and has limited liability responsibilities. Moreover, investors usually receive benefits in interest, such as tax benefits and pass-through earnings.


8. Non-Recourse Debt


The DST guarantor company usually obtains institutional funds on individual properties. You find that the debt is primarily non-recourse mainly to the potential DST investors. Furthermore, it completes the individual debt-replacement needs of the prospective 1031 exchange. It also offers write-offs involving interest payments.





In conclusion, these tips will help you learn more about DST properties in general. Hence, ensure you thoroughly do your research concerning DST properties and why you should invest in one. After getting the necessary information through research, you can now start investing in the properties. Therefore, you will be at the forefront when you choose DST properties as your investment option.


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