1031 EXCHANGE TRENDS FOR 2024

By Juno Kenny, VP, Exchange Manager, and Shannon Kinnard, VP, Exchange Officer, Genesis Bank

As we navigate through 2024, the 1031 Exchange landscape is evolving, driven by a combination of market forces and investor behaviors. This year, several key trends are emerging that are reshaping the way investors approach these transactions. From a surge in reverse and improvement exchanges to the growing popularity of passive investments, these trends are influencing how investors manage their tax liabilities and optimize their real estate portfolios.

• Reverse / Improvement Exchanges: Investors are more commonly choosing these types of exchanges to accomplish their tax deferral goals. Reverse Exchanges can offer flexibility to quickly take advantage of investment opportunities in the current market, and Improvement Exchanges can offer the ability to maximize the use of the sale proceeds and to add value to a property through construction or renovations.
• Passive Investments: As passive investment options grow in popularity and availability, we expect to see movement from active to passively managed assets. Additionally, a lack of suitable replacement properties will lead more exchangers to push up against identification deadlines, and DSTs can be an attractive last-minute option given their ability to close in a short period of time.
• Seller-Financing: With interest rates keeping the cost of financing high, seller financing will continue to be an attractive option for property buyers looking for low-cost financing. As the Exchanger, offering seller financing to buyers of a relinquished property can lead to issues funding your replacement property, so it is crucial to plan accordingly.

The trends shaping 1031 exchanges in 2024 reflect a dynamic and evolving market. Investors are increasingly exploring innovative strategies while adapting to the changing investment landscape. By staying informed and seeking expert advice, investors can make the most of these trends to maximize their investment returns. Connect with our team by calling 800.797.1031 or explore further details on our website: https://www.mygenesisbank.com/1031Exchange