There are several reasons that you as a property owner should participate in a 1031 exchange. For those of you who are not familiar with 1031 exchanges, 1031s are a way to defer taxes on the capital gains from a sale of investment property.  1031s can be very complicated and you will also need the help of a 1031 qualified intermediary. There are 5 main advantages to exchanging property.

1. Preservation of Equity – 1031 exchanges allow owners to defer taxes on the capital gains from a sale indefinitely. This allows the owner to roll the gains into a new property over and over rather than pay the taxes. Keep in mind that if you do 1031 exchanges and then at some time in the future decide not to exchange you will owe taxes going all the way back to your original basis.
2. Leverage – You can exchange from a property that you have a high amount of equity or one that you own “free and clear”  into a property of much more value and has a higher cash flow.
3. Diversification – Exchangers can diversify by exchanging out of one property into two or more properties. There are time considerations that must be taken into account. Consult with an attorney prior to engaging in an exchange involving multiple properties.
4. Management Relief – If you as an owner have accumulated several single family rentals that require intensive management you can exchange them for one single investment property that requires substantially less management.
5. Estate Planning – In many cases, several members of a family inherent a single property jointly and cannot agree on what they want to do with it. The family members can exchange the property for several different properties that suit the needs of all family members.

Always consult with an attorney who is familiar with 1031 exchanges.

To find your replacement 1031 ranch for sale, farm for sale, mountain land for sale, equestrian property for sale, or land for sale visit www.landbrokermls.com.

When buying land, whether it is raw acreage, ranches, farms, or just recreational land, there are many factors you should be aware of. Many times problems can be remedied prior to the closing. Taking a little extra time to do your due diligence will save you a lot of headaches in the feature. It is always better to discover problems while they are still someone elses.

When looking at farms for sale, you want to make sure that you consider your needs and make sure the property meets those needs. Factors to consider include, water supplies and quality, location relative to markets, possible annexation, change of use, soil quality, growth corridors, eminent domain, zoning, and government regulatory agencies.

Many of these factors can affect other types of land and you should be aware of them. It is good to utilize professionals such as Real Estate Brokers and attorneys who are knowledgeable in these areas.

When looking for farm land for sale in Colorado, it is a must to have someone who is knowledgeable in Colorado water rights. Colorado uses the rule of prior appropriation for determining water rights and Colorado water rights can be very  complicated. In many cases, you will want to enlist the services of a good attorney with extensive experience in water rights issues. Good land brokers are also very helpful in identifying potential issues with water rights.