REIT Investing in DFW to Defer Capital Gains Tax | The Peak Group

If you have a considerably-sized portfolio in DFW that you’ve been enjoying under the care of property management for some time, you’re already aware of the benefits of passive real estate investing in our area. Even in the wake of COVID-19, our real estate market in DFW is about to resume with strong summer sales following relaxed restrictions on home showings. Even when real estate experts were concerned that COVID-19 might cause a residential real estate collapse, the Dallas and Fort Worth markets were considered some of the least vulnerable across the entirety of the nation.

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Still, the aftershocks felt by the stumbling stock market in the early days of the crisis had many investors either seriously considering tapping into their assets or looking for ways to leverage their equity when a direct sale was impossible. In some ways, this hard stop on real estate sales during the crisis made most property investors realize the powerful potential of their residential portfolios in a time when commercial assets were crumbling. It is from this mindset that many investors now are considering a sale on their properties—while the getting is still good.

However, an outright sale comes with a few significant drawbacks for investors:

  • Selling your assets now as a reaction to the market means you would lose access to the benefits of passive real estate investing—including prioritized, reliable income while other industries are curbed or collapsing.
  • Selling your portfolio now means having to deal with the impact of the capital gains tax if your assets had appreciated over the years—especially if you happened to acquire any property around 2009 when prices were at significant lows.
  • Your portfolio is stabilized by the diversifying effect of real estate on your other investments. For many investors who approach real estate from a speculator’s mindset, this was all too apparent after COVID-19 finished gutting the stock market.

With the above issues in mind, how can investors maintain their access to the benefits of passive real estate investing while converting their tangible assets into something more liquid? If you want to be able to easily access your capital while still appreciating the perks of wealth formed through residential real estate holdings, you should be considering REIT investing.

An UPREIT Works for Investors Looking to Defer Capital Gains Tax

Capital gains taxation is probably the greatest blockade most investors encounter when trying to make decisions about liquefying their holdings to improve their access to pliable capital. It’s one of the topics we cover most heavily with our articles here at The Peak Group. We want to save investors like ourselves from having to lose what they’ve worked so hard to earn to a tax that, essentially, punishes you for being successful.

While it’s true that taxation is a constant in our lives, the amount you have to lose isn’t set in stone—depending on how aggressive you are when pursuing your options for financial freedom. Certain tax deferment strategies will help you do just that: defer the capital gains tax on your properties to further down the line. What makes REIT investing—and in particular, UPREIT investing—so unique as a tax deferral strategy is that it also helps you parse your assets into easily-tapped capital.

In an UPREIT structure, this is done by way of converting your portfolio of properties into like-value operating units, privately managed for you by a professional operating partnership. A vast majority of the returns produced by an UPREIT structure for those who own a piece of the collective portfolio are returned to investors, so it’s in the best interest of both the property owner and operating partner to yield extensive gains on the properties they manage.

However, until you convert your operating units into cash assets, they remain tax-deferred. This allows investors who diversify their wealth through a DFW UPREIT to access the perks of a liquid asset combined with the reliable returns of residential real estate holdings. This is the kind of passive real estate investing you were dreaming of when you became a property investor—and it’s only available through REIT investing.

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Don’t Throw Away What You’ve Earned to Taxes

We know you’re ready to enjoy what you’ve earned as an investor. However, at The Peak Group, we don’t believe you should have to sacrifice 15-30% of that to the capital gains tax.

Allow us to show you a better way with the earning potential you would have access to with the Peak Housing REIT. A DFW UPREIT gives investors access to the kind of returns you can only dream about when investing in single-family residential properties. Even when you have properties managed professionally by an expert property management team, you still have your own overhead to account for. There has never been an easier—or better—way to grow your wealth.

Let the experts at The Peak Group be your guide to true financial freedom: get in touch with us to learn more about how REIT investing is your next smart move in today’s market!