Nathan Colmer | The Van Dyk Group
C: 609.290.4293 | O: 609.492.1511
The LBI NJ real estate market has long been an area of good investment potential. Like any financial market, the LBI real estate market experiences high points and low points but over the long term, home prices on LBI have shown substantial growth and a positive return on the investment. This is to say nothing of the wonderful summer memories that are made from owning a house at the house or the lucrative summer rental income realized from seasonal rentals on Long Beach Island. Since the real estate market on Long Beach Island is primarily one of second homes and investment properties, 1031 tax exchanges can often be a useful tool to help protect yourself against taxes and build wealth. While you should consult an accountant or a 1031 tax specialist, I will be giving you some basic information on 1031 tax differed exchanges and why a 1031 Tax Exchange on Long Beach Island can make sense in the LBI NJ real estate market.
A 1031 tax exchange on Long Beach Island offers the ability to defer the tax paid on capital gains for an investment property when that money is rolled over to a new, and more expensive, investment property. The process involves first listing your house on Long Beach Island for sale and contracting a buyer as you would in any LBI real estate transaction. After an agreement is signed, an Exchange Agreement is signed where the property transfers to an intermediary, usually an attorney, an exchange company of other trusted 3rd party. The sale transaction proceeds as any transaction would and settlement occurs. After settlement, you have 45 days to enter into a contract of sale for a qualifying replacement property.
Like any financial investment, there are rules and regulations that must be followed and a 1031 Tax Exchange on Long Beach Island is not for every buyer and seller. A 1031 Tax Exchange on Long Beach Island applies only to investment properties (not second homes) and it is important to remember that this when the replacement property is sold you must either pay the taxes due or roll the money over into another investment property. There are some key advantages to a 1031 tax exchange such as:
There are many way to benefit from the purchase or sale of a home on Long Beach Island so it is important to understand the options available to you before entering into any LBI NJ real estate transaction. Apart from understanding the current market trends, you should have a firm grasp on the key issues in our market right now such as flood insurance, new construction on Long Beach Island and and the programs available to those looking to buy or sell real estate on Long Beach Island New Jersey.
For more information about the LBI real estate market or 1031 Tax Exchange on Long Beach Island please do not hesitate to contact me, Nathan Colmer anytime and I will be happy to answer any questions you have!