[USER]

We are currently selling a property and anticipate netting $200,000 after deducting $25,000 to $30,000 in taxes.

We are considering utilizing a 1031 exchange to defer taxes and invest in real estate in the Austin market, specifically through short-term rentals (STR) as our primary strategy and mid-to-long-term rentals as a fallback option.

However, we lack experience with STR and are struggling to estimate profitability and expenses.

We are hesitant to risk the $200,000 plus a $300,000 mortgage to save $25,000 in deferred taxes, given the current downturn in the Austin market.

We are seeking advice on STR or referrals to real estate agents with experience investing in STR.

Alternatively, should we simply pay the $25,000 in taxes and invest the remaining $200,000 in index funds?

[Karl]

If you don’t know the market or the STR game, you are better off paying the tax and investing elsewhere.

1031 is good in theory, but the timing rules can make it tricky to find the right replacement property in the 45 day identification window.

[Matt]

Why short term rentals? Use the 1031 and buy a 4+ unit multi family. Your revenue would be more stable and you save on taxes while getting the depreciation expense.

A lot of tax advantages to real estate.

[Andrea]

yes, stay away from real estate, DCA into SCHD and VTI every month

[Kris]

I live in Austin and can recommend a fantastic realtor that works with investors, if you like.

[Author]

Posts