If you plan to acquire trading income property in Texas in a tax-free 1031 exchange, there are two things you need to do:
- find a replacement property that meets your investment needs and
- find an investor who is interested in acquiring your exchange property.
For many investors, the former is easier than the latter.
In many cases, this is because investors are more focused on finding a property that meets their requirements than positioning the exchange property to meet the requirements of someone else.
Below, we take a look at some ways in which investors can make their income property MORE ATTRACTIVE to other investors.
NEGOTIATE A LONG LEASE PERIOD
One of the best times to trade an investment property is shortly after the lease has been renewed. A property that has a short lease period remaining is not positioned to generate a stream of secure income over the long-term, which is what every investor wants most. A lease period of ten years or longer is ideal.
ESTABLISH PROFITABLE LEASE TERMS
The lease should have attractive terms. For most commercial income property investors, attractive terms mean:
(a) a triple net lease in which the lease payment is at least average for the market, and
(b) the property owner has total control over establishing new lease terms when the present lease agreement expires.
MAKE NECESSARY REPAIRS
Selling commercial income property is similar to selling a home: no one wants to acquire property that needs a slew of repairs. The most important repairs are those that are necessary for the property to pass inspection, but making aesthetic repairs to sidewalks, windows, and ceilings can have a big impact, too.
TAKE QUALITY PHOTOGRAPHS
Real estate photography is notorious for its poor quality. Considering that most investors will first see your property in a real estate database that a broker maintains, investing in quality real estate photography is a wise decision. Great photographs will help your property stand out in a sea of real estate listings.
