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It can be argued that there has never been a time in history when the 1031 exchange has been more critical to preserving wealth for property owners than today. The US has experienced tremendous capital growth, and real estate owners are now sitting on an unprecedented amount of equity. Additionally, landlords in major growth areas like California are potentially feeling the squeeze of state and local regulations as they look to exit for more landlord-friendly states.

A triple net lease (NNN) is a lease agreement on a property where the tenant or lessee is responsible for paying all three “net” expenses – real estate taxes, insurance, and maintenance – in addition to any fees covered by the lease agreement.

This comprehensive guide will explain cap rates and how to calculate them. We also provide valuable insights for evaluating investment potential using this metric. So, let’s dive into the world of cap rates and unlock their power together.

A 1031 exchange is one of the effective tax-deferral strategies for real estate investors, allowing them to sell an investment property and reinvest the proceeds into a “like-kind” property while deferring capital gains taxes. However, to qualify for the tax benefits, investors must follow strict IRS guidelines—one of the most critical being the identification of replacement properties within 45 days of selling their original asset.