Sanibel Real Estate Investment Strategies

Sanibel Real Estate Investment Strategies

Of course, you have to see it to believe it, but anyone who has watched the dolphin ballet on Sanibel knows full well that the dolphins are having the time of their lives! – Anonymous

Sanibel and Captiva Islands (SanCap) are known for their beautiful beaches. They also have some of the world’s most unique shelling. Even in the aftermath of the major hurricane that hit on September 28, 2022, Sanibel and Captiva continue to offer real estate investment opportunities. Captiva and Sanibel Island Investment real estate has stood the test of time. Their real estate and alternative investments have provided positive returns for many investors in the past and will continue in the future.

Sanibel and Captiva Island Real Estate Investments

There are two investment vehicles Sanibel investors have used. These vehicles include Self-Directed IRAs and 1031 Exchanges. As a real estate investor, you can use either of these vehicles as a tax-deferral strategy.

1031 Exchanges

Midland’s first investment vehicle is 1031 Exchanges. Section 1031 of the Internal Revenue Code allows investors to defer capital gains tax on an investment property’s sale. Save taxes by exchanging any investment-use property for other investment property of equal or greater value. Rather than paying taxes, the IRS allows the deferral of those tax dollars when following 1031 exchange rules.

There are many types of 1031 exchanges. Exchange examples include delayed, simultaneous, reverse, and improvement. One of the most common exchanges we see on Sanibel is property upgrading. For instance, investors sell a two-bedroom rental condominium and upgrade to a three-bedroom condominium. This exchange typically occurs with no additional cost to the investor. Since the investor defers payment of capital gains taxes, they are able to use those funds to reinvest into an asset with higher income potential. You can appreciate the importance of utilizing a 1031 exchange when selling investment real estate. Midland 1031 is here to be your Qualified Intermediary (QI) for your next Sanibel 1031 exchange.

Self-Directed IRAs

Midland’s second investment vehicle is the Self-Directed IRA. Self-Directed IRAs allow individuals to diversify their investment portfolio from the stock market to tangible assets. This vehicle allows for an investor to utilize IRA funds to own a piece of investment real estate in their IRA.  All income occurs in the IRA and thereby, is tax deferred.

Investments You Can Buy With Your Self-Directed IRA

  • Real Estate: Rental and Land
  • Condos/Single-Family House/Multi-Family House/Duplexes
  • Hedge Funds
  • Futures Accounts
  • Limited Liability Companies and Partnerships
  • Limited Partnerships
  • Private Companies
  • Bank Stock
  • Brokerage Accounts
  • Gold and Other Precious Metals

To learn more about 1031 exchanges or to start your Sanibel investment real estate exchange, contact Midland 1031 at 239-333-1031, or reach out to us here.

To learn more about Self-Directed IRAs, contact Midland IRA at 239-333-1032 or reach out to us here.

You may also learn more by downloading our free Real Estate IRA Guide and 1031 Exchange Guide.

We'll end with a famous Sanibel quote by long time Sanibel businessperson and resident: “If we don’t have it, you don’t need it”.
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