Sarasota Real Estate Is Booming for Investors
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Sarasota has developed as Florida’s cultural hub, long known for its vibrant arts community, tasty restaurants, unique shopping, and stunning beaches. But why is everyone flocking to the West Coast of Florida? Florida’s number one asset is real estate. Sarasota is cashing-in with beautiful homes and ample commercial properties.
Since the original writing, of this article in January 2021, the entire west coast of Florida is experiencing incredible growth. The spring of 2022 saw some large price increases from Tampa to Naples. This year in the spring of 2023, demand in Sarasota has gone through roof. Higher interest rates have not slowed down the market. Hurricane Ian caused part of the boom in the fall of 2022, which has caused coastal real estate in Lee and Collier counties to slow down while the reconstruction takes place.
Midland Trust has been working with residents and Sarasota real estate investors since 1997. The population has doubled, and the demand for real estate continues to go up. Where are investors making money in Sarasota? Investors in that part of the state are smart and patient. Two strategies Sarasota real estate investors use are 1031 exchanges and self-directed IRAs. Both are tax-deferral strategies that help investors build wealth.
1031 Exchanges
If you own investment real estate, “1031 exchange” should be in your vocabulary. A 1031 exchange allows investors to defer the taxes (capital gain, depreciation recapture, state, NIIT) when they sell investment or business-use real estate provided that they purchase new investment or business-use real estate within 180 days. 1031 is a tax code section that has been around since the 1920s and is a valuable strategy for real estate investors. The regulations require that you use a Qualified Intermediary to facilitate the exchange. Exchanges are easy and efficient to perform. Typically, real estate used in a 1031 exchange includes rental homes, rental condominiums, business real estate, farmland, and other deeded real estate. You must identify the replacement property 45 days after the sale of the relinquished property. For more 1031 exchange rules and regulations, read our 1031 exchange guide.
Self-Directed IRAs
The other great tax tool that investors use is a self-directed IRA. With a self-directed IRA, you can diversify your retirement account by having the opportunity to invest in alternative assets in addition to stocks and bonds. If you are an expert in real estate investing, a self-directed IRA allows you to use your expertise inside your IRA account. For more information on a Midland self-directed IRA, go to www.midlandtrust.com and get started today.
It is interesting that John Ringling moved the winter home of Ringling Bros. and Barnum & Bailey Circus to Sarasota from Connecticut in 1909. Today, residents of New York, New Jersey, and Connecticut continue to move to Florida. They move because of Florida’s beautiful weather and low taxes. Smart investors who sell an investment property in the Northern states can avoid federal and high state taxes with a 1031 exchange. A little planning with a 1031 exchange can go a long way.
If you want to learn more about self-directed IRAs, please contact Midland at (239) 333-1032. Or, head to our website at www.midlandtrust.com. For information regarding 1031 exchanges, contact Midland 1031 at (239) 333-1031 or visit www.midland1031.com. Happy real estate investing.