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Investing in Real Estate

Chinese Investment in Residential Properties on Oahu

Passion among Chinese investors for acquiring foreign properties has been on the upswing in recent years. Currently, Chinese investors represent a small segment of the O‘ahu real estate market. However, increasing transactions involving Chinese investors, as well as their penchant for purchasing luxury properties, are receiving more and more attention.

Investing in Real Estate

The Ultimate Surfers Guide to Living in Oahu

Surf to Live, Live to Surf

surf guide oahu

Welcome Home

Every surfer worth his weight in wax has dreamed about owning property in Hawaii.  Whether it's a vacation home for surfing excursions or a full-time residence to leave the mainland behind, surfers far and wide come to Hawaii for the incredible waves and Aloha spirit.  Your problems, anxieties, and worries disappear the second you paddle out (unless you're surfing the 10 ft.+ bombs at Pipeline). 

Investing in Real Estate

Can You 1031 Exchange Your Vacation Home or Second Home?

In my last three blogs of this four part series, we went over the Benefits of a 1031 Exchange - Part I, Different Types of 1031 Exchanges - Part II, and The Middleman to Complete a Successful Exchange - Part III

In this last segment, I would like to elaborate on a 1031 Exchange question I’m asked often, “Can I complete a 1031 Exchange with a vacation home or second home?”

And the short answer is yes.

Here’s what you need to know about exchanging mixed-use vacation home.

In 1981, the IRS issued a Private Letter Ruling (PLR) stating that you could 1031 Exchange out of a vacation rental and into another investment property if it was held as an investment as well as personal enjoyment. 

In 1991, the Department of Treasury issued the Deferred Exchange Regulations that went against the IRS's PLR. It stated that an Exchange must be held for investment only and not as a second home or vacation rental with the ability to use it for personal use. 

During this time, it was extremely confusing determining if a vacation rental or second home would qualify for a 1031 Exchange. 

Finally, in 2008, the IRS issued a Revenue Procedure clarifying the guidelines for qualifying a vacation rental or second home for a successful 1031 Exchange.