Selling a Rental Property in the Pacific Northwest? Here’s How a 1031 Exchange Can Save You Thousands

Are you considering selling a rental property in the Pacific Northwest?
If so, there’s an important strategy you should understand—one that can significantly reduce your tax burden and help you build long‑term wealth. It’s called a 1031 Exchange, and it’s one of the most powerful tools available to real estate investors.

What Is a 1031 Exchange?

To begin with, a 1031 Exchange allows you to sell an investment property and reinvest the proceeds into another, all while deferring capital gains taxes.

In other words, instead of paying taxes upfront, you keep that money available—allowing you to reinvest more, grow more, and ultimately earn more.

Why It Matters in the PNW

The Pacific Northwest real estate market continues to show strength. Property values have risen consistently, and rental demand remains high.
Consequently, many property owners now have substantial equity built up in their rentals.

Because of this appreciation, a 1031 Exchange offers several key advantages. For example, you can:

• Sell at a strong price, while deferring taxes

• Upgrade to a larger or better‑performing property

• Shift your investments to a different PNW city or submarket

• Diversify your portfolio with commercial or vacation rentals

• Reduce management stress by consolidating properties or changing asset types

Altogether, these benefits make the 1031 Exchange especially appealing to PNW investors.

How a 1031 Exchange Works

To successfully complete a 1031 Exchange, timing and process are critical. Additionally, each step has rules you must follow:

1. Use a Qualified Intermediary (QI)

First, the IRS requires that a QI hold the sale proceeds. You cannot take possession of the funds yourself.

2. Identify Your New Property Within 45 Days

Next, once your property closes, you have 45 days to identify potential replacement properties—in writing.

3. Close on the Replacement Property Within 180 Days

Furthermore, you must finalize the purchase within 180 days of your original sale. Missing this deadline would disqualify the exchange.

4. Confirm the Properties Are “Like-Kind”

Finally, both the property you sell and the one you buy must be held for investment or business use.
However, this requirement is broad, meaning you can exchange between many different property types.

Is Now a Good Time?

Given ongoing market activity throughout the Pacific Northwest, 2025 may be an ideal time to initiate a 1031 Exchange.
Many investors, for instance, are using their accumulated equity to:

• Reposition their portfolios

• Enter new markets

• Improve cash flow

• Reduce maintenance demands

As a result, a 1031 Exchange can help you realign your investments without sacrificing equity to taxes.

Why Work with a PNW Real Estate Expert?

Because a 1031 Exchange has strict timelines and rules, working with a knowledgeable local professional is essential.
Furthermore, having the right advisor ensures you avoid costly mistakes and uncover the best opportunities.

When you work with me, you receive:

• Detailed insights into PNW market trends

• Guidance on pricing and timing your sale

• Connections to trusted Qualified Intermediaries

• Support identifying promising replacement properties

• Step‑by‑step assistance from contract to closing

Altogether, this helps your exchange go smoothly and successfully.

Let’s Talk About Your Next Investment Move

If you’re ready to explore your options or simply want to understand how a 1031 Exchange works, I’m here to help every step of the way.

📞 Call or Text: 360‑701‑2448
📧 Email: jenjohnstonrealestate@gmail.com
🌐 Visit: www.jenjohnstonrealestate.com

Let’s expertly navigate your next investment move and grow your wealth strategically and confidently.