COLLEGEVILLE, PA — 1031 CORP. released new research examining the factors that contribute to successful 1031 exchanges, based on a survey of more than 400 real estate investors and industry professionals.
The study included responses from 407 participants, including 151 real estate investors and 256 industry professionals such as accountants, attorneys, real estate agents and financial advisors.
According to the survey, 74% of investors who complete their first 1031 exchange go on to complete additional exchanges, most commonly three to five transactions over time.
The research found that investors are primarily influenced by economic factors rather than tax considerations when deciding whether to pursue exchanges.
Property values were cited by 68% of respondents as a key decision factor, followed by cash flow potential at 63% and interest rates at 48%.
Margo McDonnell, president and chief executive officer of 1031 CORP., said the findings suggest advisors may need to adjust how they approach conversations with clients.
“Most advisors frame 1031 exchanges for tax deferral,” McDonnell said. “The key is starting 1031 exchange conversations earlier and leading with what investors actually care about, including property values, cash flow and market conditions.”
The study also found that early planning plays a role in successful exchanges.
The company said starting discussions during disposition planning, rather than shortly before closing, allows investors more time to identify replacement properties and manage exchange timelines.
Survey respondents also reported that rising interest rates are affecting investor decision-making.
About 83% of professionals surveyed said interest rates are influencing how clients view real estate investment opportunities.
Based on the findings, the company outlined several strategies for advisors working with clients on 1031 exchanges, including beginning discussions earlier, focusing on investment fundamentals and helping clients identify replacement properties before listing existing assets.
1031 CORP., headquartered in Collegeville, facilitates tax-deferred real estate exchanges as a qualified intermediary.
The company said it plans to share additional guidance from the research through webinars and industry resources during 2026 as it marks its 35th anniversary.
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