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Honolulu demographic information

How you can benefit from a 1031 Exchange

Monday, May 21st, 2007

In 2001, Honolulu County had 881,295 full-time residents.

Honolulu County had 881,295 full-time residents and an additional 200,000 tourists visiting the island at any time. Approximately 59% of the resident population is in the age group 18 to 65. In the last decade, Honolulu's population grew by 4.8%.

The island is renown for its diverse racial mix. 20% of the population reports two or more ancestries; 20% are whites; 46% are Asians; and 8.9% Native Hawaiian or Pacific-Islander ancestry. The island's population density is 1,460 person/sq. mi.

According to the 1997 economic census, retail sales per capita was $9,466. The island received nearly $7.86 billion in federal funds and grants in 2002. Median household income was $44,394 (1997 model-based estimate). Honolulu has approximately 2.95 person per household.

Honolulu's workforce is ranked 22nd in the nation for knowledge based jobs. Almost 28% of the work force has a high school diploma, 8% have associate degrees, 19% have bachelors degrees, while 8% have professional or graduate degrees.

Internet usage is high with 62% of Honolulu residents have access to the Internet. The city is ranked 25th among various metropolitan areas in the nation. 54.6% of the residents own their own homes.

Projected Population

72% of Hawaii's population currently resides in Honolulu County. This trend is projected to continue into the future, with Honolulu County still maintaining 70.5% of the state's population in 2025.

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Friday, May 18th, 2007

1031 Exchanges: the Best Way to Defer Capital Gains Taxes

Many real estate buyers take advantage of the 1031 Exchange, a real estate investment technique that enables sellers of income property to defer paying capital gains taxes.

According to the 1984 Congressional Tax Reform Act, owners can sell an income property and defer capital gains tax by identifying a "like-kind" exchange property within 45 days and then reinvesting the profits within 180 days.

By 1986, an increase in capital gains taxes had re-ignited interest in 1031 Exchanges. In 2002, the IRS issued new guidelines on how a group of buyers can pool their equity and acquire larger properties, and each still satisfy their individual 1031 Exchange requirements and defer capital gains taxes.

Why a 1031 Exchange?

Exchanging or "trading up" under Section 1031 and the 2002 IRS TIC guidelines allows owners to re-invest in larger commercial properties while also deferring capital gains taxes.

The most common reasons for exercising a 1031 Exchange are:

1. Exchanging from commercial property which can't be readily refinanced, such as land, to improved property which will support a new loan. This makes it possible to obtain cash, and trading from non-productive land to improved property can also create improved cash flow.
2. Exchanging from a high-appreciation property (such as a rental house or apartment) to a high-cash-flow property (such as a retail center), or vice-versa, depending on investment objectives.
3. Exchanging from a property with high debt service payments into a property with lower payments or lower interest.
4. Exchanging for a property that will be easier to sell.
5. Exchanging to change your lifestyle. For example, exchanging into a property requiring no management for a property owner wanting to travel or retire.
6. Exchanging from several smaller properties to a single larger building to consolidate ownership benefits.
7. Exchanging from a larger building to several smaller properties to improve liquidity or to diversify ownership among several persons.
8. Exchanging to convert the nature of the investment. For example, exchanging from a rental house or apartment to a small medical building for the doctor who wishes to practice in a building he owns.

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