1031 Exchange Opportunities in Tippecanoe County: How to Roll Equity into Bigger Deals

If you’ve owned investment property in Lafayette or West Lafayette for a few years, chances are it’s gained some solid equity. Instead of cashing out and paying capital gains taxes, many local investors are now using 1031 exchanges to trade up — rolling their profits into bigger, higher-yield assets while deferring taxes.

In a market like Lafayette and West Lafayette, where appreciation and rental demand remain steady, this strategy is a smart way to build long-term wealth without leaving the area.

First Off, What Is a 1031 Exchange?

A 1031 exchange — named after Section 1031 of the IRS tax code — lets investors defer capital gains taxes when they sell one investment property and reinvest the proceeds into another “like-kind” property.

Investors must identify a replacement property within 45 days of selling and close within 180 days. The catch? You have to reinvest in a property of equal or greater value and use a qualified intermediary to handle the exchange funds. I can help you locate both of those, don't worry. 

This approach has become especially popular with local investors looking to scale up from single-family rentals into small apartment buildings or commercial spaces — without triggering a big tax bill or getting to far into the unknown with your gained equity. 

OK, So Why Does Lafayette & West Lafayette (Tippecanoe County) Make Sense for 1031 Investors?

With little research, its easy to see that Tippecanoe County offers the perfect mix of appreciation, stability, and rental demand that makes exchanges work well.

• Consistent value growth: Home values in Lafayette and West Lafayette rose dramatically from 2020-2024, (like 54% if you are looking at the Federal Housing Finance Agency (FHFA) All-Transactions House Price Index)--- and as this trend has slowed in 2025 and expected to stay that way in 2026, that gained appreciation over the recent years creates equity you can roll into a larger property.

• High rental demand: Asking dataUSA, Nearly 45% of residents in Tippecanoe County rent their homes, which is about 10% higher than the national average, this is thanks to a mix of students, university staff, and young professionals. - For investors this means the game board is bigger compared to other areas. 

• Local economic anchors: Purdue University’s 2024 Economic Contribution Analysis found that the school supports around 39,000 local jobs, (12,300 directly) driving steady demand for housing, construction and commercial space. This is big! but also its not the areas only contributing employment source. Tippecanoe County has roughly 93,000 jobs total across all sectors. 

Together, these factors make Tippecanoe County, IN a strong market for both stable cash flow and long-term appreciation — exactly what 1031 investors want when upgrading properties.

How do I Use a 1031 Exchange Locally?

Here’s what a local 1031 strategy often looks like:

• Step 1: Sell an existing rental — such as a single-family home or duplex that’s appreciated in value.

• Step 2: Work with a qualified intermediary (QI) to manage the exchange funds (you can’t touch the money yourself).

• Step 3: Identify potential replacement properties — this needs done within 45 days — and close within 180 days.

Many Lafayette investors choose to reinvest in small apartment buildings, small office properties, or mixed-use spaces near Purdue University or smaller subsets of the Lafayette area where business activity and housing demand remain strong. 

Tips and Common Pitfalls

1031 exchanges can be powerful, but they also come with deadlines and details that require precision:

• You can identify up to three properties during the 45-day window. --- best to do before you close your initial sale-- thinking you have "plenty of time" is a tough plan. 

• The replacement property’s value must be equal or greater than the one sold.-- The penalty is a tax payment on the unused funds. 

• All transactions must be like-kind investments — meaning real estate for real estate.-- Not real estate for boats- but it's more detailed than that. 

The Bigger Picture: Long-Term Growth in Tippecanoe County

Lafayette isn’t just a university town anymore — it’s a growing innovation hub. Purdue’s Discovery Park District continues to attract companies in tech, research, and logistics, which fuels both housing demand, construction and commercial activity.

Meanwhile, the county’s rental vacancy rate remains below 5%, compared to a national average of 6.6%, according to NeighborhoodScout’s 2024 market data. For investors, that means low turnover, stable tenants, and consistent rental income even as you scale up into larger assets.

For Lafayette area investors, a 1031 exchange simply offers a way to grow without starting over. You can use the equity you’ve earned in smaller properties to buy into larger, higher-performing buildings — all while deferring taxes and staying local.

With strong fundamentals — from Purdue’s economic engine to rising property values and solid rent demand — Tippecanoe County continues to stand out as one of Indiana’s best places to expand your portfolio strategically and tax-efficiently in 2026. 

- Shane