Published September 4, 2025

Why Some Indiana Owners Are Choosing to 1031 Now Instead of Waiting

Written by Shane Childers

🏢 Why Some Indiana Owners Are Choosing to 1031 Now Instead of Waiting

If you own investment property in Lafayette or West Lafayette, Indiana, and you’ve been thinking about selling—but keep telling yourself “maybe next year”—you’re not alone.

However, more local owners are moving forward with 1031 exchanges right now—and for good reason. Rising maintenance costs, market uncertainty, and fear of losing today’s equity gains are pushing some to act sooner than planned.

Here’s why it might make sense to consider a 1031 exchange this year instead of waiting—and what a real-life example could look like.

🔁 What Is a 1031 Exchange (Quick Refresher)?

A 1031 exchange allows you to sell an investment property and reinvest the proceeds into another “like-kind” property—without paying capital gains taxes immediately.

This means you can:

Defer taxes
Upgrade into a better asset
Grow your cash flow or improve your location

It’s one of the most powerful tools for building long-term wealth in real estate.

🧠 Why Some Investors Are Choosing to Exchange in 2025

Here’s what’s driving the decision to act now:

1. High Buyer Demand Still Exists

Even with interest rates where they are, there’s still demand for smaller, stabilized multifamily properties in Tippecanoe County—especially in West Lafayette near Purdue. If your property has decent cash flow and location, there’s likely a buyer out there.

2. You Can Trade into Less Headache

Many owners are using the exchange to move:

From older 4-plexes into newer 10–20 unit buildings
From college rentals into more stable workforce housing
From high-turnover properties into passive NNN assets

If your current property is becoming a management burden, a 1031 lets you offload it without losing your equity to taxes.

3. Renovation & Insurance Costs Are Climbing

Some owners would rather exit a building now than deal with:

Roof replacements
Plumbing or HVAC upgrades
Rising property insurance costs

If you’re going to sell eventually, doing it before these costs escalate further may leave more cash in your pocket.

🔍 Real-Life Example: Exchange Now vs. Wait a Year

Case Study: Lafayette 6-Unit Seller

	Exchange Now (2025)	Wait 1 Year (2026)
Sale Price	$660,000	$640,000 (market softens slightly)
Capital Gains Taxes Due	$0 (Deferred via 1031)	$0 (Still deferred)
Replacement Property	12-unit newer build @ $1.25M	10-unit 1980s build @ $1.1M (less inventory)
Cash Flow After Exchange	+$2,100/month (net increase)	+$1,400/month (net increase)
Timeline Risk	Low – buyers active now	Higher – unknown rates/demand
Outcome	Traded up + increased income	Traded sideways, less upside

This is based on actual transaction data and investor trends in the Lafayette-West Lafayette market.

🏁 Bottom Line

Waiting might work in your favor—but it also might not. Rates could change, cap rates could shift, buyer demand could slow, or your property's condition could worsen.

If you're sitting on equity and feeling the itch to move up, reduce hassle, or reposition your portfolio, a 1031 exchange this year could be a smart move.