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Are There Any Risks Associated With Investing In A DST?

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Yes, there are risks associated with investing in a DST (Delaware Statutory Trust). Some of the potential risks include:

  1. Real Estate Market Risk: The value of the real estate underlying the DST investment can be affected by changes in the real estate market, such as fluctuations in property prices, interest rates, and other economic factors.
  2. Lack of Control: As an investor in a DST, you typically have limited control over the management of the property. The property is managed by a trustee or sponsor, and you have no say in how it is managed or operated.
  3. Illiquidity: DSTs are not publicly traded, so they are not as liquid as other types of investments. Once you invest in a DST, it can be difficult to sell your shares, and you may have to wait until the trust is dissolved or sold to get your money back.
  4. Fees and Expenses: There may be significant fees and expenses associated with investing in a DST, including upfront fees, ongoing management fees, and other costs. These fees can reduce your overall returns and make it more difficult to achieve your investment goals.
  5. Tax Risks: DSTs can have complex tax implications, and investors should be aware of the potential tax consequences before investing. For example, the income generated by the DST may be subject to unrelated business income tax (UBIT) or other taxes.

It is important to carefully consider these risks before investing in a DST and to consult with a financial professional to determine if it is a suitable investment for your individual needs and goals.

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