Upgrade & Defer Capital Gains Taxes with your Tucson Rental Property with a 1031 Exchange

If you’ve been managing multiple single‐family rentals in the Tucson area for years, you may be reaching that moment: the headaches of tenant calls, rising maintenance costs, and vacancies might be starting to outweigh the benefits. It might be time to step back, reassess, and explore smarter investment options.

Why Rental Ownership Becomes More Labor Intensive
The rental market in and around Tucson continues to grow, which is good—but that also means more competition and higher expectations from tenants. According to a Tucson rental market overview, single‐family homes are in particular demand, but property owners still face challenges such as management workload and rising maintenance costs. besttucsonhomesforrent.com

In Arizona more broadly, landlords pay typical property management fees of 8-10% of monthly rent. Steadily As you scale your rental portfolio, these costs and demands can add up quickly—and what once felt passive may no longer be.

What Are Your Bigger Goals?
Owning rentals is one strategy, but ask yourself:

• Are your properties still meeting your financial objectives?
  
  
• Is your monthly cashflow what you expected when you bought them?
  
  
• Are you spending too much time on calls, repairs, and screening rather than growing your portfolio?
  If the answers lean toward “no,” it’s time to consider alternative investment real-estate paths.
  
  

Why a 1031 Exchange Could Be Your Next Move
One of the most powerful tools in real estate investing is the tax‐deferred exchange under IRC Section 1031. The Internal Revenue Service explains that a like-kind exchange can let you defer recognizing gain or loss when you swap an investment property for another business or investment property of “like‐kind.” IRS.GOV
Some key benefits:

• You can defer capital gains taxes when you sell one property and reinvest into another. Fidelity
  
  
• It allows you to reposition your portfolio: perhaps sell that tired rental, upgrade into a property in a different market, or shift into a piece of real estate you’ll enjoy personally later.
  
  
• The strategy supports growth and reinvestment without the immediate tax drag. firstexchange.com
  Of course, it’s not simple or automatic—you’ll need to follow strict IRS rules, use a qualified intermediary, and meet deadlines (e.g., a replacement property must be identified in 45 days). Fidelity
  
  

How This Applies in the Tucson Area
If you’re holding multiple single-family rentals in Tucson, Marana, Oro Valley or the surrounding region and you’re feeling the management grind, consider how you might:

• Sell one or more properties and use 1031 exchange to move into a larger property (or several smaller ones) that require less hands-on oversight.
  
  
• Buy into other states or markets, while still keeping the benefits of the exchange.
  
  
• Acquire property that you or your family may eventually use as a residence or vacation home, but still treat it as an investment today with rental income.
  And don’t ignore cashflow: Tucson’s average rent for long-term rentals is around $1,595/month, about 20% below the national average—meaning you’re in a relatively affordable rental market compared to coastal areas. Zillow
  
  

Free Analysis Offer
If you’re wondering whether your current investment properties are still performing to meet your objectives—or if you’re curious how a 1031 exchange might work for you—let’s talk. I focus on helping real estate investors analyze their portfolios so they can meet financial objectives more efficiently and with less stress.

Conclusion
It’s not just about owning real estate—it’s about owning the right real estate. If the workload is getting heavy and your returns are flattening, repositioning your portfolio could unlock better cashflow, tax advantage, and long-term growth. Let’s make the next move smarter.

Call, text, or email me directly- Tom Krieger 520-907-5305 | tom@thetjkteam.com