# DST Income Calculator: How Delaware Statutory Trust Distributions Work

> Estimate projected DST income by month and year. Learn how sponsors set distribution rates, what can change them, and how leverage and hold periods matter.

Source: https://baker1031.com/tools/dst-income-calculator


By Jerry Baker, Founder, Baker 1031 Investments. Published October 24, 2026; updated October 24, 2026. Interactive calculator: https://baker1031.com/tools/dst-income-calculator

A DST distribution is the cash a Delaware statutory trust pays its investors from the property's rent, usually each month, after expenses, debt payments, and reserves. In my offering records as of October 2026, the median projected year-1 distribution rate was 4.7%, which on $500,000 would be about $1,958 a month. Projections are not guaranteed.

## How the calculator works

1. Year-1 projected distributions = investment amount × projected year-1 distribution rate.
2. Monthly = year-1 annual ÷ 12. Most DSTs pay monthly.
3. Each later year's rate = year-1 rate × (1 + annual change)^(year − 1). The default rate, 4.7%, is the median projected year-1 rate across my DST offering records as of October 2026.
4. Cumulative projected distributions = the sum of every year in the hold.
5. Projections are sponsors' estimates. Distributions are not guaranteed, may change or stop, and may include a return of capital.

Results are estimates for education, not tax or legal advice.

## Key takeaways

- DST income is quoted as a **projected distribution rate**: the yearly cash the sponsor expects to pay, divided by the equity you invest. It's an estimate, not a promise.
- In my offering records as of October 2026, the median projected year-1 rate was **4.7%**, with a range of **4.0% to 9.0%** across the 71 offerings that published one.
- **47% of offerings were all-cash**, with no debt. Among leveraged offerings, the median loan-to-value was about **49%**. Debt can raise or lower the cash left for investors.
- Distributions can change or stop. Lease problems, vacancies, rising costs, debt terms, and reserve needs can all reduce them. Part of a distribution may be a return of your own capital.
- **A 10-year hold was the most common** projection, and the **median minimum investment was $100,000**. Your total return depends heavily on how and when the property sells.
- The calculator above shows monthly, yearly, and total projected income. It's a planning tool. Always read the offering's private placement memorandum (PPM).

## What is a DST distribution?

Let me start with the basics.

A **Delaware statutory trust**, or DST, is a legal entity that owns real estate. Many investors each buy a slice, called a **beneficial interest**. The trust owns the property. A company called the **sponsor** finds the property, buys it, arranges any loan, and manages the trust. If you want the full picture, start with my guide to [what a Delaware statutory trust is](/writing/what-is-a-delaware-statutory-trust-dst).

DST interests can qualify as replacement property in a 1031 exchange. The IRS addressed this in Revenue Ruling 2004-86. It says "A taxpayer may exchange real property for an interest in the Delaware statutory trust" described in the ruling, as long as the other Section 1031 rules are met. You can read it in the [IRS Internal Revenue Bulletin 2004-33](https://www.irs.gov/irb/2004-33_IRB).

A **distribution** is the cash the DST pays out to investors. It usually comes from the property's rent. Before anything reaches you, the trust pays operating costs, any loan payments, and money set aside for reserves. What's left can be distributed. Each investor receives a share based on how much of the trust they own.

Most DSTs pay distributions monthly. Some pay quarterly. The PPM tells you which.

## What is a projected distribution rate?

The **projected distribution rate** is the sponsor's estimate of how much cash the DST will pay you in a year, shown as a percentage of the money you invest.

**Projected distribution rate = projected yearly distributions ÷ your invested equity**

Your **invested equity** is the cash you put in. It does not include the DST's loan.

Here's a simple example. Say you invest $500,000 in a DST with a projected year-1 rate of 4.7%.

- $500,000 × 4.7% = $23,500 a year
- $23,500 ÷ 12 = about $1,958 a month

That's the number the calculator above shows you.

Notice the word "projected." The sponsor is making an estimate based on leases, costs, and its business plan. Real results can be higher, lower, or zero. FINRA has made this point about real estate programs for years. In its notice on tenants-in-common interests, an older cousin of the DST, FINRA told brokers they "should determine whether any projected yields can reasonably be supported." You can read [FINRA (NASD) Notice to Members 05-18](https://www.finra.org/rules-guidance/notices/05-18).

### Distribution rate is not the same as total return

A distribution rate only measures cash paid while you hold. It doesn't tell you what happens when the property sells. A DST could pay steady distributions and still lose money if the property sells for less than it cost. Another could pay a lower rate but sell for a gain. Your **total return** is the distributions plus or minus what you get back at the end.

### Distribution rate is not the same as a cap rate

A **cap rate**, or capitalization rate, is a property's net operating income divided by its price. **Net operating income**, or NOI, is rent minus operating expenses, before any loan payments. The cap rate describes the property. The distribution rate describes the cash paid to you after debt, reserves, and trust costs. They can be close or far apart, depending on the loan and the fees.

## How do sponsors set DST distribution rates?

When a sponsor puts together a DST, it builds a financial model. That model estimates the property's income and costs for each year of the hold. The projected distribution rate comes out of that model.

Here's roughly how the math flows:

1. **Start with rent.** The sponsor adds up current leases and what it expects to collect.
2. **Subtract operating costs.** That includes property management, taxes, insurance, repairs, and utilities the owner pays.
3. **The result is NOI.** That's the property's income before debt.
4. **Subtract debt payments,** if the DST has a loan.
5. **Subtract trust-level costs and reserves.** The trust has its own costs, like asset management fees. It also sets money aside for future repairs or vacancies.
6. **What's left is cash available for distribution.** The sponsor divides that by the total investor equity to get the projected rate.

The sponsor also decides how much of the cash to pay out. Some pay out nearly all of it. Others hold back more for reserves. A sponsor might also project that distributions will rise over time if rents are expected to grow.

### What affects the starting rate?

Several things push the rate up or down:

- **The price paid for the property.** Paying more for the same income lowers the rate.
- **Property type and location.** Different types of real estate trade at different cap rates.
- **The loan.** Its size, interest rate, and terms matter a lot. I'll explain below.
- **Fees and load.** DSTs include upfront costs, like selling commissions and offering costs, and ongoing fees. Higher costs mean less of your money buys real estate, and less income per dollar invested.
- **Reserves.** Bigger reserves mean more safety but less cash today.

A higher projected rate isn't automatically better. It can reflect more risk, more debt, an older property, a shorter lease, or a different kind of asset. I look at why the rate is what it is, not just the number.

## How often are DST distributions paid?

Most DSTs I review pay monthly. That's one reason investors who are tired of managing rentals find them appealing. The money shows up on a schedule without you collecting rent.

A few things to know about timing:

- **The first payment may take a little time.** Depending on when you close and how the sponsor runs its schedule, your first distribution may be partial or arrive a month or two after you invest.
- **Monthly amounts can vary.** Even with a steady projection, actual monthly payments can move up or down.
- **You get statements.** Sponsors send regular reports and year-end tax documents. Your CPA will use these when you file.

The calculator divides the yearly amount by 12 to show a monthly figure. Real payments may not be perfectly even.

## What can make DST distributions change?

This is the most important section in this guide. Distributions are not guaranteed. They can go down, and they can stop completely. Here are the main reasons.

### Lease changes

Many DSTs depend on a few big leases, or even one. If a major tenant leaves, goes bankrupt, or asks for lower rent, income can drop fast. In a single-tenant net lease DST, losing that one tenant can cut income to near zero.

DSTs have a special limit here. Under Revenue Ruling 2004-86, the trustee in the example "may not renegotiate the terms of the debt" and generally can't sign new leases with other tenants except in narrow cases. Real DSTs have more detailed rules in their documents, but the point stands: the trust has limited power to fix problems. That's part of what keeps it eligible for 1031 treatment.

### Vacancies

In multifamily, self-storage, or multi-tenant buildings, income depends on how many units are rented and at what price. A rise in vacancies or a drop in market rents lowers income.

### Rising costs

Property taxes, insurance, labor, and repair costs can rise faster than rent. When costs go up and rent doesn't, the cash left for investors shrinks.

### Debt

If a DST has a loan, the loan gets paid before investors do. If the loan has a floating rate, or if it needs to be refinanced, higher interest costs can cut distributions. Missing loan payments can lead to foreclosure, and investors can lose their whole investment.

### Reserves

If a big repair comes up, the sponsor may use reserves or reduce distributions to rebuild them. Some sponsors cut distributions early to protect the property long term.

### Sponsor decisions

The sponsor decides how much to distribute. If it sees trouble ahead, it may lower or pause payments. That can be the right call for the property, but it hurts your income.

### A simple example of a vacancy hit

Say a DST's property makes $50,000 a year of cash available for distribution on $1,000,000 of investor equity. That's a 5% rate. Now say one tenant paying a fifth of that cash leaves.

- Cash available drops by about $10,000, to $40,000.
- The rate drops from 5% to 4%.
- If you invested $100,000, your yearly income would go from $5,000 to $4,000.

Reserves might cover the gap for a while. But if the space stays empty, the lower number could last.

## What is return of capital in a DST?

**Return of capital** means part of a distribution is your own money coming back to you, rather than profit from the property.

This matters because a distribution that looks like income isn't always income. If a property isn't earning enough to cover the projected rate, the payout might be funded partly from reserves or other sources. That can make a program look healthier than it is.

FINRA warned about this in a 2011 investor alert on non-traded REITs, another type of illiquid real estate investment. The alert said "Distributions are not guaranteed and may exceed operating cash flow." It also said "Distributions can also be suspended for a period of time or halted altogether," and that payouts may "include a return of investor principal." You can read [FINRA's news release on its non-traded REIT investor alert](https://finra.org/media-center/news-releases/2011/finra-issues-investor-alert-public-non-traded-reits). REITs are not DSTs, but the warning about where distributions come from applies to many illiquid real estate programs.

How can you tell? Read the PPM and the sponsor's reports. Ask what portion of distributions is covered by the property's actual cash flow. Ask whether any of the money comes from reserves set up at the start. I ask these questions as part of [my due diligence process](/writing/inside-my-due-diligence-process).

### Return of capital vs. tax treatment

There's a second, separate idea that sounds similar. Because you own a share of the real estate, you generally get your share of the depreciation deductions. Depreciation may offset part of your distributions for tax purposes. That's a tax question, not a cash-flow question. How it works for you depends on your situation, so ask your CPA.

## How does leverage affect DST income?

**Leverage** means using borrowed money to buy property. In a DST, the loan is taken out by the trust, not by you personally. The common measure is **loan-to-value**, or LTV: the loan amount divided by the property's value.

Debt can raise income or lower it. It depends on how the loan's cost compares to what the property earns.

### A side-by-side example

Say you and other investors put in $1,000,000 of equity. Assume, just for this example, that the property earns NOI equal to 5% of its value, and ignore fees and reserves.

**DST A: all-cash.**

- Property value: $1,000,000
- NOI: $50,000
- Loan payments: $0
- Cash for investors: $50,000
- Distribution rate: 5%

**DST B: 50% LTV, interest-only loan at 4%.**

- Property value: $2,000,000 ($1,000,000 equity + $1,000,000 loan)
- NOI: $100,000
- Interest: $40,000
- Cash for investors: $60,000
- Distribution rate: 6%

**DST C: 50% LTV, interest-only loan at 6%.**

- Property value: $2,000,000
- NOI: $100,000
- Interest: $60,000
- Cash for investors: $40,000
- Distribution rate: 4%

When the loan costs less than the property earns, debt can boost income. When it costs more, debt drags income down. Debt also adds risk. If the property's value falls, investors' equity takes the hit first. And if income falls, the loan still has to be paid.

### Why some investors want debt

Debt isn't all bad in a 1031 exchange. If you paid off a mortgage when you sold, you generally need to replace that debt, or add cash, to avoid taxable boot. A leveraged DST can sometimes help. My [1031 boot calculator](/tools/1031-boot-calculator) shows how that works.

### All-cash vs. leveraged DSTs

| Feature | All-cash DST | Leveraged DST |
|---|---|---|
| Loan payments before investors | None | Yes |
| Risk of foreclosure | No loan to default on | Possible if loan isn't paid |
| Effect on income | Depends on the property only | Can raise or lower it |
| Helps replace paid-off debt in an exchange | No | Can |
| Sensitivity to interest rates | Lower | Higher, especially with floating rates or refinancing |
| Share of offerings in my records | 47% | 53% |

## How long do you hold a DST, and what happens at the end?

A DST is not a savings account. You generally can't take your money out when you want. You're in until the sponsor sells the property, which can be many years.

### Typical hold periods

The sponsor projects a hold period when it launches the offering. In my offering records, 10 years is the most common projection. That's an estimate. The actual hold can be shorter or longer depending on the market.

During the hold, DST interests are illiquid. There's usually no market to sell them. FINRA's Notice 05-18 described tenants-in-common interests, an earlier structure, as "illiquid securities" and said "The subsequent sale of TIC interests may only be possible at a significant discount." DSTs are generally illiquid in a similar way.

### The sale at the end

When the property sells, the trust pays off any loan and costs. The rest goes to investors. That last payment can be more or less than what you put in.

At that point, you have choices. You can take the cash and pay the tax. Or you can do another 1031 exchange into new real estate, including another DST. My [1031 tax deferral calculator](/tools/1031-tax-deferral-calculator) shows what's at stake on the tax side. And the [1031 exchange deadline calculator](/tools/1031-exchange-deadline-calculator) shows your 45-day and 180-day dates once the sale happens.

### The 721 exit

Some DSTs can end differently. Instead of selling for cash, the property may be contributed to a REIT's operating partnership in exchange for units. That's called a 721 exchange. It can change your income, your liquidity, and your future tax options. My guide to [721 exchanges and UPREIT DSTs](/writing/what-is-a-721-exchange-upreit-dst) explains it.

## DST income vs. managing a rental property

Many people look at DSTs because they're tired of being landlords. Here's how the two compare.

| Question | Owning a rental yourself | Owning a DST interest |
|---|---|---|
| Who handles tenants and repairs? | You or a manager you hire | The sponsor and its managers |
| How income is paid | You collect rent and pay bills | Distributions, usually monthly |
| Control over decisions | Full | Very little |
| Can you refinance or sell when you want? | Yes | Generally no |
| Number of properties | Often one | One or a few, often larger, institutional properties |
| Use of debt | Your choice | Set by the sponsor |
| Personal liability on the loan | Often yes | Generally no; the trust holds the loan |
| Fees | Management, if you hire it | Upfront and ongoing sponsor fees |
| Typical minimum | The full down payment | Median $100,000 in my records |
| Liquidity | Can sell, though it takes time | Illiquid until the sponsor sells |

### A simple rental comparison

Say you own a rental worth $1,000,000 with no mortgage. It brings in $70,000 a year of rent. After taxes, insurance, repairs, and other costs of $25,000, you keep $45,000. That's 4.5% of the property's value. But you also spend your time on tenants, repairs, and phone calls. And if you hired a full-service manager, your take would be lower.

Now say you exchanged that $1,000,000 into a DST with a projected rate of 4.7%. That projection would be $47,000 a year, or about $3,917 a month, with no landlord work on your part. But the income isn't guaranteed, you give up control, and you can't sell when you want.

Those two numbers are close in this example. They won't always be. The choice often comes down to what you value more: control, or freedom from management.

## How to estimate your DST income, step by step

Here's how I suggest using the calculator above.

### Step 1: Decide how much you're investing

For a 1031 exchange, this is usually your net exchange proceeds, or the part you plan to put into DSTs. Many investors split money across two or more DSTs to spread risk.

### Step 2: Enter a projected year-1 rate

The calculator starts at 4.7%, the median in my offering records. If you're looking at a specific offering, use the rate in its PPM. Try a few rates to see the range.

### Step 3: Choose an annual change, if you want one

Leave it at 0% for a flat projection. Use a small positive number if the offering projects rising distributions. Try a negative number to see what happens if income falls. Testing a downside case is smart.

### Step 4: Set the hold period

The default is 10 years, the most common projection in my records. Match it to the offering's projected hold.

### Step 5: Read the results

You'll see year-1 annual income, the monthly equivalent, and the total over the hold. Remember that the total doesn't include what you get back when the property sells.

### Step 6: Stress-test it

Ask yourself: could I handle it if distributions dropped by a quarter, or stopped for a year? If not, a DST may not fit, or you may want to keep more money elsewhere.

### Step 7: Read the PPM and talk to your advisors

The PPM explains the risks, fees, loan terms, and how distributions are funded. Your CPA can explain the tax side. My guide on [how to choose a DST](/writing/how-to-choose-a-delaware-statutory-trust-dst) covers the questions I ask about each offering.

## How to use the calculator

The calculator above turns four inputs into a simple projection of your DST income. Here's what each box means, where to find the number, and how to read what comes out.

### What each input means and where to find it

- **Investment amount.** This is the cash you plan to put into the DST. In a 1031 exchange, it's often your net exchange proceeds, or the part of them you plan to place in this offering. Your qualified intermediary can tell you how much is in your exchange account.
- **Projected year-1 distribution rate.** This is the sponsor's projected rate for the first year. You'll find it in the offering's PPM and its summary materials. The calculator starts at 4.7%, the median in my offering records as of October 2026. If you don't have an offering in mind yet, try the low end (4.0%) and the median to see a range.
- **Annual change (optional).** This is how much you expect distributions to rise or fall each year, as a percentage. Some PPMs project distributions that step up over time. Many don't. Leave it at 0% for a flat projection, or enter a negative number to test a downside case.
- **Hold years.** This is how long you expect to own the DST interest. The PPM gives a projected hold. The calculator starts at 10 years, the most common projection in my records.

### How to read the results

The calculator shows three main numbers.

- **Year-1 annual income** is your investment times the projected rate. It's the cash the sponsor projects you'd receive in the first full year.
- **Monthly income** is the year-1 amount spread evenly over 12 months. Real payments may not be perfectly even, and your first one may be partial.
- **Cumulative income** is the projected total of all distributions over your hold. If you entered an annual change, each year grows or shrinks from the year before.

The cumulative number is not your total return. It leaves out what you get back when the property sells, which could be more or less than you put in. It also shows income before taxes.

### A worked example in plain words

Say you're putting $500,000 into a DST. You use the 4.7% default rate, leave the annual change at 0%, and keep the 10-year hold.

In year one, 4.7% of $500,000 is $23,500. Spread over 12 months, that's about $1,958 a month. Since you entered no change, every year stays at $23,500. Over 10 years, the calculator adds up to **$235,000** of projected distributions.

Now say the offering projects small yearly increases, and you enter 1%. Year one is still $23,500. Year two is 1% higher, or $23,735. Year three is 1% higher than that, about $23,972. Each year builds on the one before. Over 10 years, the total comes to about **$245,862**.

Finally, try a downside case. Enter −2% for the annual change. Now each year is a little lower than the last, and the 10-year total drops to about **$214,939**. That's about $31,000 less than the 1% case. Small changes, repeated over a decade, add up.

### Try a few scenarios

- **Lower the rate** to 4.0%, the bottom of the range in my records, to see a more cautious picture.
- **Raise the rate** and ask yourself what extra risk might come with it.
- **Shorten the hold** to 7 years to see how a shorter projected hold changes the total.
- **Enter a negative change** to see whether you'd be comfortable if income slipped each year.

### What the calculator leaves out

- **The sale.** It doesn't estimate what you'll get back when the property sells.
- **Taxes.** It shows income before tax. Your CPA can explain how depreciation and other items may affect what you owe.
- **Timing.** It assumes even payments starting right away. Real first payments may be partial or delayed.
- **Real-world changes.** It assumes a steady rate of change. Real distributions can jump, drop, or stop.

Projections are sponsors' estimates. They are not guaranteed. They may change or stop. They may include return of capital.

## Mistakes to avoid

### Mistake 1: Treating the projected rate as a promise

A projected rate is the sponsor's estimate. Distributions are not guaranteed. Plan your budget around the chance that they could drop or stop.

### Mistake 2: Chasing the highest rate

A high rate can come from more debt, a riskier tenant, a shorter lease, or higher risk overall. In my records, the range was 4.0% to 9.0%. The top of the range isn't automatically the better deal.

### Mistake 3: Ignoring where the money comes from

Ask whether distributions are covered by the property's actual cash flow. If they're funded by reserves or capital, the rate may not last.

### Mistake 4: Forgetting about the loan

Check the loan's size, interest rate, whether it's fixed or floating, and when it comes due. A loan that has to be refinanced in a bad market can hurt income or force a sale.

### Mistake 5: Overlooking fees

Upfront and ongoing fees reduce the money working for you. Compare fees across offerings, not just rates.

### Mistake 6: Needing the money back early

DSTs are illiquid. If you might need the cash in a few years, think carefully. A 10-year projected hold means you should be prepared to wait at least that long.

### Mistake 7: Putting everything in one DST

One property, one tenant, or one sponsor means more concentration risk. Many investors spread money across several offerings, property types, and regions.

### Mistake 8: Only looking at income

Total return includes the sale. A property that pays well but sells at a loss can leave you worse off. Look at the sponsor's history of full-cycle results.

## What my data shows

I keep [detailed records on every DST offering I review](/data/dst-offerings). As of October 2026, my offering records cover 76 DST offerings from 38 sponsors. Here's what they say about income and the features that drive it.

### Projected distribution rates

**The median projected year-1 distribution rate was 4.7%.** That's across the 71 offerings that published a projected rate. **The range was 4.0% to 9.0%.**

| What I measured | Result |
|---|---|
| Offerings in my records | 76 from 38 sponsors |
| Offerings that published a projected year-1 rate | 71 |
| Median projected year-1 rate | 4.7% |
| Range of projected year-1 rates | 4.0% to 9.0% |
| All-cash offerings (no debt) | 36 of 76 (47%) |
| Offerings with LTV above 50% | 16 of 76 (21%) |
| Median LTV among leveraged offerings | About 49% |
| Most common projected hold | 10 years (31 offerings) |
| Median minimum investment | $100,000 |
| Offerings starting at $25,000 | 21 (28%) |

What does the 4.7% median mean in dollars? On the median minimum of $100,000, it would be about $4,700 a year, or about $392 a month. On $500,000, it would be $23,500 a year. Again, these are projections, not promises.

Most offerings cluster near the median. The higher rates often come from different kinds of assets or structures, such as royalty programs or more heavily leveraged properties. If you want to understand royalty programs, my guide to [oil and gas royalties](/writing/what-are-oil-and-gas-royalties) explains them.

### Leverage

**36 of 76 offerings (47%) were all-cash.** They had no debt at all. Of the rest, **16 (21% of all offerings) had LTV above 50%.** **The median LTV among leveraged offerings was about 49%.**

So the market is split almost in half. That gives investors a real choice. If you want less risk from debt, all-cash options are common. If you need to replace debt in your exchange, leveraged options are common too.

### Hold periods

**The most common projected hold was 10 years, in 31 offerings.** Others ranged from 5 to 10 years, 7 years, and a few 2-year programs. If you plug 10 years into the calculator, you're matching the most common projection in my records.

### Minimums

**The median minimum investment was $100,000.** Minimums ranged from $25,000 to $500,000. **21 offerings (28%) started at $25,000.** Lower minimums make it easier to split money across several DSTs. Most DSTs are offered only to **accredited investors**. The SEC says an individual can qualify with "Net worth over $1 million, excluding primary residence (individually or with spouse or partner)" or "Income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years." See the [SEC's accredited investor page](https://www.sec.gov/resources-small-businesses/capital-raising-building-blocks/accredited-investors).

### Other context

Multifamily led with 31 offerings (41%), then industrial with 18 (24%) and net lease with 15 (20%, including energy royalty programs). There were also 5 self-storage, 4 retail, and 3 medical office offerings. The median offering size was about $65 million of total capitalization. Properties spanned 33 states, led by Florida (14), Texas (13), North Carolina (8), and Georgia (7).

I also track more than 1,100 full-cycle 1031 DST investments for performance. Full cycle means the property was bought, held, and sold or otherwise exited. That history helps me ask sponsors how their past projections compared with what investors actually received.

## How I help investors compare DST income

I'm Jerry Baker, [founder of Baker 1031 Investments](/about), with offices in San Francisco and Los Angeles. I studied applied mathematics and applied statistics at Babson College. Before starting my firm, I worked in acquisitions, management, and development at ValueRock Realty Partners, Faris Lee Investments, Westport Capital Partners, and Arbor Bay Capital Partners. I've been involved in more than $10 billion of real estate investment activity.

I offer DSTs from more than 20 institutional sponsors. When we look at offerings together, I explain why I'm considering each one, what I like, and where I have reservations. For income, that means looking past the headline rate to the leases, the loan, the reserves, and the sponsor's track record. You can also see [the offerings currently available](/invest) once you're approved to view them.

Securities are offered through Aurora Securities, Inc., member FINRA/SIPC. Baker 1031 Investments is independent of Aurora Securities.

## Frequently asked questions

### How much income does a DST pay?

It depends on the offering and how much you invest. In my offering records as of October 2026, the median projected year-1 distribution rate was 4.7%, with a range of 4.0% to 9.0%. On $500,000, a 4.7% projection would be $23,500 a year, but distributions are not guaranteed.

### Are DST distributions paid monthly?

Most DSTs pay monthly, and some pay quarterly. The PPM tells you the schedule. Your first payment may be partial or arrive a little later, depending on when you invest.

### Are DST distributions guaranteed?

No. Distributions are the sponsor's projection and can go down or stop entirely. Lease problems, vacancies, costs, and debt can all reduce them, and you can lose some or all of your investment.

### What is a good distribution rate for a DST?

There's no single good number. A higher rate can mean more risk, more debt, or a different type of asset. I look at why a rate is what it is, including the leases, loan, fees, and reserves.

### Can DST distributions include return of capital?

Yes, they can. If a property's cash flow doesn't cover the projected payout, part of a distribution may come from reserves or invested capital. Ask the sponsor how much of the distribution the property's actual cash flow covers.

### How does debt affect DST income?

Debt can raise distributions if the loan costs less than the property earns, and lower them if it costs more. It also adds risk, because the loan is paid before investors. In my records, 47% of offerings were all-cash and the median LTV among leveraged ones was about 49%.

### How long do I have to hold a DST?

Until the sponsor sells the property, which is usually years. In my records, 10 years was the most common projected hold. DST interests are illiquid, so you generally can't cash out early.

### What happens when a DST sells?

The trust pays off any loan and costs and sends the rest to investors. You can take the cash and pay any tax due, or do another 1031 exchange into new real estate. Some DSTs instead offer or require a 721 exchange into a REIT.

### Is DST income taxed?

Generally, yes, but your share of the property's depreciation may offset part of it. How it works depends on your situation. Ask your CPA.

### What is the minimum investment for a DST?

In my offering records as of October 2026, the median minimum was $100,000. Minimums ranged from $25,000 to $500,000, and 28% of offerings started at $25,000. Most DSTs are open only to accredited investors.

### Is DST income better than owning a rental?

Not better or worse, just different. A DST removes landlord work but gives up control and liquidity. A rental gives you control but takes your time. The right choice depends on your goals.

## Sources

- [IRS Internal Revenue Bulletin 2004-33, including Rev. Rul. 2004-86](https://www.irs.gov/irb/2004-33_IRB)
- [26 U.S.C. §1031, Exchange of real property held for productive use or investment (Cornell LII)](https://www.law.cornell.edu/uscode/text/26/1031)
- [FINRA (NASD): Notice to Members 05-18](https://www.finra.org/rules-guidance/notices/05-18)
- [FINRA: FINRA issues investor alert on public non-traded REITs (2011)](https://finra.org/media-center/news-releases/2011/finra-issues-investor-alert-public-non-traded-reits)
- [SEC: Accredited investors](https://www.sec.gov/resources-small-businesses/capital-raising-building-blocks/accredited-investors)

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Securities are offered through Aurora Securities, Inc., member FINRA/SIPC. Baker 1031 Investments, LLC is independent of Aurora Securities, Inc. and is not a registered broker-dealer or investment adviser. This content is general education, not investment, tax, or legal advice, and is not an offer to buy or sell securities. Offers are made only through the offering documents to eligible investors, generally accredited investors. DST interests are illiquid, distributions are not guaranteed, and you can lose your entire investment.

Contact: Jerry Baker, Baker 1031 Investments · hello@baker1031.com · (415) 965-0552 · https://baker1031.com/contact