Financial case analysis: A middle-aged American couple owns multiple properties but is tired of being landlords… How should a new financial plan be designed to ensure that they have time to do what they like and can retire with peace of mind?

If they document the cost of rehabbing the home, the couple could use that to offset capital gains taxes. They could also use a 1031 exchange, which lets them defer capital gains taxes by buying a property similar to the one they are selling.

Another way planners can defer taxes, planners say, is to invest proceeds only in qualified opportunity zones or economically distressed communities. These types of investments qualify for favorable tax treatment, though the money invested is typically locked up for 10 years.

In addition, LaTourette said the couple’s money could do better than the 2% of the asset value it generated from last year’s rental income. She thinks they need to diversify beyond local residential real estate, perhaps to include bonds and mutual funds. Such investments may give them more flexibility than real estate when it comes to managing retirement taxes as they age.

For Nagler and Lynds, who care deeply about their communities, she recommends that they explore ESG investing so their money can support companies that prioritize environmental, social and governance goals.

LaTourette said the couple’s financial situation and the need to be physically present when problems arose at their rental property limited their ability to seek out new adventures, such as travel. “It was time to take responsibility for our own dreams and goals,” she said.