The primary advantage of a 1031 exchange is the deferral of capital gains tax, effectively snowballing the investor's purchasing power. However, this strategy comes with challenges. The strict timing rules can pose difficulties. If a replacement property isn't identified within the 45-day window or purchased within 180 days, the tax benefits are forfeited. Moreover, while the deferred tax is beneficial, it doesn't eliminate the tax. Future tax liability may arise when the new property is sold, unless another 1031 exchange is undertaken.