What to Do With RSUs: Real Estate for Tech Workers

Vest day

What should you do with RSUs when they vest?

When RSUs vest, treat the shares as pay you have already been taxed on. Then decide whether you would buy that much of your employer's stock with cash today. RSUs are generally taxed as ordinary income when they vest, on the shares' value that day. The IRS rule is that property received for services counts as income once it is substantially vested (Publication 525).

After that, keeping the shares is an investment choice like any other, and any later rise or fall is a capital gain or loss.

That framing matters for tech workers because RSUs keep arriving. Each quarterly or monthly vest adds to one company's weight in your net worth. The same company also pays your salary and holds your unvested grants.

Should you sell your RSUs or hold them?

Selling RSUs or holding them is a bet either way. Holding is a bet on one company, while selling is a bet that a spread of other assets will do as well with less risk. No rule says which is right, and selling may be limited by your employer's trading windows.

Three questions are useful. How much of your wealth already depends on the company? When will you need the money? What would the shares be replaced with?

Concentration math

How much of your net worth should be in company stock?

The safe share of net worth for one company's stock is not set by any rule, but the record on single stocks is a warning.

J.P. Morgan's 2024 study looked at catastrophic declines: a fall of 70% or more that never recovers. At their peaks, 54% of those companies were profitable and about 80% had a "strong buy" consensus from Wall Street analysts. Information technology had the second-most decliners, after healthcare and biotech.

Broad market data points the same way. A study by Hendrik Bessembinder in the Journal of Financial Economics looked at U.S. common stocks since 1926. About 4 in 7 returned less over their lifetimes than one-month Treasury bills. The best-performing 4% of companies accounted for the market's entire net wealth gain.

Taxes and timing

Can you diversify concentrated stock without paying taxes?

Diversifying a concentrated stock position usually means paying some tax, because selling shares that have risen realizes the gain. RSUs sold soon after they vest are the easy case. The vest-date value was already taxed as pay, so a quick sale adds little or no gain. Shares held for years, or bought through an employee stock purchase plan (ESPP) or by exercising options, are where the tax bill builds.

Real estate does not offer a way around that. A 1031 exchange applies only to real property, so stock cannot be swapped into a building or a syndication with the tax deferred. Opportunity zone funds can defer capital gains under strict rules, but not the ordinary income you owe when RSUs vest. The opportunity zone guide covers who that fits.

Options carry their own timing rules. Exercising incentive stock options (ISOs) generally adds nothing to regular income but can trigger the alternative minimum tax (AMT) in the year of exercise. For 2026 the AMT exemption is $90,100 single and $140,200 joint, and it phases out from $500,000 and $1,000,000 at 50 cents per dollar.

Favorable ISO treatment needs the shares held more than 2 years from grant and 1 year from exercise. An ESPP caps purchases at $25,000 of stock a year, at no less than 85% of market value.

Does private real estate lower the tax on RSU income?

Private real estate rarely lowers the tax on RSU income. RSU income is wages, and losses from a passive real estate investment offset only passive income under IRC 469. So a K-1 loss from a syndication generally cannot reduce tax on your vest.

Real estate professional status, the main exception, needs more than 750 hours a year and more than half your working time in real estate. A full-time engineer cannot meet that. The guide on passive losses and W-2 income explains what happens to the unused losses.

Trading windows

When can you sell company stock to fund an investment?

You can sell company stock only when your employer's rules and securities law allow it, so plan sales months before a private offering's funding deadline. Three timing limits come up most:

• 10b5-1 plans. Under SEC amendments from December 2022, directors and officers wait at least 90 days after adopting a plan before the first trade (up to 120 days). Other employees wait 30 days, according to a Paul Weiss summary.
• IPO lockups. Most lockups bar insiders from selling for 180 days after an IPO, though terms vary by prospectus.
• Tender offers. At private companies, a tender may be the only way to sell before an IPO.

Never time a sale around company news the public does not have yet, whatever the funding deadline.

Outside the stock market

Where do software engineers invest outside of stocks?

Software engineers who invest outside of stocks commonly look at bonds, cash, real estate and private funds. Real estate is often discussed as a diversifier, but it is not independent of stocks.

A Nareit-sponsored study of 200+ pension plans from 1998 to 2022 looked at private real estate's lag-adjusted returns. They had a correlation of 0.55 with U.S. large caps and 0.61 with private equity, the closest proxy for venture-backed companies. Their volatility was 17.7%. The guide to real estate vs stocks covers returns and risk.

Two checks matter for tech workers. Ask whether the property's tenants depend on tech, such as offices leased to startups. Also ask whether it sits in the same metro as your employer and your home, where one downturn hits all three.

Minimums shape how vests turn into investments. Relli analyzed 4,172 real estate Form D filings from October 2025 to September 2026. Of those, 50.2% listed a minimum of $25,000 or less, including none, and 24.8% listed $100,000 or more. So one large vest can fund a single offering, while smaller vests take several quarters to add up.

The guide to how much you need to invest covers sizing a first check.

Do vested RSUs count toward accredited investor status?

Vested RSUs count toward accredited investor status because shares you own are assets in the $1 million net worth test. That test leaves out only your home.

RSU income also counts toward the income test. That test needs more than $200,000 ($300,000 joint) in each of the last two years, with a reasonable expectation of the same this year. Unvested grants are not yet your shares. The page on whether vested RSUs count toward accredited net worth has the full tests; no job title qualifies you by itself.

Visa holders

Can H-1B visa holders invest in real estate syndications?

An H-1B visa holder can meet the accredited investor tests, because Rule 501 says nothing about citizenship. It applies to "any natural person" who meets the income, net worth or license test. Whether a passive investment fits the terms of your visa is an immigration question, not a securities one. Check with immigration counsel before you invest, and ask the sponsor what it needs from non-citizen investors.

Before you commit

What should you ask a sponsor about funding dates and vesting?

A tech worker's questions for a sponsor should line up the deal's funding date with vest dates and trading windows:

1. What is the funding deadline? I may need an open trading window or a 10b5-1 plan to raise cash.
2. Can I fund in stages as RSUs vest, or is it one payment?
3. Are any tenants, lenders or co-investors tech companies, or dependent on them?
4. Is the property in the same metro as my employer and my home?
5. When do K-1s arrive, and how will they fit a year when I also report an ISO exercise or an IPO sale?