In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Alexandria
After a period of service as a rental, rental investors can choose to sell their rental unit. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many rentals at best market value for our former property management clients in Alexandria.
If you decide you would like to sell your rental, Get in touch with us and we'll start by preparing a comparative market analysis to help predict what your property can likely fetch if sold. We'll also prepare estimated proceeds so you understand how much you'll actually make after the settlement.
What is a 1031 Tax Exchange and how can it benefit me?
A 1031 Tax Exchange is usually of greatest benefit to landlords in Alexandria that have held property for a longer period of time (more than ten years). Thanks to IRC Section 1031, a properly structured 1031 exchange allows a real estate investor to sell a property, to reinvest the proceeds in a new rental unit and to defer all capital gain taxes. IRC Section 1031 (a)(1) states:
“No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment.”
To understand the powerful protection a 1031 exchange offers, consider the following examples:
- A rental investor has a $100,000 capital gain and incurs a tax liability of approximately $35,000 in combined taxes (depreciation recapture, federal and state capital gain taxes) when the property is sold. Only $65,000 remains to reinvest in another property.
Assuming a 25% down payment and a 75% loan-to-value ratio, the seller would only be able to purchase a $260,000 new property.
- If the same rental investor chose to exchange, however, he or she would be able to reinvest the entire $100,000 of equity in the purchase of $400,000 in real estate, assuming the same down payment and loan-to-value ratios.
As the above example demonstrates, exchanges protect rental investors from capital gain taxes as well as facilitating significant portfolio growth and increased return on investment. In order to access the full potential of these benefits, it is critical to have a comprehensive knowledge of the exchange process and the IRC. For instance, an accurate understanding of the key term “like-kind” can reveal opportunities that might have otherwise been overlooked.
What is a short-sale?
A short-sale happens when the seller sells a property for less than what is owed on the property. In the past, because of market contractions, some of our property owner clients have found themselves in an untenable situation with regards to their rental unit. In those cases the best way out was often a short sale. Quite frankly, due to market expansion and inflation, this has not been much of a concern lately.
But, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can explain to you the ramifications of a short-sale help you decide if that option is best for you and your property.
Should you understand more about this area?
Our Guide to Real Estate is a helpful resource for anyone who hopes to find out more about Alexandria and nearby areas. The Guide to Real Estate has data about what has sold and what is on the market, and a few surprising facts that you might not know. Furthermore, our Guide has quite a few of the elements of residing in Alexandria. Certainly, all of this is helpful for purchasers and sellers, but owners and tenants will likely also find the facts to be somewhat eye-opening.
a handy archive for property owners in Alexandria
- Before you put a renter in your investment in Alexandria
- Collections and evictions
- Communications with the renter
- During tenancy
- End of tenancy and what happens when a renter breaks the lease
- How does the property owner get paid?
- How your rental manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for property owners using our rental management
- How Nesbitt Realty & Management manage keys
- Alexandria rental investor responsibilities
- Maintenance, repairs & inspections for your rental investment in Alexandria
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When property owners don't yet know their new address
- Vetting renters in Alexandria