In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Old Town Alexandria
After a period of owning a rental, landlords may decide to sell their property. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many rental units at best market value for our former property management clients in Old Town Alexandria.
If you decide you would like to sell your rental unit, Contact us and we'll begin by preparing a comparative market analysis to help determine what your rental unit can likely bring if sold. We'll also prepare estimated proceeds so you know how much you'll really take away from the settlement.
What is a 1031 Tax Exchange and how can it benefit me?
A 1031 Tax Exchange is usually of greatest benefit to rental investors in Old Town Alexandria that have owned rental property for a longer period of time (more than ten years). Thanks to IRC Section 1031, a properly structured 1031 exchange allows a rental investor to sell a property, to reinvest the proceeds in a new rental 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:
- An 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 property owner 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 shows, exchanges shelter 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 crucial to have a comprehensive knowledge of the exchange process and the IRC. For instance, an accurate understanding of the key term “like-kind” can uncover possibilities that could have otherwise been dismissed.
What is a short-sale?
A short-sale occurs 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 investor clients have found themselves in an untenable situation with regards to their property. 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.
However, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can explain to you the consequences of a short-sale help you decide if that option is right for you and your rental unit.
Do you want know more about this community?
Our Guide to Real Estate is a handy tool for anyone who hopes to investigate real estate facts about Old Town Alexandria and nearby communities. The Guide to Real Estate includes data about what has sold and what is on the market, as well as a few interesting facts that you might not know. In addition, our Guide highlights many of the fundamentals of residing in Old Town Alexandria. Yes, all of this is interesting for purchasers and sellers, but rental investors and tenants will also find these tools to be somewhat useful.
Landlord Reference
a good reference for landlords in Old Town Alexandria
- Before you rent out your rental in Old Town Alexandria
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of lease term and what happens when a renter breaks the lease
- How does the rental investor get paid?
- How your property manager handles the association and your community
- How your property manager handles utilities
- How Nesbitt Realty finds renters
- Insurance matters for rental investors using our rental management
- How Nesbitt Realty & Management manage keys
- Old Town Alexandria landlord responsibilities
- Maintenance, repairs & inspections for your property in Old Town Alexandria
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When property owners don't yet know their new address
- Vetting tenants in Old Town Alexandria