In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Port Royal
After a period of service as a rental property, real estate investors may decide to sell their rental property. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many rental properties at best market value for our former landlord clients in Port Royal.
If you decide you would like to sell your property, Get in touch with us and we'll begin by preparing a comparative market analysis to help figure out what your rental can likely fetch if sold. We'll also prepare estimated proceeds so you understand how much you'll actually net at the settlement.
What is a 1031 Tax Exchange and how can it benefit me?
A 1031 Tax Exchange is usually of greatest benefit to property owners in Port Royal that have held rental 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 property 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 protect property owners 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 could have otherwise been dismissed.
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 real estate investor clients have found themselves in an untenable situation with regards to their rental 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 an issue lately.
In contrast, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can go over the ramifications of a short-sale help you decide if that choice is right for you and your rental unit.
Do you want know more about our local real estate market?
Nesbitt Realty's Guide to Real Estate is a helpful resource for anyone who needs to investigate real estate facts about Port Royal and nearby areas. The Guide to Real Estate provides information about what has sold and what is on the market, and a couple of interesting facts that you might not be aware of. In addition, our Guide has some benefits of residing in Port Royal. Of course, all of this is helpful for purchasers and sellers, but rental investors and tenants might also find the facts to be very sobering.
a useful reference for rental investors in Port Royal
- Before you put a renter in your investment in Port Royal
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of lease term and what happens when a renter breaks the lease
- How does the owner get paid?
- How your property manager handles the association and your community
- How your rental manager handles utilities
- How Nesbitt finds tenants
- Insurance matters for property owners using our property management
- How Nesbitt Realty & Management manage keys
- Port Royal property owner responsibilities
- Maintenance, repairs & inspections for your rental property in Port Royal
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When owners don't yet know their new address
- Vetting tenants in Port Royal