In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Arlington Ridge
After a period of owning a rental, landlords can choose to sell their rental unit. 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 Arlington Ridge.
If you decide you would like to sell your rental property, Contact us and we'll start by preparing a comparative market analysis to help figure out what your rental can probably 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 rental investors in Arlington Ridge 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 an 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:
- A real estate 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 demonstrates, exchanges shelter 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 crucial to have a good working 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 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.
Nevertheless, 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.
Should you know more about this area?
Our Guide to Real Estate is a helpful tool for everyone who hopes to learn more about Arlington Ridge and surrounding communities. The Guide to Real Estate provides information about what has sold and what is on the market, as well as some compelling facts that you may not know. Furthermore, our Guide features quite a few of the aspects of life in Arlington Ridge. Of course, all of this is helpful for purchasers and sellers, but real estate investors and renters will likely also find these tools to be somewhat sobering.
a handy archive for property owners in Arlington Ridge
- Before you rent out your property in Arlington Ridge
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of tenancy and what happens when a renter breaks the lease
- How does the landlord get paid?
- How your property manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt finds renters
- Insurance matters for owners using our rental management
- How Nesbitt Realty & Management manage keys
- Arlington Ridge rental investor responsibilities
- Maintenance, repairs & inspections for your rental investment in Arlington Ridge
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When property owners don't yet know their new address
- Vetting renters in Arlington Ridge