In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Burke
After a period of service as a rental unit, rental investors often choose 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 Burke.
If you decide you would like to sell your rental, Phone us and we'll start by preparing a comparative market analysis to help determine what your rental unit will probably bring if sold. We'll also prepare estimated proceeds so you understand 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 real estate investors in Burke who 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 property owner to sell a property, to reinvest the proceeds in a new 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 landlord 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 landlord 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 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 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 might have otherwise been overlooked.
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 rental 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.
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 right for you and your rental property.
Should you understand more about this local real estate market?
Our Guide to Real Estate is a free tool for anyone who wants to find out more about Burke and surrounding communities. The Guide to Real Estate includes data regarding what has sold and what is currently listed, as well as some interesting facts that you may not be aware of. And, our Guide has many of the fundamentals of living in Burke. Of course, most of this is useful for buyers and sellers, but landlords and tenants should also find this information to be very informative.
a good archive for landlords in Burke
- Before you rent out your investment in Burke
- Collections and evictions
- Communications with the renter
- During the lease term
- End of tenancy and what happens when a tenant breaks the lease
- How does the owner get paid?
- How your rental manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty finds renters
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Burke landlord responsibilities
- Maintenance, repairs & inspections for your property in Burke
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When property owners don't yet know their new address
- Vetting tenants in Burke