In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Chantilly
After a period of service as a rental property, property owners may choose to sell their rental property. 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 Chantilly.
If you decide you would like to sell your rental unit, Call us and we'll begin by preparing a comparative market analysis to help predict what your rental can likely bring if sold. We'll also prepare estimated proceeds so you know how much you'll actually 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 Chantilly that have held rental unit 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 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 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 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 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 could 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 a concern lately.
On the other hand, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can clarify the consequences of a short-sale help you decide if that choice is best for you and your rental property.
Do you want understand more about this community?
Our Guide to Real Estate is a free tool for anyone who needs to review important real estate information about Chantilly and nearby communities. The Guide to Real Estate provides data regarding what has sold and what is for sale, as well as a few surprising facts that you may not be aware of. And, our Guide has quite a few of the aspects of living in Chantilly. Definitely, most of this is useful for purchasers and sellers, but rental investors and tenants will also find these resources to be somewhat eye-opening.
a good reference for rental investors in Chantilly
- Before you lease out your rental property in Chantilly
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of lease term and what happens when a tenant 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 Realty & Management finds renters
- Insurance matters for property owners using our property management
- How Nesbitt Realty & Management manage keys
- Chantilly rental investor responsibilities
- Maintenance, repairs & inspections for your rental investment in Chantilly
- 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 tenants in Chantilly