In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Dunn Loring
After a period of owning a rental, real estate investors may decide to sell their 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 Dunn Loring.
If you decide you would like to sell your rental property, Email us and we'll start by preparing a comparative market analysis to help predict what your rental property can likely bring 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 property owners in Dunn Loring who 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 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 real estate 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 important 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 opportunities 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 property owner 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.
But, 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.
Should you understand more about this community?
Nesbitt Realty's Guide to Real Estate is a handy resource for everyone who wants to learn more about Dunn Loring and surrounding areas. The Guide to Real Estate provides information regarding what has sold and what is on the market, as well as a couple of interesting facts that you may not be aware of. Also, our Guide highlights quite a few of the benefits of life in Dunn Loring. Definitely, all of this is helpful for buyers and sellers, but owners and tenants will likely also find the facts to be quite useful.
a handy reference for property owners in Dunn Loring
- Before you move a tenant into your investment in Dunn Loring
- 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 property owner get paid?
- How your rental manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for rental investors using our rental management
- How Nesbitt Realty & Management manage keys
- Dunn Loring rental investor responsibilities
- Maintenance, repairs & inspections for your rental investment in Dunn Loring
- 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 renters in Dunn Loring