In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Springfield
After a period of owning a property, property owners 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 landlord clients in Springfield.
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 predict what your rental property will probably fetch 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 Springfield who 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 landlord 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 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 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 shows, exchanges protect 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 good working knowledge of the exchange process and the IRC. For instance, an accurate understanding of the key term “like-kind” can reveal possibilities 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 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 a concern lately.
Nevertheless, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can clarify the ramifications of a short-sale help you decide if that option is right for you and your rental.
Do you want know more about this local real estate market?
Our Guide to Real Estate is a handy tool for everyone who needs to review important real estate information about Springfield and surrounding areas. The Guide to Real Estate compiles information about what has sold and what is currently listed, and a few surprising facts that you may not know. In addition, our Guide highlights many of the elements of life in Springfield. Certainly, most of this is interesting for purchasers and sellers, but rental investors and renters might also find this information to be somewhat edifying.
a good archive for rental investors in Springfield
- Before you lease out your investment in Springfield
- 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 property manager handles utilities
- How Nesbitt finds tenants
- Insurance matters for landlords using our rental management
- How Nesbitt Realty & Management manage keys
- Springfield owner responsibilities
- Maintenance, repairs & inspections for your rental investment in Springfield
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When property owners don't yet know their new address
- Vetting tenants in Springfield