In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Penderbrook_square
After a period of owning a rental unit, rental investors may choose to sell their rental property. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many rental properties at best market value for our former landlord clients in Penderbrook_square.
If you decide you would like to sell your property, Connect with us and we'll begin 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 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 landlords in Penderbrook_square who have held 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 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 property owner 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 shows, exchanges shelter landlords 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 reveal opportunities that might have otherwise been overlooked.
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 rental investor clients have found themselves in an untenable situation with regards to their rental 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.
Above all, 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 option is best for you and your property.
Should you understand more about the community?
Our Guide to Real Estate is a free resource for everyone who needs to review important real estate information about Penderbrook_square and neighboring communities. The Guide to Real Estate has facts about what has sold and what is for sale, as well as some shocking facts that you might not know. Furthermore, our Guide has quite a few of the benefits of living in Penderbrook_square. Of course, most of this is helpful for purchasers and sellers, but property owners and renters should also find these resources to be somewhat enlightening.
Landlord Reference
a useful archive for rental investors in Penderbrook_square
- Before you put a renter in your property in Penderbrook_square
- Collections and evictions
- Communications with the renter
- During the lease term
- End of tenancy and what happens when a renter breaks the lease
- How does the property owner get paid?
- How your property management company handles the association and your community
- How your property management company handles utilities
- How Nesbitt finds renters
- Insurance matters for property owners using our property management
- How Nesbitt Realty & Management manage keys
- Penderbrook_square rental investor responsibilities
- Maintenance, repairs & inspections for your property in Penderbrook_square
- 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 renters in Penderbrook_square