In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Pimmit Hills
After a period of owning a property, rental investors often choose to sell their rental unit. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many rental properties at best market value for our former property management clients in Pimmit Hills.
If you decide you would like to sell your rental, Phone us and we'll start by preparing a comparative market analysis to help figure out what your rental unit will 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 Pimmit Hills 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 landlord to sell a property, to reinvest the proceeds in a new rental 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 rental 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 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 shows, exchanges protect property owners 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 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 real estate investor clients have found themselves in an untenable situation with regards to their rental unit. 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 even so, 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 best for you and your rental unit.
Should you understand more about this community?
Our Guide to Real Estate is a helpful tool for anyone who needs to find out more about Pimmit Hills and surrounding areas. The Guide to Real Estate compiles data about what has sold and what is for sale, as well as some compelling facts that you may not know. Not to mention, our Guide features some aspects of living in Pimmit Hills. Naturally, most of this is helpful for buyers and sellers, but owners and renters might also find the facts to be quite informative.
a good source for rental investors in Pimmit Hills
- Before you move a tenant into your rental in Pimmit Hills
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of tenancy and what happens when a tenant breaks the lease
- How does the landlord get paid?
- How your property manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty finds renters
- Insurance matters for property owners using our property management
- How Nesbitt Realty & Management manage keys
- Pimmit Hills landlord responsibilities
- Maintenance, repairs & inspections for your rental property in Pimmit Hills
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When owners don't yet know their new address
- Vetting tenants in Pimmit Hills