In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Frederick County
After a period of service as a property, landlords 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 Frederick County.
If you decide you would like to sell your rental property, Contact us and we'll start by preparing a comparative market analysis to help determine what your rental can likely 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 Frederick County that have owned 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 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:
- An 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 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 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 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 dismissed.
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 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 even so, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can explain to you the ramifications of a short-sale help you decide if that option is right for you and your property.
Should you know more about this community?
Nesbitt Realty's Guide to Real Estate is a helpful tool for anyone who needs to review important real estate information about Frederick County and nearby areas. The Guide to Real Estate has information about what has sold and what is currently listed, and some shocking facts that you may not be aware of. In addition, our Guide highlights some benefits of life in Frederick County. Definitely, most of this is helpful for buyers and sellers, but real estate investors and renters will probably also find these tools to be quite useful.
a good reference for landlords in Frederick County
- Before you rent out your rental in Frederick County
- 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 owner get paid?
- How your 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
- Frederick County property owner responsibilities
- Maintenance, repairs & inspections for your rental investment in Frederick County
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When property owners don't yet know their new address
- Vetting tenants in Frederick County