In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Cross Junction
After a period of service as a property, property owners may decide to sell their rental unit. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many rental units at best market value for our former landlord clients in Cross Junction.
If you decide you would like to sell your rental unit, Call us and we'll start 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 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 landlords in Cross Junction who have owned rental for a longer period of time (more than ten years). Thanks to IRC Section 1031, a properly structured 1031 exchange allows an investor to sell a property, to reinvest the proceeds in a new rental 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 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 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 possibilities 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 rental. 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.
But even so, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can clarify the consequences of a short-sale help you decide if that choice is best for you and your rental.
Do you want understand more about our area?
Nesbitt Realty's Guide to Real Estate is a free resource for anyone who hopes to investigate real estate facts about Cross Junction and neighboring areas. The Guide to Real Estate provides data regarding what has sold and what is currently listed, as well as a couple of compelling facts that you might not know. Furthermore, our Guide highlights quite a few of the aspects of residing in Cross Junction. As might be expected, most of this is helpful for buyers and sellers, but real estate investors and renters should also find these tools to be somewhat informative.
a useful reference for rental investors in Cross Junction
- Before you rent out your rental property in Cross Junction
- Collections and evictions
- Communications with the renter
- During the lease term
- End of lease term and what happens when a tenant breaks the lease
- How does the landlord get paid?
- How your management company handles the association and your community
- How your property manager handles utilities
- How Nesbitt Realty & Management finds renters
- Insurance matters for owners using our rental management
- How Nesbitt Realty & Management manage keys
- Cross Junction rental investor responsibilities
- Maintenance, repairs & inspections for your rental property in Cross Junction
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When landlords don't yet know their new address
- Vetting renters in Cross Junction