In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Middletown
After a period of service as a rental, real estate investors can 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 Middletown.
If you decide you would like to sell your rental, Reach out to us and we'll start by preparing a comparative market analysis to help figure out what your property can probably bring if sold. We'll also prepare estimated proceeds so you understand how much you'll really 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 property owners in Middletown 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 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 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 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 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 uncover possibilities that might 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 an issue lately.
Conversely, 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 choice is right for you and your rental.
Do you need know more about the area?
Our Guide to Real Estate is a handy resource for anyone who wants to review important real estate information about Middletown and surrounding areas. The Guide to Real Estate compiles information about what has sold and what is on the market, as well as some surprising facts that you may not be aware of. And, our Guide features quite a few of the aspects of living in Middletown. Of course, most of this is useful for purchasers and sellers, but property owners and renters will probably also find this data to be somewhat eye-opening.
a handy archive for landlords in Middletown
- Before you put a renter in your investment in Middletown
- 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 landlord get paid?
- How your property management company handles the association and your community
- How your management company handles utilities
- How Nesbitt Realty & Management finds renters
- Insurance matters for property owners using our property management
- How Nesbitt Realty & Management manage keys
- Middletown owner responsibilities
- Maintenance, repairs & inspections for your rental property in Middletown
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When landlords don't yet know their new address
- Vetting tenants in Middletown