In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Rileyville
After a period of owning a rental, rental investors may choose to sell their rental. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many properties at best market value for our former landlord clients in Rileyville.
If you decide you would like to sell your rental unit, Contact us and we'll start by preparing a comparative market analysis to help determine what your rental unit will 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 landlords in Rileyville who have owned property for a longer period of time (more than ten years). Thanks to IRC Section 1031, a properly structured 1031 exchange allows a rental investor to sell a property, to reinvest the proceeds in a new 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 real estate 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 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 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 critical 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 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 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 clarify the consequences of a short-sale help you decide if that choice is best for you and your rental.
Do you need know more about this local real estate market?
Nesbitt Realty's Guide to Real Estate is a helpful tool for everyone who hopes to investigate real estate facts about Rileyville and neighboring communities. The Guide to Real Estate provides data about what has sold and what is currently listed, and a couple of interesting facts that you might not be aware of. In addition, our Guide spotlights quite a few of the fundamentals of life in Rileyville. Naturally, all of this is helpful for purchasers and sellers, but real estate investors and tenants will also find these resources to be somewhat enlightening.
a good reference for rental investors in Rileyville
- Before you lease out your rental property in Rileyville
- Collections and evictions
- Communications with the renter
- During the lease term
- End of tenancy and what happens when a tenant breaks the lease
- How does the owner get paid?
- How your rental manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for property owners using our property management
- How Nesbitt Realty & Management manage keys
- Rileyville rental investor responsibilities
- Maintenance, repairs & inspections for your rental investment in Rileyville
- 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 renters in Rileyville