In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Prince William County
After a period of owning a rental unit, rental investors can choose to sell their rental unit. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many properties at best market value for our former property management clients in Prince William County.
If you decide you would like to sell your rental property, Contact us and we'll begin by preparing a comparative market analysis to help predict what your rental unit will likely bring if sold. We'll also prepare estimated proceeds so you understand how much you'll actually net at 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 Prince William County 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 a rental 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:
- 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 shows, exchanges protect rental 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 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 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 landlord clients have found themselves in an untenable situation with regards to their rental 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.
Nevertheless, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can go over the consequences of a short-sale help you decide if that option is right for you and your rental unit.
Do you need understand more about this community?
Nesbitt Realty's Guide to Real Estate is a helpful tool for anyone who needs to learn more about Prince William County and nearby communities. The Guide to Real Estate includes facts about what has sold and what is for sale, as well as many shocking facts that you may not be aware of. Also, our Guide highlights quite a few of the benefits of life in Prince William County. Of course, all of this is interesting for purchasers and sellers, but owners and renters may also find the facts to be quite eye-opening.
a free archive for property owners in Prince William County
- Before you rent out your investment in Prince William County
- 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 landlord get paid?
- How your rental manager handles the association and your community
- How your management company handles utilities
- How Nesbitt Realty finds renters
- Insurance matters for owners using our rental management
- How Nesbitt Realty & Management manage keys
- Prince William County landlord responsibilities
- Maintenance, repairs & inspections for your rental property in Prince William County
- 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 Prince William County