In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Forest Edge
After a period of service as a rental unit, property owners often decide 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 landlord clients in Forest Edge.
If you decide you would like to sell your rental, Email us and we'll begin by preparing a comparative market analysis to help predict what your rental property can probably bring if sold. We'll also prepare estimated proceeds so you know how much you'll really 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 rental investors in Forest Edge who have held 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 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 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 shelter real estate 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 reveal opportunities that might have otherwise been dismissed.
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 property owner 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 a concern lately.
Conversely, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can go over the ramifications of a short-sale help you decide if that choice is best for you and your rental property.
Do you want understand more about our local real estate market?
Our Guide to Real Estate is a handy tool for anyone who hopes to investigate real estate facts about Forest Edge and surrounding communities. The Guide to Real Estate compiles facts about what has sold and what is currently listed, and many compelling facts that you may not be aware of. Furthermore, our Guide has many of the benefits of living in Forest Edge. As might be expected, all of this is interesting for purchasers and sellers, but property owners and renters will likely also find this data to be quite sobering.
a useful source for property owners in Forest Edge
- Before you lease out your property in Forest Edge
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of tenancy and what happens when a tenant breaks the lease
- How does the property owner get paid?
- How your management company handles the association and your community
- How your rental manager handles utilities
- How Nesbitt Realty & Management finds tenants
- Insurance matters for property owners using our rental management
- How Nesbitt Realty & Management manage keys
- Forest Edge property owner responsibilities
- Maintenance, repairs & inspections for your rental property in Forest Edge
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When landlords don't yet know their new address
- Vetting renters in Forest Edge