In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Rappahannock County
After a period of owning a rental, landlords 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 property management clients in Rappahannock County.
If you decide you would like to sell your rental property, Email us and we'll start by preparing a comparative market analysis to help figure out what your rental unit will probably bring if sold. We'll also prepare estimated proceeds so you understand how much you'll really 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 real estate investors in Rappahannock County that 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 landlord 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 protect 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 critical 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 could 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 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.
On the other hand, 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 unit.
Do you want understand more about the area?
Our Guide to Real Estate is a handy resource for anyone who hopes to investigate real estate facts about Rappahannock County and nearby areas. The Guide to Real Estate provides data regarding what has sold and what is currently listed, and some compelling facts that you may not know. Not to mention, our Guide spotlights many of the aspects of residing in Rappahannock County. As might be expected, most of this is helpful for buyers and sellers, but property owners and tenants will also find these tools to be very edifying.
a handy reference for rental investors in Rappahannock County
- Before you rent out your property in Rappahannock County
- Collections and evictions
- Communications with the renter
- During the lease term
- End of lease term and what happens when a renter breaks the lease
- How does the owner get paid?
- How your property management company handles the association and your community
- How your management company handles utilities
- How Nesbitt Realty finds renters
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Rappahannock County landlord responsibilities
- Maintenance, repairs & inspections for your rental investment in Rappahannock County
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When owners don't yet know their new address
- Vetting tenants in Rappahannock County