In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Shenandoah County
After a period of service as a rental property, property owners may decide to sell their rental unit. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many rentals at best market value for our former landlord clients in Shenandoah County.
If you decide you would like to sell your rental property, Call us and we'll begin by preparing a comparative market analysis to help determine what your property will probably 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 Shenandoah 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 rental investor to sell a property, to reinvest the proceeds in a new rental 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:
- 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 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 shows, exchanges shelter 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 crucial 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 possibilities that might have otherwise been dismissed.
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 real estate 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.
But even so, 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 option is best for you and your rental property.
Should you understand more about the area?
Our Guide to Real Estate is a handy tool for everyone who needs to find out more about Shenandoah County and nearby communities. The Guide to Real Estate compiles facts regarding what has sold and what is currently listed, as well as some compelling facts that you might not be aware of. And, our Guide highlights quite a few of the elements of residing in Shenandoah County. Of course, all of this is interesting for buyers and sellers, but owners and tenants should also find this data to be very useful.
a free source for property owners in Shenandoah County
- Before you move a tenant into your rental property in Shenandoah County
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of tenancy and what happens when a renter breaks the lease
- How does the property owner get paid?
- How your rental manager handles the association and your community
- How your property manager handles utilities
- How Nesbitt Realty & Management finds tenants
- Insurance matters for landlords using our rental management
- How Nesbitt Realty & Management manage keys
- Shenandoah County rental investor responsibilities
- Maintenance, repairs & inspections for your property in Shenandoah County
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When owners don't yet know their new address
- Vetting renters in Shenandoah County