In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Shenandoah County
After a period of service as a property, 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 landlord clients in Shenandoah County.
If you decide you would like to sell your rental, Talk to us and we'll begin by preparing a comparative market analysis to help predict what your rental unit can probably fetch if sold. We'll also prepare estimated proceeds so you understand how much you'll really 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 rental investors in Shenandoah County who have owned rental unit 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 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 shelter landlords 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 property owner clients have found themselves in an untenable situation with regards to their rental unit. 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.
However, 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 right for you and your rental.
Do you need understand more about the community?
Nesbitt Realty's Guide to Real Estate is a helpful tool for everyone who needs to find out more about Shenandoah County and surrounding areas. The Guide to Real Estate compiles information about what has sold and what is for sale, as well as many interesting facts that you may not be aware of. Furthermore, our Guide spotlights many of the aspects of life in Shenandoah County. As a matter of course, most of this is interesting for purchasers and sellers, but rental investors and renters will probably also find this information to be very informative.
a good source for landlords in Shenandoah County
- Before you move a tenant into your investment in Shenandoah County
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of lease term and what happens when a tenant breaks the lease
- How does the landlord get paid?
- How your property management company handles the association and your community
- How your property management company handles utilities
- How Nesbitt finds renters
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Shenandoah County property owner 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 landlords don't yet know their new address
- Vetting renters in Shenandoah County