In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Edinburg
After a period of service as a rental unit, property owners often choose to sell their property. 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 Edinburg.
If you decide you would like to sell your rental property, Phone us and we'll begin by preparing a comparative market analysis to help predict what your rental will probably 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 real estate investors in Edinburg who have held rental 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:
- A rental 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 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 critical 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 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 investor clients have found themselves in an untenable situation with regards to their 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.
Still, 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 property.
Should you know more about this local real estate market?
Our Guide to Real Estate is a handy resource for anyone who hopes to investigate real estate facts about Edinburg and neighboring communities. The Guide to Real Estate compiles data regarding what has sold and what is on the market, and a few interesting facts that you may not be aware of. Not to mention, our Guide highlights many of the fundamentals of residing in Edinburg. As a matter of course, most of this is interesting for purchasers and sellers, but property owners and renters will also find these tools to be quite eye-opening.
a handy source for landlords in Edinburg
- Before you move a tenant into your investment in Edinburg
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of tenancy and what happens when a tenant breaks the lease
- How does the owner get paid?
- How your management company handles the association and your community
- How your rental manager handles utilities
- How Nesbitt Realty finds renters
- Insurance matters for property owners using our property management
- How Nesbitt Realty & Management manage keys
- Edinburg owner responsibilities
- Maintenance, repairs & inspections for your rental property in Edinburg
- 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 tenants in Edinburg