In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Edinburg
After a period of service as a property, real estate investors can choose to sell their property. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many rental units at best market value for our former landlord clients in Edinburg.
If you decide you would like to sell your rental unit, Email us and we'll start by preparing a comparative market analysis to help predict what your property can probably bring if sold. We'll also prepare estimated proceeds so you know how much you'll actually 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 landlords 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 real estate 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 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 property owner 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 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 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 uncover 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 landlord clients have found themselves in an untenable situation with regards to their rental. 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, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can clarify the ramifications of a short-sale help you decide if that choice is right for you and your property.
Should you know more about the community?
Nesbitt Realty's Guide to Real Estate is a free resource for everyone who hopes to find out more about Edinburg and surrounding areas. The Guide to Real Estate includes facts regarding what has sold and what is currently listed, as well as a couple of surprising facts that you might not be aware of. And, our Guide features quite a few of the fundamentals of living in Edinburg. Of course, most of this is helpful for buyers and sellers, but landlords and renters should also find these resources to be very edifying.
a free archive for rental investors in Edinburg
- Before you put a renter in your rental in Edinburg
- Collections and evictions
- Communications with the renter
- During tenancy
- End of lease term and what happens when a renter breaks the lease
- How does the property owner get paid?
- How your management company handles the association and your community
- How your management company handles utilities
- How Nesbitt Realty & Management finds renters
- Insurance matters for rental investors using our property management
- How Nesbitt Realty & Management manage keys
- Edinburg rental investor responsibilities
- Maintenance, repairs & inspections for your rental investment in Edinburg
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When property owners don't yet know their new address
- Vetting renters in Edinburg