In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Strasburg
After a period of owning a rental unit, landlords often decide to sell their property. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many properties at best market value for our former property management clients in Strasburg.
If you decide you would like to sell your rental, Connect with us and we'll begin by preparing a comparative market analysis to help figure out what your rental property will likely bring 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 Strasburg that have owned rental 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 unit 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 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 good working knowledge of the exchange process and the IRC. For instance, an accurate understanding of the key term “like-kind” can uncover opportunities 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. 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 clarify the ramifications of a short-sale help you decide if that option is right for you and your property.
Do you want know more about the local real estate market?
Nesbitt Realty's Guide to Real Estate is a helpful tool for everyone who hopes to learn more about Strasburg and nearby communities. The Guide to Real Estate compiles facts regarding what has sold and what is currently listed, and a couple of compelling facts that you might not be aware of. And, our Guide features many of the assets of residing in Strasburg. Of course, most of this is interesting for purchasers and sellers, but owners and tenants should also find the facts to be quite edifying.
a handy reference for rental investors in Strasburg
- Before you move a tenant into your rental in Strasburg
- Collections and evictions
- Communications with the renter
- During tenancy
- End of tenancy and what happens when a tenant breaks the lease
- How does the property owner get paid?
- How your property manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for rental investors using our rental management
- How Nesbitt Realty & Management manage keys
- Strasburg property owner responsibilities
- Maintenance, repairs & inspections for your rental investment in Strasburg
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When property owners don't yet know their new address
- Vetting tenants in Strasburg