In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Browntown
After a period of service as a rental unit, property owners can decide 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 property management clients in Browntown.
If you decide you would like to sell your rental unit, Connect with us and we'll begin by preparing a comparative market analysis to help figure out what your rental property can probably bring if sold. We'll also prepare estimated proceeds so you understand 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 property owners in Browntown that have held property for a longer period of time (more than ten years). Thanks to IRC Section 1031, a properly structured 1031 exchange allows a landlord 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 property owner 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 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 comprehensive knowledge of the exchange process and the IRC. For instance, an accurate understanding of the key term “like-kind” can reveal opportunities that might have otherwise been overlooked.
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 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 an issue lately.
But, 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 choice is right for you and your rental property.
Do you want know more about this local real estate market?
Nesbitt Realty's Guide to Real Estate is a handy resource for anyone who hopes to review important real estate information about Browntown and neighboring areas. The Guide to Real Estate compiles facts regarding what has sold and what is on the market, as well as a few compelling facts that you may not know. In addition, our Guide features some benefits of life in Browntown. Naturally, all of this is helpful for buyers and sellers, but property owners and renters may also find this information to be somewhat informative.
a good reference for landlords in Browntown
- Before you rent out your investment in Browntown
- Collections and evictions
- Communications with the renter
- During the lease term
- End of lease term and what happens when a tenant breaks the lease
- How does the rental investor get paid?
- How your management company handles the association and your community
- How your property manager handles utilities
- How Nesbitt finds renters
- Insurance matters for rental investors using our rental management
- How Nesbitt Realty & Management manage keys
- Browntown owner responsibilities
- Maintenance, repairs & inspections for your property in Browntown
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When landlords don't yet know their new address
- Vetting renters in Browntown