In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Front Royal
After a period of service as a property, rental investors may choose 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 Front Royal.
If you decide you would like to sell your rental, Email us and we'll start by preparing a comparative market analysis to help figure out what your property can probably bring if sold. We'll also prepare estimated proceeds so you understand 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 rental investors in Front Royal who 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 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 landlord 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 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 important 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 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 real estate investor 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 an issue lately.
On the other hand, 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 unit.
Should you understand more about the local real estate market?
Our Guide to Real Estate is a free resource for everyone who hopes to learn more about Front Royal and nearby communities. The Guide to Real Estate compiles facts regarding what has sold and what is on the market, and a couple of compelling facts that you might not know. Furthermore, our Guide features quite a few of the fundamentals of living in Front Royal. As a matter of course, all of this is useful for purchasers and sellers, but property owners and renters might also find these tools to be very useful.
a handy source for landlords in Front Royal
- Before you lease out your investment in Front Royal
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of tenancy and what happens when a tenant breaks the lease
- How does the landlord get paid?
- How your rental 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 property management
- How Nesbitt Realty & Management manage keys
- Front Royal landlord responsibilities
- Maintenance, repairs & inspections for your rental investment in Front Royal
- 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 Front Royal