In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Northern Virginia
After a period of owning a rental property, rental investors may decide to sell their rental unit. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many properties at best market value for our former landlord clients in Northern Virginia.
If you decide you would like to sell your property, Contact us and we'll start by preparing a comparative market analysis to help figure out what your rental can probably fetch if sold. We'll also prepare estimated proceeds so you understand how much you'll really 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 rental investors in Northern Virginia who have owned property 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 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 shelter 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 comprehensive knowledge of the exchange process and the IRC. For instance, an accurate understanding of the key term “like-kind” can uncover possibilities 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 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 a concern lately.
But, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can go over the consequences of a short-sale help you decide if that option is best for you and your rental property.
Do you need know more about the local real estate market?
Nesbitt Realty's Guide to Real Estate is a free resource for anyone who wants to find out more about Northern Virginia and surrounding communities. The Guide to Real Estate compiles information regarding what has sold and what is on the market, as well as a few shocking facts that you might not be aware of. In addition, our Guide spotlights many of the aspects of living in Northern Virginia. Of course, most of this is interesting for buyers and sellers, but rental investors and renters might also find this data to be very enlightening.
Landlord Reference
a useful source for landlords in Northern Virginia
- Before you put a renter in your property in Northern Virginia
- Collections and evictions
- Communications with the renter
- During the lease term
- End of tenancy and what happens when a renter breaks the lease
- How does the rental investor get paid?
- How your management company handles the association and your community
- How your rental manager handles utilities
- How Nesbitt Management finds renters
- Insurance matters for property owners using our rental management
- How Nesbitt Management handles keys
- Northern Virginia rental investor responsibilities
- Maintenance, repairs & inspections for your rental investment in Northern Virginia
- 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 renters in Northern Virginia