In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Riverwood
After a period of owning a rental property, property owners can choose to sell their rental property. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many rentals at best market value for our former landlord clients in Riverwood.
If you decide you would like to sell your property, Get in touch with us and we'll begin by preparing a comparative market analysis to help predict what your rental property can probably fetch 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 landlords in Riverwood that have held rental unit 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 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 rental investor 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 demonstrates, exchanges protect 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 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 could 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 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.
Conversely, 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 best for you and your rental unit.
Should you know more about this local real estate market?
Our Guide to Real Estate is a helpful resource for everyone who hopes to learn more about Riverwood and neighboring areas. The Guide to Real Estate compiles facts about what has sold and what is on the market, as well as some surprising facts that you might not know. And, our Guide features quite a few of the elements of residing in Riverwood. Yes, all of this is interesting for purchasers and sellers, but property owners and tenants may also find the facts to be very informative.
Landlord Reference
a handy reference for rental investors in Riverwood
- Before you lease out your rental in Riverwood
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of lease term and what happens when a tenant breaks the lease
- How does the landlord get paid?
- How your management company handles the association and your community
- How your management company handles utilities
- How we find renters
- Insurance matters for owners using our property management
- How Nesbitt Management handles keys
- Riverwood property owner responsibilities
- Maintenance, repairs & inspections for your property in Riverwood
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When owners don't yet know their new address
- Vetting tenants in Riverwood