In addition to property management, Nesbitt Realty is a full-service real estate brokerage serving Oakton
After a period of owning a rental unit, landlords often choose to sell their rental property. Nesbitt Realty is a full service brokerage and we have successfully and quickly sold many rental properties at best market value for our former property management clients in Oakton.
If you decide you would like to sell your rental, Connect with us and we'll start by preparing a comparative market analysis to help predict what your rental can probably fetch if sold. We'll also prepare estimated proceeds so you understand how much you'll really net at 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 Oakton that have owned rental 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 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 real estate 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 real estate 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 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 critical 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 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 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.
But, if you need it, members of our staff have CPDE (certified distressed property expert) training. We can clarify the consequences of a short-sale help you decide if that option is best for you and your rental.
Do you want understand more about our area?
Nesbitt Realty's Guide to Real Estate is a helpful tool for everyone who wants to investigate real estate facts about Oakton and surrounding areas. The Guide to Real Estate has facts regarding what has sold and what is currently listed, and some interesting facts that you might not know. And, our Guide highlights some aspects of life in Oakton. Of course, most of this is useful for buyers and sellers, but owners and renters may also find the facts to be somewhat edifying.
Landlord Reference
a free reference for landlords in Oakton
- Before you rent out your rental property in Oakton
- 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 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 landlords using our rental management
- How Nesbitt Management handles keys
- Oakton landlord responsibilities
- Maintenance, repairs & inspections for your property in Oakton
- 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 renters in Oakton