Attention Investors: I’m about to give you 8.8 reasons to sell your investment property in 2010. Actually I’ll give you 5 reasons, and then another 3.8 reasons. 8.8 reasons that will net you an additional 8.8% when you sell your investment property. Guaranteed! What am I talking about? Capital gains taxes.
Many investors are already aware that capital gains tax rates for most brackets are due to increase from 15% to 20% in 2011–so your profit is 5% less if you sell January 1, 2011 versus December 31, 2010. 5%!
But many investors haven’t yet realized that, buried in the health care bill that recently passed, for those above certain income limits, there is an additional 3.8% surcharge on real estate investment profit starting in 2013.
Of course there are ways to avoid these taxes–many investors will consider pursuing 1031 exchanges, but if you’re hoping to liquidate some of your real estate holdings, you’d be well advised to consider doing so in 2010.
Another reason to consider selling now? Low interest rates. Buyers have more purchasing power than they’ve had in years thanks to historical low interest rates within the conforming loan level limits. But these rates won’t last forever, and buyers are taking advantage. A flood of inventory in the upper price ranges ($1,000,000 and up) in our area is expected in the coming years, which will create competition in those brackets for years to come, as financing remains tight.
If you own a Northern Virginia investment property and would like to keep 8.8% more profit by selling in 2010, contact Katie Wethman, CPA, MBA, Realtor for a free analysis of your home’s value.
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More Resources: Free Market Report for Your Property
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