Monthly Archives: February 2018

Hot Home Trend: Go Big With Your Tile

By Melissa Dittmann Tracey, REALTOR® Magazine Supersized tiles are making over more floors, and this may be welcome news to many homeowners. Large format tiles means less grout to clean. The large tile trend may be partially motivated out of function, not just aesthetics. More homeowners are experimenting with larger tile sizes, whether with porcelain, […]

6 Tax Write-Offs That Landlords Won’t Want to Miss

Landlords have always enjoyed tremendous benefits from owning rental property. Nearly all of their expenses–such as mortgage interest–can be deducted, because owning investment property is treated the same as owning a more traditional business.

As we head into prime time tax season, it’s important for landlords to understand the various tax write-offs available to them. Wondering how recent tax reform impacts rental property owners? We’ll talk about that, too.

Here are 6 tax deductions for rental property owners to take advantage of in 2018.

2018 Tax Deductions for Rental Property Owners

#1: Interest (of All Kinds!)

Most people know that they can write off mortgage interest on investment property. That’s typically the single largest tax write-off. However, landlords can also write off any interest incurred on credit cards, lines of credit, and other loans used to acquire, improve, or perform activities related to the property. For instance, if you hosted a holiday party for residents this year and put the tab on your business credit card, you can write off that interest, too!

2018 Tax Deductions for Rental Property Owners

#2: Depreciation

Depreciation is a tricky concept for some people to understand. After all, homes tend to appreciate in value–so why would you get to write off depreciation?

Here’s what you need to know: The IRS considers residential real estate to be a depreciating asset. The building’s “useful” life is 27.5 years. This means you can write off a 1/27th of the building each year. In order to do that, you must separate out the value of the building from the value of the land. Your tax assessor’s database should give you an idea of the value of each of those components, as would an appraisal or an insurance agent’s cost estimate of the building.

More sophisticated real estate investors might want to consider doing a cost segregation study. A cost segregation study allows you to accelerate depreciation for some aspects of the property ahead of others. For instance, personal property–such as furniture, carpets, fixtures, window treatments, and appliances–can usually be fully depreciated over a 5- or 7-year period. Land improvements, such as sidewalks, paving, fences, and landscaping, can usually be depreciated over a 15-year period. The remainder of the building is depreciated over the full 27.5-year period. Cost segregations are much more nuanced than we’ll get into here, but it’s important to understand the benefits of doing a cost segregation study–particularly if you want to put more money back into your pocket on the front end of owning a rental property.

2018 Tax Deductions for Rental Property Owners

#3: Travel

Any travel related to the property, like taking a trip to a Home Depot located 30 miles away, can be written off on your taxes. Investors can even write off travel related to searching for a potential investment property, such as a trip needed to evaluate an out-of-state opportunity. There are some restrictions to this–for instance, at least half of the time spent on that trip must be related to evaluating the investment opportunity. Just be sure to keep detailed records that log your travel expenses.

2018 Tax Deductions for Rental Property Owners

#4: Employees and Contractors

Anytime you pay someone to perform services related to your property, you can deduct their wages or fees as a business expense. This is true for both landlords and homeowners associations. As always, you’ll want to keep receipts. Even if you’re just paying a neighborhood kid to shovel the driveway for $50 a pop, write up a simple receipt and keep a copy for your records.

2018 Tax Deductions for Rental Property Owners

#5: Legal and Professional Services

Landlords, property managers, and homeowners associations can all write off professional services incurred in the course of running the business. This includes any fees paid to your attorney, accountant, management company, and investment advisors. Soft costs like these are considered operational expenses, and are a requisite part of doing business–so be sure to write them off accordingly!

2018 Tax Deductions for Rental Property Owners

#6: Marketing Expenses

Did you launch a new website this year? Maybe you printed new signs for the front of the property highlighting available units. Whatever the case may be, those costs can be deducted on your taxes. Any advertising, whether for your business or for a specific property, can be written off as a business expense. This includes ads placed in newspapers, postage for mailers, or even the fee you paid to participate in a local real estate development panel. Too often, property owners, managers, and HOAs consider these costs just a routine “part of doing business” and forget to write them off–but these costs add up!

As we head into tax season, it’s important for landlords, property managers, and homeowners associations to really understand the full breadth of tax write-offs available to those who own or operate investment properties.

You might want to consider hiring an accountant to ensure that you’re taking advantage of all of these tax deductions. However, an accountant can only help you so far as you have the proper receipts, bank statements, and documentation to support these write-offs.

If you struggle to track your expenses (guilty as charged!), it might be time to hire a property manager. An experienced property manager should be able to systematize the process for you so that each year, you fly through tax season with ease. When you’re ready to find a property manager, All Property Management will be here to help!

P.S. Want to learn more about how tax reform affects landlords? Get all of the information you need in this post: Here’s how the new tax law impacts rental property owners

The post 6 Tax Write-Offs That Landlords Won’t Want to Miss appeared first on APM.

Styling Tips to ‘Wow’ Spring-Time Home Buyers

By Patti Stern, PJ & Co. Staging and Interior Decorating The new year and the upcoming spring season brings with it a fresh outlook and new beginnings. What will prospective home buyers be thinking about while searching for their new “happy place”? For sellers preparing their homes to sell this spring, that means engaging buyers […]

7 Tips for Handling a Hoarding Resident at Your Property

Every time I visit my parents’ house, I threaten to bring a commercial-grade dumpster with me the next time around. They just have TOO. MUCH. STUFF. It feels like the walls are caving in on me!

You might feel the same way about a resident living at your property. Unfortunately, you can’t just show up with a dumpster. So, what do you do about a hoarder living in your property?

Most landlords, property managers, and HOAs tread lightly when it comes to hoarding. Of course, they want to be respectful of a resident’s space and their belongings. And after all, there’s usually a fine line between being sloppy, unkempt, or dirty versus being an actual “hoarder.”

However, that doesn’t mean that you should kick the can down the road. At best, hoarders can be a nuisance to other residents. At worst, hoarders can compromise the safety and sanitation of a property.

Here are 7 tips for handling a hoarder at your property.

How to Deal with a Hoarder Tenant: Tip #1

Proceed with Caution

What many people don’t realize is that hoarding isn’t just an annoying behavior–it’s a mental disorder. It’s considered a subtype of obsessive-compulsive disorder (OCD) that’s characterized by the excessive acquisition of worthless items. Since hoarding has been officially recognized by the American Psychiatric Association, it means that hoarding qualifies as a disability under federal and state anti-discrimination laws–and therefore, hoarders are protected under the federal Fair Housing Act. Landlords, property managers, and HOAs must make reasonable accommodations for hoarders before considering eviction.

For more information on accommodating tenants struggling with mental illness, check out this blog post: 14 Guidelines for Accommodating Mentally Ill Tenants.

How to Deal with a Hoarder Tenant: Tip #2

Understand Your Responsibilities

In most states, the landlord has a responsibility to provide a habitable dwelling. This duty is often referred to as the “warranty of habitability” and is implied in nearly every standard lease agreement. In exchange, most states require tenants to keep their units “clean and sanitary.” If someone’s hoarding interferes with either party’s ability to carry out their respective duties, it’s time to take action.

How to Deal with a Hoarder Tenant: Tip #3

Determine What’s Messy vs. Hoarding

As a general rule of thumb, we consider a person to be “hoarding” if their behavior goes beyond clutter and blocks emergency exits or doorways; interferes with ventilation or sprinkler systems; attracts pests through improper food storage; or creates hazards for other residents.

How to Deal with a Hoarder Tenant: Tip #4

Contact the Tenant ASAP

If you suspect a person is hoarding, get in touch with that resident as soon as possible, before the problem becomes more pronounced. Remind them of their lease obligations–namely, to keep the unit clean, sanitary, and free from clutter. Perhaps there’s a reason for the clutter. Maybe someone is preparing to move. Maybe the resident is temporarily housing furniture and other items while their parents’ home is undergoing renovations. There may be a legitimate reason for the clutter; and hopefully, the matter can be resolved swiftly–before it becomes a larger issue.

How to Deal with a Hoarder Tenant: Tip #5

Offer to Help

Consider ways that you might be able to help your hoarder tenant. Is there extra storage space in your basement that they could lease? Do you have a deal with a local facility that could offer them a discounted storage unit? Sometimes there’s nothing you can do to help–but if it seems at all possible to extend a helping hand to resolve the issue, offer that carrot before reaching for the stick.

How to Deal with a Hoarder Tenant: Tip #6

Document Everything

In the worst case scenario, you might have to evict the hoarder tenant. You want to start preparing for the possibility now. Begin to document everything. Take pictures, videos, and notes to document the property’s condition. Keep copies of all communication between you and the tenant. You’ll want to have these records if an eviction becomes necessary.

How to Deal with a Hoarder Tenant: Tip #7

Begin Eviction Proceedings

Nobody likes evicting a resident; but an eviction is often the last line of defense for landlords, property managers, and HOAs. You’ll want to use all of the documentation you’ve compiled to date to show the court that you’ve tried everything you could to accommodate the resident before the eviction became necessary. If an eviction seems necessary, consult with a property manager and/or real estate attorney. Evictions can be messy (and worse, expensive), so you’ll want to follow procedures to a T.

There’s no fool-proof way to avoid hoarding; but usually, one of the best safeguards is by screening residents closely before signing a lease. Landlord references can really be insightful–so don’t skip this step!

If you’re looking for help with screening applicants or dealing with problem residents, consider hiring a property manager. When you’re ready to search for a property manager in your area, All Property Management will be here to help.

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7 Ways to Add More Romance to a Home’s Decor

By Melissa Dittmann Tracey, REALTOR® Magazine Love is in the air with Valentine’s Day this week. But a romantic flair to warm up your home design may very well be in style year-round. In fact, one-third of homeowners say they intended to renovate their master bedrooms to create a more romantic or intimate space, according […]

Don’t Overlook the Power of Social Media! 6 Ways to Engage Residents

Our frequent fliers may have read our recent article on how to attract Millennials to your rental properties. As that post noted, Millennials are a demographic 80 million strong. They’re now the largest group of renters and homebuyers in America.

One of the best ways to appeal to Millennials, we wrote, is by treating them like the digital natives they are. Millennials are practically attached to their phones. They grew up with the internet, are early adopters of new technology, and spend an inordinate amount of time on social media.

So, how should landlords use social media? It’s a great way to connect with and engage residents–but it can also be overwhelming. Not sure where to begin? Here are 6 smart ways to use social media as a support channel for residents.

How Should Landlords Use Social Media?

Idea #1: Promote Community Events

Residents who feel connected to their community are more likely to stick around, reducing turnover in the process. If your property is part of a larger apartment or HOA community, you can promote events happening at your property through social media.

Only manage a handful of units? No problem! You can use social media in the same manner to promote local events that are happening nearby. Share details about the upcoming farmers’ market or craft fair, publicize the upcoming parade or fireworks display, or just share information about local businesses that you think your residents would enjoy.

How Should Landlords Use Social Media?

Idea #2: Respond to Inquiries

Encourage residents to contact you via social media. This is a great way to connect with residents who may feel their issue might be too minor to call management directly. For instance, ask residents to snap a photo and report a sidewalk that still needs to be shoveled.

How Should Landlords Use Social Media?

Idea #3: Share Maintenance Updates

You can use social media to keep residents updated about property repairs and maintenance. If you’re undergoing a major renovation or property upgrade of some sort, social media is a great way to track progress. You can ask residents to share feedback on what they’d like the project to include. You can document progress as construction gets underway. Best of all, you’ll have a built-in audience to share before-and-after photos once the project is complete!

How Should Landlords Use Social Media?

Idea #4: Share Vacancies

On social media, you can share information about units that you need help filling. Residents who love your property may be inclined to help you fill vacancies–and you can offer a referral reward to encourage them to do so (such as a gift card or a discount on rent). Promote these vacancies on social media and hopefully, your residents will share the posts to spread awareness that a new unit is about to become available.

How Should Landlords Use Social Media?

Idea #5: Send Out Alerts

Social media is a great way to share pertinent information with residents. For example, you might want to remind them to let their faucets drip during the upcoming cold spell to prevent pipes from bursting. Let them know that repairs to the roof are scheduled to begin on March 1. Alert them to a water main break that will temporarily close the laundry room. Social media is a great way to ensure ongoing communication with residents without flooding their email inbox or sending individual text messages.

How Should Landlords Use Social Media?

Idea #6: Cultivate Your Brand

Nowadays, branding is everything! Properties have names. They are associated with lifestyles. Use social media to cultivate a brand for your property and engage prospective residents. Show them pictures, videos, and other insights about what it would be like to live in your building. Snap a photo of people lounging on the roof deck, or capture a video from your recent resident mixer. Social media is a powerful tool that property owners are increasingly using to build their property’s brand.

Now, here’s a major caveat: Social media can be really time-intensive. It’s important to have a clearly-defined social media strategy before you start tweeting away.

Start by outlining your objectives. What are you trying to achieve with your social media strategy? Next, assign responsibility. Who will manage your social media strategy? How often will they post? Remember, social media is intended to be social–so it’s not just about posting, but also engaging with your audience and responding to questions, comments, and inquires in a friendly and timely fashion.

It takes time to ramp up your social media presence and get it going; but once you do, you’ll find that social media can be one of the best ways to engage residents and build a sense of community around your property.

P.S. To learn more about using social media for your rental properties, we highly recommend this guide: A Property Manager’s Guide to Social Media. It’s targeted toward property managers, but it contains countless valuable tidbits of advice for landlords and homeowners associations, too!

The post Don’t Overlook the Power of Social Media! 6 Ways to Engage Residents appeared first on APM.

#193 Financing Multifamily Deals with Michael Blank

The hardest deal is the first property. Michael says you’ll spend more time buying that first two unit compared to the 50 unit you’re going to buy a few years later. That’s because you’ll have the systems in place and trust from your investors to make a sizable profit.

Check out this episode of the RentPrep For Landlords podcast

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