Five Ways a Property Management Company Can Save You Time and Money

If you’re a landlord, you know that managing rental properties is more than just collecting the rent. You have to think about finding the right tenant, dealing with maintenance issues, complying with the law, and so much more.

Managing properties gets very complicated, very quickly. If you manage multiple properties, you know how the complications can multiply.

A full-service property management company can substantially reduce the time you spend thinking about mundane tasks like rent collection, maintenance requests, and finding new tenants. The property manager automates many of these tasks, allowing you to focus on what you care about the most — your job, your family, even purchasing more rental properties.

Understanding Compliance

Understanding state laws, codes, and compliance issues is one of the most complex areas of owning rental properties. A professional property management company has set procedures and manuals to ensure you’re in compliance with the law — so you don’t have to reinvent the wheel.

Property managers also understand the issues surrounding taxes, fair-housing and anti-discrimination laws, and eviction procedures. Companies can address these concerns by leveraging their collective knowledge to deal with these various issues and provide you with the information you need to file your taxes — or even evict a troublesome resident.

Finding The Most Qualified Tenants

I have been managing properties and overlooking operations for a San Diego property management company for 13 years now. I can tell you from experience that vetting residents is one of the most important and time-consuming activities you will undertake as a property owner. Finding reliable tenants can mean the difference between making money or losing money on your investment property.

Reliable property management companies have time-tested procedures to screen out the troublemaker residents from the ideal tenants, while complying to all the laws and regulations previously mentioned. A property management company knows how to handle tenant screening to find residents for your property.

How do you find those qualified tenants? It all comes down to marketing your rental.

To begin, invest a little into the presentation of your property. This extends beyond just cleaning your property into identifying the character of the neighborhood, understanding the type of residents who come to that neighborhood, and what they want in a rental. For example, when we’re working with properties downtown, we know people renting want easy access to their job, a parking space, and information about public transit to get around San Diego. The more you can talk up the nightlife and things to do, the more valuable your apartment building becomes.

Similarly, renters in more residential areas like South Park, Bankers Hill, and North Park here in San Diego are more likely to be interested in settling down. These neighborhoods are populated by single-family homes, parks, and other family-friendly activities. An experienced property manager can leverage this information to secure residents in a timely manner for you.

Day-To-Day Property Management

You will note a common theme in these sections. Property management companies come with a library of knowledge and experience that they can leverage into all aspects of day-to-day operations. The right property management company will have set procedures on when to conduct safety checks, maintenance, and other scheduled inspections and affairs. Most managers will also have a set system for responding to resident concerns, securing a handyman, and collecting rent.

Developing these processes can be extremely time consuming as an owner. You’d need to understand, first, the basic dos and don’ts of tenants rights, and then find the right paperwork or vendors to help you with each stage of move-in or move-out. When things go wrong, it can be quite expensive to find the right people to help at the drop of a hat. Property management companies work with specific vendors across all their properties. Typically this means that they can negotiate better rates than just one property alone can get.

Value for Price

Most property management companies will charge between five to ten percent of the rent. If you only have a few properties, these rates are far cheaper than hiring your own managers.

The management company handles all of the costs associated with managing a team and provides you with the benefits of having an experienced staff. Moreover, property management companies can leverage economies of scale which enable them to retain an experienced, professional team who will provide the best possible service to you and your tenants.

Tenant Services

Finally, property management companies are invaluable if you don’t live near your property. One of the biggest issues confronted by property owners is the ability to move.

Maybe you have a new opportunity or want to change locations. If you’re handling the day-to-day services for your rental property, your options are limited — unless you want to sell.

A full-service property management company removes some of these worries by handling your rentals on your behalf. If you are the primary point-of-contact, you need to be available to work with your residents.

However, a property management company can free you up to move wherever you want (or even purchase properties wherever you want) because the company can collect the rent, maintain the properties, and every other aspect of day-to-day management. Hiring a company to manage your properties is not only convenient but also a great choice for property owners looking to increase their portfolio without having to get tied down. Investing in the right property management company can pay off.

About Micki O’Toole:

Micki is the general manager of PropertyADVANTAGE, a San Diego property management company that specializes in single-family homes and HOA management. They provide comprehensive, full-service packages as well as tenant placement to property owners and communities in San Diego and Riverside counties. Get in touch at info@propadvantage.com.

Cary, Raleigh, Apex, Fuquay, Morrisville, Holly Springs, Durham, Chapel Hill, Garner, Wake Forest. Residential rentals Wake County, RTP, RDU.  http://www.RobertsRentals.net. Triangle area rental homes and property management.  Bev Roberts Rentals

Advertisements

Is now a good time to be a landlord?

1

Is now a good time to be a landlord? We get this question a lot.

Recent articles have reported compelling data regarding the rental market: 

The Wall Street Journal reported “the homeownership rate is hovering around a five-decade low”, because people “no longer see owning a home as an essential part of the American dream.” People also realize “houses are not necessarily the best places to store wealth.”  As a result, there is high rental demand.

According to CNBC, “more people are renting than at any other point in the past 50 years.” As more and more renters enter the market, rent prices will continue to rise.

So what does this all mean?

  • It’s a great time to be a landlord
  • Rent prices will increase
  • More interested tenants
  • Lower chance of a vacancy

We’re excited to share this news with you. If you have any questions, please contact us at (919) 306-5665 or visit our website at: http://www.RobertsRentals.net.

9 Sneaky Fees to Watch for When Hiring a Property Manager

To many landlords, property management services are superfluous, cutting their profit margins to a minimum in exchange for basic services. But the reality is that property managers can make your life extraordinarily easier—and most

43086582_s-300x200

charge a reasonable enough rate that you can draw a monthly profit from your properties (headache-free).

However, when you’re searching for a property manager to handle your landlord responsibilities, it’s important to note that not all fee structures are the same. If you don’t understand how a manager’s fees work, you won’t be able to compare apples to apples, and you might end up shaving your profit more than necessary if you aren’t prepared for those fees when they come up.

9 Fees to Watch For

These are some of the most common “hidden” fees, extra fees, and differences in fee structure to watch for when comparing providers or finalizing a contract:

1. Rent Due and Rent Collected

Many property managers will charge fees as a percentage of rent, but watch how this is worded—there’s a difference between charging as a percentage of rent due and a percentage of rent collected. A percentage of

rent due means your company will charge you based on how much money a tenant owes you; a percentage of rent collected means your company will charge you based on how much money a tenant actually pays you—and is generally more favorable. If you’re charged based on rent due, you’ll end up paying for property management even when your property is vacant and you have no money coming in.

2. Early Cancellation

You may also be charged an early cancellation fee should you break the contract with your property manager before the end of its outlined term. For example, if you agree to work with them for a year and you want out after eight months, you might pay an additional few hundred dollars. Be especially wary of this fee with untested property managers.

3. A La Carte Management Fees

“A la carte” management fees refer to a suite of extra fees a property manager may charge you in addition to basic services. Usually, a property manager will either charge a higher price (and no additional fees) or a lower price, with multiple additional fees, somewhat evening out. Accordingly, it pays to know what fees are applicable and what they might run you. The remaining items in this list could all be classified as a la carte management fees.

4. Vacancy

If a company isn’t charging you the full cost of management while your property is vacant, there may still be an additional vacancy fee. Rather than collecting a percentage of rent due, they may collect a smaller amount from you as a kind of retainer.

5. Advertising

When it comes time to seek a new tenant, some property managers may charge you an additional advertising fee. This would cover the cost of creating media (such as taking photos) and placing it on sources like online listings or paper publications.

6. Leasing

A leasing fee may apply when you find a new tenant for your property. This covers the cost of drafting and securing a new lease agreement and is generally low in cost. If the cost here is high, it should raise a red flag, especially if your resulting tenant turnover seems to increase.

7. Lease Renewal

Lease renewal is even simpler than initial leasing, b

ut it may still require a fee. You may need to draw up new paperwork or renegotiate terms with a tenant, and that means your property managers will be doing a bit of extra work. Expect minimal fees here as well.

8. Maintenance

Property management fees should cover basic instances of maintenance and repair, but some companies may charge extra for big jobs, or for an inspection between tenants.

9. Eviction

Eviction can be a messy process, and if you ever need to evict, you’ll be grateful you have a property management service in your corner. Most property managers will handle the eviction completely on your behalf, but some will charge you an extra fee for the extra work involved. Expect to pay at least a few hundred dollars for this process.

Apples to Apples

Different companies might charge money in different ways, but if they’re offering similar services, you’ll likely find the bottom-line price of each to be competitive with one another. The big difference here is how you plan on using your property management company; for example, if you’re looking for long-term arrangements, an early cancellation fee shouldn’t factor much into your decision. Try to consider all these factors and all price points when comparing providers and making your decision.

Source: biggerpockets.com

A Skilled Property Manager isn’t Cheap & a Cheap Property Manager isn’t Skilled.

1

Why The Cheapest Property Manager Isn’t Necessarily The Best

When it comes to choosing a property management company, it’s worth paying attention to that age-old saying that ‘you get what you pay for’.

Choosing the cheapest property management company may seem like a good idea at the time, particularly if you’re feeling the pressure on your bank balance after purchasing an investment property, but cheap is not satisfactory when it comes to protecting your very valuable asset and it’s important to choose wisely.

Very simply, property managers aren’t all equal and quite possibly, the one that’s offering its services at the lowest fee could also be the one that delivers the least amount of value.   Of course, as a property investor, you would be looking at maximizing the returns on your investment so you wouldn’t want to waste money, but saving a few dollars on cheaper property management upfront could very likely cost you a lot more over the long run.

Let’s look at why price is misleading when it comes to making a choice of property manager.

Firstly, you need to evaluate what the property manager is offering for that price. You should ascertain how many properties each person manages and what services they provide. If they have a multitude of properties on their books with only one property manager looking after them all, they could end up being too busy to focus on the important details of your investment.

You should check how often they will be performing inspections and whether they will be corresponding directly with the tenant to handle any maintenance requests and so on. Very often, a property management company that offers its services for at a very cheap rate will do little more than place tenants and collect rent every month, leaving the property owner to do all the running around.

And that brings us to another very important point – quality of tenant. A reputable property management company will have an extensive database of prospective tenants and a proven strategy for attracting quality tenants quickly and efficiently.   And that’s important because if the leasing real estate agent isn’t totally focused on getting your property tenanted with the right type of person as quickly as possible, you could end up with costly vacancies or a high turnover of inappropriate tenants.

The best property managers also know their areas very well, and they’re able to make informed recommendations about what rents can realistically be achieved, what property upgrades are necessary in order to make the property more marketable or if anything can be done to attract a higher rent, etc. They are also proactive when it comes to alerting owners when leases are due for renewals, advising owners of changes to state and federal regulations.

Warning bells should ring if a property management company that is offering cheap rates has a reputation for high staff turnover.   If the employees aren’t happy, you probably won’t be happy either.

Ideally, your property manager should pride themselves on their ability to communicate and the way they diligently return phone calls – as they do at Bev Roberts Rentals, Inc., leaders in property management in the North Carolina Triangle Area.   Another thing that sets Bev Roberts Rentals, Inc. apart from their competitors is that each property owner has a single point of contact with one real estate agent from leasing to property management within our company – and that’s not something that happens too often in the property management game. In addition We are a family owned and operated business. We believe that working together as a family gives us an advantage over our competitors and has been the key to our success. Our family is committed to outstanding customer service that goes beyond normal client expectations. It’s been proven that family owned businesses are more stable, and tend to have a high level of trust and commitment to customers, because how the company behaves reflects the family’s personal integrity.

If this level of service appeals to you, feel free to contact one of Bev Roberts Rentals professional property managers at (919) 306-5665 or visit our website to see what personalized property management service looks like at http://www.RobertsRentals.net.

Landlord Insurance 101: A Guide to Rental Property Insurance for Owners

More and more Americans are becoming landlords – either by necessity or choice – but do they know what it takes to insure their rental property?

Consider the trend: For more than a decade, homeownership rates have declined while rentals have increased. According to a recent report from Harvard University’s Joint Center for Housing Studies, the nation’s homeownership rate has fallen to just under 64 percent. Plus, the number of new rental households has increased by roughly 770,000 annually since 2004.home-insurance-300x110

Many homeowners who couldn’t sell their homes during the housing crisis decided to rent them out, says Bob Freitag, a North Carolina-based public adjuster.

“A lot of these new landlords didn’t know that they needed more than their existing homeowner policy to insure the property,” he says.

Now that the housing crisis has passed — and interest rates remain low — the idea of buying a second home as a rental property sounds lucrative to many who may be new to the real estate market.

Regardless of the situation that turned you into a landlord, it’s smart to talk to an insurance agent to make sure you have the proper coverage.

“Consider whether your needs or your circumstances have changed,” says Robert P. Hartwig, past president of the Insurance Information Institute. “And if they have — or if you don’t understand something — call your agent. A simple conversation can save you thousands of dollars in e future.”

Landlords and insurance: Getting the right policy

Rule No. 1: New landlords need to call their insurance agent as soon as they decide to rent their property.

“Some insurance companies don’t even want to insure rental properties because of the added risks,” Freitag says. “So you may need to find a new insurer all together. At the very least, you’re going to make significant changes to your existing policy.”

An average homeowners insurance policy doesn’t cover the property if the homeowner is not living there, according to Trent Zachmann, chief operating officer of Renters Warehouse. That’s because renters occupying a property carry a different set of risks and liabilities than homeowners do.

For instance, insurance companies know that homeowners generally take better care of a property than renters, which means they file fewer claims and are cheaper to insure. What’s more, once a house or condo is being rented, the insurance company considers this a commercial use of the property, which changes the insurance equation a bit.

Types of landlord or rental dwelling policies

What type of policy will you need?

“You’re going to need what’s called a landlord or rental dwelling policy,” Zachman says, “and there are some distinct differences between that and a traditional homeowner’s policy.”

But not all dwelling policies — sometimes called tenant occupied dwelling insurance — do the same things. Dwelling policies usually fall into three categories: DP-1, DP-2, and DP-3. Here’s how they break down:

  • DP-1 policy is the most basic and affordable dwelling policy you can buy, and it covers risks like vandalism and theft.
  • DP-2 policy expands coverage to risks like fire and windstorm damage.
  • DP-3 policy is the most comprehensive of all three, covering all perils unless they’re expressly excluded.

Freitag suggests landlords purchase a DP-3 policy. Not only does it cover the broadest range of risks, but it also pays out full replacement costs on a claim as opposed to just “actual cash value.” The difference is critical, he says.

For instance, let’s say a fire causes $10,000 in damage to your 20-year-old rental property. If your dwelling policy only pays out cash value the insurance company will consider the depreciated value of the home, which could cause 20 or 30 percent depreciation on the final claim payout.

However, if your policy pays out full replacement costs, the insurance company will reimburse you for the present-day cost of rebuilding or making repairs, regardless of the home’s age.

Freitag doesn’t favor a cash-value policies, because landlords often need out-of-pocket money to make repairs after filing a claim. “Make sure you tell your agent that you want a policy written for replacement costs,” he says.

Landlord policies may protect against loss of rental income

Landlord policies may also cover the loss of rental income, which is a critical consideration for landlords.

For instance, extensive fire or water damage may make your rental property uninhabitable for several months. If your dwelling policy covers loss of rent — sometimes called fair rental income protection — the insurance company will reimburse you for that unexpected financial hit.

“Make sure you ask your agent to include loss of rent in the policy,” Freitag says. “It only costs pennies on the dollar and it’s incredibly worth it if you need it.”

How much does a landlord insurance policy cost?

Many variables go into pricing a dwelling policy for landlords, but according to Melissa Neis, vice president of Chicago-based Parr Insurance Brokerage, it will probably cost between 20 percent and 30 percent more than a typical homeowner policy.

“That’s because the insurer is taking on more risk,” Neis says.

According to a 2016 study by the National Association of Insurance Commissioners, the average homeowners insurance premium across the United States in 2013 (the most recent data available) was $1,096. So a landlord policy will cost between $220 and $330 more per year than a traditional homeowners policy.

Important to note: No matter what type of dwelling policy you purchase, it will not cover the possessions of your renter (such as clothes, electronics or furniture.) Neis suggests landlords require tenants to carry renters insurance, which will protect you against a potential lawsuit if a tenant’s possessions are destroyed.

Source: huffingtonpost.com

10 Rental Property Tax Deductions Landlords Love: Did You Take Them All?

Whether you rent out a place or room to a tenant full time or just for a few weeks while you’re away on vacation, you already know it’s a great way to make money. But did you know it can also save you cash at tax time? That’s right, being even a part-time landlord For-Rent-Landlord-Tenant-Investment-300x300comes with tons of rental property tax deductions you’ll want to take advantage of. Pass them up, and you’re essentially throwing wads of moolah out the window.

“You could be losing hundreds, if not thousands, of dollars in deductions,” says St. Petersburg, FL, Realtor® Lisa Cahill, a CPA and former tax manager.

One caveat, though: If you rent out part or all of your primary residence to others for fewer than 15 days out of the year, you can’t deduct any expenses. But on the other hand, you don’t have to report the money as rental income (meaning it’s tax-free).

However, if you rented out all or part of your home for 15 days or more in 2016, make sure you claim these tax deductions from Uncle Sam when you file before the deadline this year.

1. Rental service fees

If you found a tenant using a rental or home-sharing service like Airbnb, VRBO, or HomeAway, you paid the company a fee. Airbnb, for example, takes a 3% cut of whatever guests pay. But guess what? You can deduct that (annoying) fee as a business expense.

“Any fees that you paid directly as the host are tax-deductible,” says Lisa Greene-Lewis, CPA and tax expert at TurboTax. This is true even if it came off the top and never hit your bank account. In addition to this fee, you can deduct value-added tax, which may have been taken off the top, too.

2. Advertising fees

If you had trouble finding a renter, you may have paid for advertising outside of what was offered by the rental service. If so, that money is tax-deductible. Roommate-matching websites like Roommates.com, for instance, charge hosts a fee in order to read messages received from other members. (A 30-day membership is $20.)

3. Utilities

Yes, your electric, heating, and water bills are also deductible, even if you live with your tenant. In the latter case, you’d just deduct a portion.

“How much you can deduct is based on the square footage of the space you rent out,” explains Greene-Lewis. So if a tenant is renting 1,500 square feet of the total 4,500 square feet, including living quarters and common areas, you’re allowed to deduct for one-third (1,500/4,500) of the utilities that you paid.

Tax deductions for vacation homes, meanwhile, are based on how many days the house is rented out compared with how many days you used it personally. For example, if the house is rented out for 90 days and used personally for 30 days a year for a total of 120 days, then you would be able to deduct 75% (90/120) of the utility costs.

4. Cleaning, gardening, and maintenance

“Whether you clean the house yourself or pay a professional cleaning service, the money is tax-deductible,” says Greene-Lewis. This includes cleaning supplies, which can add up, as well as gardening, lawn mowing, and other maintenance fees.

5. Repairs and painting

“If you have a handyman come to repair a window or repaint a room, those costs are deductible,” says Cahill. If you rent out a room in a home you live in and pay for whole-house maintenance, such as a furnace tuneup or a roof replacement, a part of that cost will be deductible as well, depending on the square footage devoted to your rental.

6. Property taxes

Property taxes work the same way: You can write off the portion of your property taxes equal to the portion of your home being rented out. These can be deducted either as personal expenses on Schedule A or deducted as rental expenses, says Cahill. (Here’s help on how to calculate your property taxes.)

7. Property insurance

If you need to pay more insurance on your home because you have renters present, you can deduct the extra cost. And even if your property insurance fees haven’t increased, you can still write off a portion of the expense as a business expense.

8. Furniture, linens, and food

If you buy new furniture for the space being rented out or provide renters with household items such as linens, curtains, and shower supplies, you can claim a tax deduction for those costs. Ditto for any food or drinks that you provide guests.

9. Municipality services

Some expenses paid to the local government, such as fees for trash and snow removal, are also tax-deductible.

10. Structural improvements

You can deduct the cost—or the interest paid on a loan, if you don’t pay cash—of structural improvements (like new roofing) made to the property if they apply to the rented area. (Depending on the project, you may also be able to snag a home improvement deduction.) However, these costs will need to be depreciated over time—meaning you won’t get all of the money back upfront, but will have to divvy it up over the life of the loan.

 

Source: realtor.com

Welcome to North Carolina!

1

On November 21, 1789, North Carolina ratified the Constitution to become the twelfth state. The vote came approximately two hundred years after the first settlers arrived on the Atlantic coastal plain.
#ThisDayInHistory #NorthCarolina #CaryNC