I have a rental property at a ski resort managed as a nightly rental during the winter months and a monthly rental the rest of the year. Over the years, hassles have been few. The property has appreciated nicely. Some years cash flow is positive and some years it’s negative - overall it breaks even. The main two lessons learned have to do with cleaning and revenues. (more…)
Author Archive
Lessons learned from Managing a Vacation Rental Property
Saturday, November 3rd, 2007Tax Consequences of Selling a Rental Property, Part 1
Saturday, October 27th, 2007Whether you are considering buying an investment property, or you have many in your portfolio, understanding the tax implications of selling rentals can save thousands of dollars.
When you sell an investment property you pay capital gains tax on the amount you profited and on the depreciation you took. Below is a simple format for calculating your taxable amounts. First you find out your cost basis-
(more…)
The Cost of Selling a Rental House
Wednesday, October 24th, 2007If you own rental houses or are thinking of buying a rental house it pays to consider your future selling costs. These costs can vary significantly depending on how you sell, when you sell, and what you do with the money.
We’ll start with seller’s closing costs. The big three are typically sales commissions, county taxes, and title insurance fees. I just sold a house for $290,000. I paid $4451 to the county as transfer taxes and I paid $1323 for title related fees. No real estate agents were involved so fortunately I avoided paying $17,000+ in commissions. As you can see these costs can put a large dent in your profits. They vary depending on the property location. Contact your local title company to identify the costs in your area. (more…)
Investment Property Owners Should Consider Expanding Holdings
Thursday, October 18th, 2007We’ve all heard about the recent problems with mortgages referred to as subprime loans. The current and more importantly future defaults on these loans could push many homeowners into the rental market. In a nutshell, subprime loans are issued to borrowers with a low credit rating. (more…)
Property Managers - Make Sure You Have the Proper Licensing!!!
Friday, October 5th, 2007Property managers - pay close attention! In most states you need a real estate broker’s license to do property management. I don’t want to state the obvious, but I’m sometimes surprised by the companies out there who claim they don’t need a license. This doesn’t mean you can “borrow” a friend’s license number. I was an active attorney for a while. I couldn’t borrow another attorney’s license to practice law - and it’s the same for property managers. (more…)
Community Association Managers - How They Can Help Your Homeowners Association
Friday, September 14th, 2007The number of homeowner associations in the U.S. is on the rise, and more and more of them are seeking professional community association managers to help them handle the issues that can arise - expected and unexpected. Here are some of the things a homeowners association management company can do to help your association:
(more…)
What Does the Mortgage Crunch Mean For Property Owners
Friday, August 17th, 2007I’ve been trying to buy a new house in the last couple of weeks, and all I keep hearing about from the lenders I’ve been working with is how there are fewer options for loans because lenders are pulling some of their programs. I also hear that this probably won’t impact buyers with good credit who have some money saved for a down payment. (more…)
Audited by the Real Estate Commission!
Thursday, July 19th, 2007Well, All Property Management, LLC was audited by the Washington Real Estate Commission yesterday - and it wasn’t awful at all! I knew an audit was bound to happen sooner or later, but hadn’t expected it this soon (I just got my broker’s license in December 2006).
Just hearing the word “audit” sent a shock wave of adrenaline into my system when I got the call to head into the office because the auditor was on-site (it’s summer, and I was at home with my seven year old daughter) . Of course, to say I tend to worry a wee bit too much about things would be an understatement. That’s why I’m not a lawyer anymore. (more…)
THINGS TO THINK ABOUT WHEN HIRING A PROPERTY MANAGER
Wednesday, July 18th, 2007- Does the property management company have the property licensing? In most states, property managers must have, or be working under someone who has, a real estate broker’s license. The rules vary from state to state, but you can always call your local real estate commission (google “real estate commission” and the name of your state).
- Check the references of any property management company you are thinking of hiring. Call current clients - did they have a good response time, provide timely reports, do what they said they would do?
- Experience - how many years has the company been managing property? What types of properties have they been managing?
Creative Solution to Tenant Who Won’t Leave
Monday, May 21st, 2007Here’s creative solution to a tenant who just won’t leave from when I was practicing real estate law.
I had a client come to me who hadn’t been using a property manager. He had rented a small house to some tenants and he didn’t check references (how many times have I heard that!). By the time he came to me, the tenants had trashed the place, were 4 months behind in the rent AND they had ignored his notice to pay rent or vacate. I explained his options to him and after he considered the time, expense and hassle involved he decided to actually offer to PAY THEM to move out. He offered them about $300 (from what I remember) - and it worked - they moved out the next weekend. I think maybe it worked because they couldn’t afford to move - and they were able to use the money for the next place. (more…)
