Property managers and rental property management companies should help owners and investors improve their return on investment with every action they take with the owner’s properties. A prudent property manager will make suggestions on improving the exterior of the house with cost effective suggestions. Improvements will help retain existing tenants and will make the property much easier to rent if vacant. If your existing manager doesn’t make these types of suggestions maybe it’s time to look for a new property management company. The following is a list of six (6) easy and cost effective exterior improvements.
First impressions matter immensely, thus a property owner should never neglect their investment property’s landscaping.
A real estate agent who is getting a property ready for sale spends time, energy and effort making the most of a property’s curb appeal to entice a potential buyer to buy for the highest possible price. A rule of thumb is that a realtor who invests $1 dollar of curb appeal improvements will gain their clients $3 of return at close of escrow.
In the same vein, a property manager should counsel his clients to invest some time, energy and effort in sprucing up their rental property exterior landscaping to help attract more potential renters or keep the ones they have. The art of providing just enough curb appeal, just the right balance of attractive landscaping, while maintaining a fixed maintenance budget can be achieved through education, experience, and common sense. Experienced property managers should be able to put together a plan for their owners at no additional expense.
Investment Property Tax Deductions and Tax Strategies for Real Estate Professionals
The cost of hiring a property management company to handle investment properties is significantly less than most property owners believe. Investment property owners who manage their own property with the idea that property management costs are too much might be mistaken as to the actual real costs. Additionally, a large percentage of property owners do not take advantage of all of the tax strategies available to them.
For example, if a property owner manages their investment portfolio out of their home office there may be some business related items they are not expensing. Interest in all forms including mortgage interest, equity lines of credit interest, and any business loan interest are all expenses which are typically deductible. Losses like casualties, disasters, and thefts are expenses which properly accounted for are deductible.
Fair housing laws were implemented in the U.S. during the Lyndon Johnson Administration of the 1960s to help prevent discrimination towards minority and underrepresented groups in housing or renting. Some fifty years later we are still faced with it on a daily basis.
According to recent data there were close to 30,000 housing discrimination complaints filed in the U.S. in 2012, which is an increase of nearly 5% from 2011. As a property manager or a property management company it is paramount to understand these basic fundamental laws to avoid any violation and potential liability for you and the property owner.
During winter and rainy months property manager and professional property management companies need to be mindful of potential water intrusion problems with each and every property in their portfolio. Many buildings start leaking right after construction, but do not manifest the water intrusion and building damage until years after the leakage has started. Water intrusion can lead to structural damage, rot, mold, termite, sick building syndrome and eventually significant mitigation repair costs.
A prudent property manager will spend time during periodic inspections of the property to help prevent these issues from occurring and also ferreting out any existing and ongoing issues. A property owner should expect nothing less from their property manager.
A California law enacted in 2009 is finally taking effect and causing concerns among property owners, sellers, buyers, and realtors.
California Civil Code Section 1101.4 requires owners of single-family residences which were “built or available for use on or before January 1, 1994” which will be altered or improved on or after January 1, 2014 to install water-conserving plumbing fixtures only when the existing plumbing fixtures are “non-compliant” by certain dates specified below.
A noncompliant plumbing fixture is defined by California Civil Code Sec. 1101.3 as:
The Conundrum of Investment Properties
Investors seeking diversification have frequently turned to a rental property or a collection of rental properties to even out and spread risk across their investment portfolios. As with any investment people should consider all of the issues, problems, and pitfalls along with the potential returns.
Unfortunately, a lot of investors aren’t aware of the potential problems and do not take the time to investigate these issues before they close escrow. A property management course and a course in basic real estate investment would be great investments of time for someone considering rental properties as a source of investment income and long-term investment. Some of the problems and concerns are discussed below.
Property managers, or rental owners who manage properties on their own, who fail to take the necessary precautions when screening tenants are asking for headaches and potentially long down time for their rental properties. Cutting corners in this process is a nightmare waiting to happen which will only increase the amount of time one will spend in pursuit of quality long-term tenants and diminish overall return on investment for the portfolio.
Today, background check screening software available from a professional property manager can quickly and accurately paint the prospective tenant’s employment background, criminal record (if any), eviction record (if any), and credit history. Without using a professional property manager to help in this process is like dancing on a tightrope which could lead to problems.
In addition to having one’s own list of construction trade vendors professional property managers get bombarded with numerous requests by their clients for the names of contractors; floor guys, cabinet guys, tile guys, plumbers, electricians, handymen, etc.
Before a true professional property manager refers any contractors or any vendors to their clients it is important to make sure you know who they are. Property managers and property management companies should seriously consider asking the following simple but extremely important questions below before referring contractors or vendors to their clients, or even before hiring them to do work on their clients’ properties.
California multi-family rental home owners and property managers need to be educated about appropriate ‘Signage’ for their properties. The following is a concise list of typical signage at multi-family buildings, rental properties, and neighborhoods.
Responsible Person (At Property) Signage
For 4-15 unit residential properties, if the home owner does not live on-site, a sign must be posted showing the name and address of the property “responsible person”. California Code of Regulations Title 25, Section 42 reads in pertinent part, a supervisor, a manager, a janitor, a housekeeper, or other responsible individual shall live upon the premises and shall have charge of every apartment building in which there are 16 or more apartment houses, and of every hotel in which there are 12 or even more visitor rooms, in the event that the owner of any such apartment house does not live on the premises.