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Steps to Ending a Lease With Your Tenant

End a Lease

Steps to End a Lease

If you are a landlord, there are many reasons why you may want to end a lease with a renter as the end of the term approaches. If you want to do so, it is important that you take certain steps in order to make certain you are better able to legally protect yourself. You’ll also want to do so in a way that provides your renter enough time to secure other housing so that you part on good terms.

Reasons Why Landlords Sometimes Want to End Leases

Besides a tenant who violates the terms of their lease, there are other situations that may arise that make you wish to choose nonrenewal at the end of a lease. In some cases, a landlord may want to complete significant renovations and updates to improve the value of the home. They may also want to place the house on the market free from a tenancy so that a purchasing family can move into it. In other cases, a landlord may have fallen behind on their home mortgage payments for the rental property and have a need to make certain it is empty due to an impending foreclosure or short sale. Whatever the reason may be, it is important to clearly communicate your intention to terminate the lease when it expires with your tenant well in advance of that date.

Ways to Legally Protect Yourself When Not Renewing a Lease

Before a lease ever begins, it is important that you have a move-in checklist for the renter to complete with you while you do the initial walkthrough. It may also be smart for you to have date-stamped photographs or video clearly showing the condition of the property before the tenancy begins. If the lessee later does damage when you terminate the lease, you can use both the move-in and move-out checklists along with your video and photographic evidence to support your withholding a sufficient amount from their security deposit to complete needed repairs.

Most states also require landlords to provide lessees with written notice letting them know that you do not intend to renew their leases when they expire. While some states only require a 30-day notice, others require 60 days. Even if you are in a state that requires just a 30-day notice, it’s still a good idea to give your renter at least 60 days of notice that you will not be renewing the lease. This notice should always be in letter form, and it may also be smart to mail it by certified mail. This will give them more time to find other housing and reduce the chance they will stay after the lease ends. It is also a good idea to provide letters of reference and let your lessee know that you will be happy to provide a rental reference for them.

Taking the proper steps to make certain that you are legally protected when you want to terminate a lease with your lessee is smart. Doing so can help you to prevent a host of problems and a potential need to go through a court eviction procedure for a holdover tenant.

 

Top Cities to Rent in 2016

Sunset over City of Seattle

Sunset Over City of Seattle

  1. New York City, NY:
    If you want to buy a home in New York City, you will need a lot of money to spend. The average mortgage in Manhattan is about $1.3M. A property manager or landlord can help you find the right place to rent instead that won’t break your budget.
    2. San Diego, CA:
    San Diego is a great place to live but the average mortgage is about $477,000. Rent in San Diego is about $2,300 per month. If you want to enjoy the sunshine in this incredible city, considering renting your next new home.3. Washington D.C:
    The difference between owning and renting a home in Washington D.C. is pretty dramatic. A mortgage in the nation’s capital averages $359,700 while rent averages $1,098. Talk to a property manager and see what the city has to offer in rental property amenities and benefits.

    4. Los Angeles, CA:
    Los Angeles may be the City of Angels, but it cost money to live there. A typical mortgage will average $536,000 while rental housing averages about $2,500 per month. It has a lot of benefits and great attractions as well as many rental homes.

    5. Seattle, WA:
    The Emerald city is a very desirable location for jobs and lifestyle, but the average mortgage is $450,000 while rental housing can average about $1,200 per month. Talk to a local landlord and you might just find there are a number of benefits to renting.

    6. San Francisco, CA:
    The City by the Bay is a picture perfect location, but be ready to spend heavily to own a home. The average mortgage is $800,000 while rental housing is around $3,000 per month. The city has a lot to offer and rentals can help.

    7. Memphis, TN:
    Although not considered a major metropolitan city, The city of Memphis is more rental housing friendly. The average mortgage in Memphis averages $150,000 while the average rent will run approximately $750. This is a great place to live, but rental housing can help you go farther.

    8. Fort Worth, TX:
    If you have ever considered living in Texas, take a look at the rental housing in the city. The average mortgage in Fort Worth is $175,000 while a typical rent will average about $800. There are a number of rental homes available in Fort Worth.

    9. Portland, OR:
    The City of Roses is a beautiful place to live with lots of recreation and culture, but you will have to pay out to own a home in the city. The average mortgage in Portland is $250,000 while rental housing averages about $1,200 per month.

    10.Albuquerque, NM:
    If the southwest has always intrigued you, you can find lots to be excited about. But when it comes to cost of living, the average mortgage in Albuquerque will run about $150,000 while the average rent is roughly $600 per month. Contact a property manager for details.

 

How to Handle Bothersome Tenants

How to deal with Bothersome Tenants

How to deal with Bothersome Tenants

Unfortunately, almost every long-term landlord is going to deal with bothersome tenants at some point. While proper screening should help you weed out some of the worst offenders, it is vital that you understand all landlord laws and how they could affect you in the coming years. Here is a closer look at some tips that you can use to deal with bothersome tenants and what tenant laws you should know about before renting.

Keep Your Emotions Out of It
Due to the nature of the rental industry, it is quite easy to allow emotions to take over when dealing with a tenant. Those that leave their emotions out of it, however, might never have to rely on tenant and landlord laws at all. If you ever feel as if one party is becoming angry over a particular issue, then you should try to take a step back and approach the situation from a different angle. This might include taking a day off to collect your thoughts or carrying out the interactions through emails.

Document Everything
No matter what type of communication method you decide on, it is vital that you document all requests. This includes any requests that do not fall within tenant laws and will not be fulfilled. For many landlords, the easiest way to document these requests is to have them submitted by email. This will not only provide you with a permanent copy of the request, but it will also give you the date and time that the request was submitted.

Lead by Example
Another way to make this process as stress-free as possible is to lead by example. This includes sticking to your word and following through with any home repairs or replacements that you have agreed to. Issues such as failing to complete the work, showing up late, or not showing up at all will set the tone for all future interactions. Sticking to your word will also provide you with an additional layer of legal protection should these issues turn into a civil case.

Determining Legality
Completely ignoring these requests is not only a bad business practice, but it can also be illegal. Landlords are required by law to provide a tenant with a safe and functioning living space. That being said, you are not required to fulfill every request that is made. As a general rule, a landlord must maintain a home and make replacements or repairs after typical wear and tear. If the tenants damage your property, however, then they will be responsible for repairs or replacements.

Handling Invalid Requests
Even if you do not plan on fulfilling a request, it is important that you respond to the tenant. The best way to go about this is to clearly state that you will not be fulfilling the request and then directing them to your lease agreement, rental agreement, or the pertinent law. You should also keep a copy of the official request for as long as they remain a tenant. Verbal requests must be avoided at all costs, and landlords should ask their tenants to write down the information, sign it, and date the document.

 

How Long Should a Landlord Keep Tenant Documents?

How Long Should a Landlord Keep Tenant Documents

How Long Should a Landlord Keep Tenant Documents

When a landlord rents an apartment to a tenant, he or she wants to know that the tenant can pay the rent and their property will be maintained. To verify that this is possible, a landlord may do a background check, a credit check, an employment check, and a previous landlord reference check. The landlord may also verify that a potential tenant is actually employed or has a source of income. How long should these documents be kept on file?

Keep Them Until you’re No Longer Liable

The easy answer is that you should keep the documents until you are no longer liable in a potential criminal or civil suit. For instance, if a potential tenant claims that you performed a credit or background check without their authorization, you can use the rental application as proof that the applicant knew that getting the apartment was contingent on such a check taking place. State law dictates how much time an applicant or tenant has to file a civil suit, which is generally between two and four years depending on whether there was a verbal or written agreement between the parties.

Are You At Risk for Being Audited?

Keeping a rental application on file may be helpful in the event of a state or federal tax audit. The application may help establish how many tenants a landlord had in a given year and when they moved in. It may also help to verify when rent was paid, which may play a role in when the money has to be reported for tax purposes. In general, the IRS can audit a tax return for up to six years or longer if they suspect fraud.

Was There Ever a Tenant-Landlord Agreement?

Keeping a rental application is important in establishing that there is a landlord-tenant relationship. If there is no such relationship, landlord laws do not apply, but it may be harder to collect rent or other fees or get someone to leave your home. Paperwork establishing that a landlord and tenant had a formal relationship as such should be kept until any disputes regarding rent, living conditions or how to deal with a security deposit that a tenant may want back.

Landlords should keep any information that verifies that they have a valid lease or have acted in accordance with landlord laws. These records should be kept until any relevant statute of limitations has run out for civil action from a tenant or an audit from the government. As a best practice for confidential data security, sensitive records should be kept in a secure location such as a locking filing cabinet or a password protected file on your computer until they are destroyed.

 

Tax Requirements for Landlords

tax time

taxes for landlords

Investing in real estate or rental properties offers both tax incentives and favorable tax rules that are not available in other types of investments. As with most of the tax code, filing and taking full advantage of these tax breaks can be a bit challenging. Here are the top 10 tax deductions for the upcoming 2016 filing season as well as a breakdown of the tax forms required.

Top 10 tax deductions for rental properties

1. Mortgage Interest
Whether a homeowner is a property manager or resident, mortgage interest is likely to be the largest deductible expense. Landlords can deduct interest on mortgage loans used to purchase or repair a property, and even credit card interest if the expense is for goods and services related to the property upkeep or maintenance.

2. Real Estate Taxes
Real estate taxes are often paid through the mortgage company and are delivered to the owner on the Form 1098. There are also tax deductions available for permit fees, personal property taxes, and wage taxes that all relate to the property.

3. Passive Losses or Passive Activity Losses (PAL)
Most properties provide passive losses early in their investment as the cost of acquisition, setup, and repairs often outweigh the income. While these losses are deductible, passive income from other sources or properties needs to be considered. Landlords should consult a tax advisor when determining the PAL impact for tax filings.

4. Utilities
Landlords can deduct the cost of any utilities that are not paid by the tenants. These deductions include gas, heating oil, electricity, water, and trash removal.

5. Insurance
All insurance premiums that relate to the business of running or owning the property are deductible. General liability and personal umbrella insurance can be costly for a rental property, so this is a good way to recoup a portion of that expense.

6. Repairs
Any work that extends the life of a property or increases its value is an eligible deduction, but the expense must be depreciated over multiple years. A general rule of thumb states that any expense that exceeds one hundred dollars is deductible.

7. Depreciation
The total cost of a rental property is not fully deductible in the year in which it was purchased. Landlords get to deduct a portion of the cost spread out over several years.

8. Association Fees
Homeowners’ association, resort or condo fees are fully tax deductible.

9. Traveling and Mileage
Property managers and landlords are entitled to deduct travel expenses if they drive while performing the rental activity. There are two options:
• Deduct the actual or realized traveling expenses (upkeep, gas, repairs, etc.)
• Or use the IRS’ standard mileage rate. Using the standard mileage rate has some restrictions and limitations so; it’s advised that property managers consult a tax specialist

10. Legal and Professional Fees
Any fees paid to an attorney, property manager, or tax accountant are fully deductible as long as they relate directly to the rental property.

Filing Landlord Taxes

The ownership structure of the property drives the tax forms to be used when filing.

• Individuals should file IRS Schedule E to report income and expenses associated with landlord taxes.

• Properties owned by more than one individual also use Schedule E and identify the appropriate owner percentage when declaring the income and expenses.

• Individuals who own properties through some form of business entity must file IRS Form 8825.

• Partnerships and Limited Partnerships must file using Form 1065. The partnership must also provide partners with a separate IRS Schedule K-1 listing the partner’s share of ownership of the income and expenses.

• S Corporations owning real estate property file returns with IRS Form 1120S.
Limited Liability Companies (LLC’s) are a sole proprietorship for tax reporting and must report income and deductions on Schedule E of the partners’ individual tax forms.

Considering the complexity, multiple deductions, and various tax forms, a property manager or landlord would do well to consult a professional, keeping in mind that the fees associated with the consultation would be tax deductible.

 

Should you be a Landlord or Hire a Property Manager?

Shoud you be a Landlord or Hire a Property Manager

Should you be a Landlord or Hire a Property Manager

Managing a property can be a big headache for any landlord. It’s a lot of responsibility and work to deal with on a daily basis. Hiring a property manager can lift a huge weight from a landlord’s shoulders, but it’s not for everyone. It’s important to understand which situations call for hiring a manager and which ones would benefit most from the owner remaining as the landlord.

What are Landlords?

Landlords are owners of buildings that are rented out to one or numerous tenants. The renters in question can be either residential or businesses. According to most renting contracts, landlords are typically responsible for building and other property maintenance such as painting, patching up cracks in the walls and maintaining the plumbing. They are also responsible for making any major repairs to the land or building as needed, and they collect rent on a monthly basis.

What are Property Managers?

Property managers are third parties that landlords hire to do the technical work around the building. They are responsible for doing the regular maintenance for the building, collecting rent, advertising the location, finding potential tenants, going through tenant screening and a criminal background check, preparing leases and rental contracts, making repairs and dealing with eviction issues such as performing an eviction search if it is necessary. In these situations, landlords are essentially just the owners of the property who receive rent, pay for any materials needed for maintenance and repairs, pay their property managers and may make the final decision on potential tenants

When It Might Be Better to Remain as a Landlord

Many landlords simply don’t have the extra money to pay for property managers. If you’re perfectly capable of managing a property and don’t have excess money to spend, hiring a manager is probably not a good option for you.

Staying as the lessor on your property also allows you to avoid the complications of being an employer. Property managers are your employees, meaning that you’ll have to deal with things like payroll, insurance, legal matters and tax issues when you hire one.

Remaining as the lessor of your building also allows you to be more involved with the property and the tenants. You know exactly who’s living there, how they usually behave and you can judge for yourself whether someone should be evicted. You’ll also know exactly what needs to be done around the property and how to handle it as well as ensuring that the maintenance and repairs are done to your standards.

When You Should Consider Hiring a Property Manager

One of the biggest deciding factors in hiring a manager for your building is if you’re not capable or qualified to handle the responsibilities on your own. Regular land and building maintenance and repairs can be complicated tasks requiring skills in various areas. Good property managers will have plenty of skills and experience to keep your land and building looking great and functioning well.

They are not only trained in matters of maintenance and repair, but they are very knowledgeable in tenant screening. It’s not just about finding nice people and handing them the keys. A good property manager will carry out a full criminal background check and security checks, pull credit reports, analyze references from previous landlords and verify employment. If a tenant is problematic, they also carry out a full eviction search for you.

If you live too far away from your property to effectively manage it yourself, it may be best to hire a manager. Spending a lot of time and gas money merely to get to your property might not be worth it.

Likewise, if you don’t have the time to effectively manage the property due to family, work or other more important matters, property managers can take a great deal of the workload and stress from you.

 

The Free Ways to market your Rental Property

The Free Ways to market your Rental Property

The Free Ways to Market your Rental Property

Owning a rental property is a great way to bring in income and build wealth. However, your rental property isn’t worth much to you at all if you don’t have tenants. In a competitive renting landscape, finding quality tenants who will pass a tenant screening can be a challenge, especially for those who are new to property management and ownership. If you want to ensure that you find tenants in a prompt manner, it’s a good idea to advertise your property across multiple platforms. Here are some free options that will allow you to post multiple ads without spending a fortune.

Craigslist

Craigslist is king when it comes to advertising apartments and rentals. It’s the first place that most people look when they are in the market for a new rental. Craigslist is comparatively unregulated and unmoderated, so create a high quality advertisement that features clear photographs and a descriptive, well-written text. It will help you to stand out from other ads.

Zillow

Zillow is designed both for sale and rental properties. It’s a popular choice for just about anyone looking for a home. One of the key tips for success on Zillow is to leave no detail out when you are creating your listing. Zillow allows potential renters to narrow their search criteria to meet their exact needs, so make sure that your profile is thorough.

Trulia

Trulia is quite similar to Zillow and has a similar reputation for quality and specific ads, although Trulia is the somewhat more popular option in large cities and metropolitans. Similar to Zillow, create ads that feature lots of details and multiple clear photographs to ensure success.

By using these free sites, you can advertise your rental across several platforms without spending a fortune. Before you know it, you’ll be conducing the tenant screening and well on your way to signing a contract with your new renter.

 

2016 Make it your Best Property Management Year Ever!

2016 Make it your Best Property Management Year Ever!

2016 Make it your Best Property Management Year Ever!

Being a landlord or property manager can come with its own set of challenges, however, 2016 is the year you can turn everything around in your favor. If you are someone who leases your property, you know that it can be very difficult to not only manage the financial aspect of the business but also the property itself. Luckily, there are many ways to manage both time and money, make sure that the potential tenants are happy with the property and increase profits.

Reduce Expenses

The first and most important part of making the best of 2016 is making sure the finances are in order. Reducing expenses can be a great way to free up some extra money. Finding more efficient ways of taking care of the property or easier ways to take care of all of the amenities involved will help accomplish this goal.

Screen Tenants

This is one of the most important parts of renting. Tenant screening is a good way to safeguard against disaster. If you are a renter, you know that tenant screening can be a great way to see who is fit for renting to. Potential tenants who have had a bad payment or criminal history can be a liability and can cause damage to your business and your property.

Winterize

Winterizing can be a very important tool in a property manager’s arsenal. Making sure that the property you are renting is nice and warm in winter can be a big draw for potential tenants. Winterizing will help increase your business and make sure everyone is comfortable in their rented property.

Tax Preparation

Very few people enjoy doing taxes. However, as the owner of a business, especially one that deals with other people and property, it is important to have your taxes in line and make sure you are squared away with all governmental agencies. Preparation ahead of time can reduce the headaches often associated with taxes.

Paperwork Organization

Organization goes hand in hand with tax preparation. Disorganization can be a costly and dangerous habit to fall into and can lead to many problems. It is important to have all important paperwork organized so that it can be grabbed at a moment’s notice or referenced. All of these tips will help reduce stress and make 2016 a great year to be a property manager!

What’s New in Social: Property Management

What’s New in Social Property Management

What’s New in Social: Property Management

The way in which people do business has been revolutionized by the digital world. In today’s business environment, social network plays a big part in promoting agencies and promoting products and services. Social media marketing has helped companies make more personal connection with people. However, in the property management business, property managers hardly try to get a client referral from Facebook or twitter. Social media has been criticized that it hardly benefits branding in property management. What these property managers don’t know is that social media is not just about branding the property business. It is actually more about strengthening communication with the clients, building relationships and sharing information. When a property manager joins the social media community, it is easier to connect with a tenant, residents, a landlord, owners and potential clients.

Why property managers would benefit from using social network?

Gain a competitive advantage

A property manager doesn’t need a huge budget to create a social network presence. To keep it updated, a property manager only needs a few minutes every day. It helps you gain better competitive advantage against your competitors from the social network activities. It doesn’t matter the size of the property business but social network aps definitely provides platforms to engage and meet new clients.

Market your business

Social network gives the landlord an opportunity to market his/her rental houses. You get a chance to communicate with a current and potential tenant. It is easier to address issues on social network. For instance, a tenant can post comments about his/her experience and can also report any issues about the property to enable a quick action to be taken. Facebook and Twitter are great apps to spread the word about the rental business even without making sales.

Provide quick customer service

Property managers are better off when interacting with their customers on social network because it helps them to listen and reply to their questions and concerns in the real-time. The idea is to provide quick customer service in order to advice or expedite help to the tenants.

Share information

Social network is the best place to share information. Property managers can share information about the industry news, tenancy agreement laws, and advice on industry topics. One of the way to socialize with people is through sharing information to improve the credibility of the business. Sharing the industry information improves the credibility of the business.

Social network apps

Property management professionals need to innovative ways to connect with clients and generate business through social network. There are various apps which may help property managers achieve their social network goals.

Instagram

Recently, Instagram opened up ad offering to business of all types and sizes. Property managers can take advantage of this channel to target potential clients through targeting specific interests and generate qualified leads. This would work well using photos targeting interested people.

Facebook for Business

Facebook has great features and pages with which property managers can increase efficiency when communicating with audiences. The recent updates on the Facebook app is intended to add more touch points for customers. Property managers can utilize these new features to create ads and keep in touch with clients.

LinkedIn direct messages

LinkedIn direct messaging experience has created a more relaxed way to connect with multifamily industry professionals in the property markets. It support back and forth communication and connections. The update has also included an email notification, group messaging option, chat-style interface and emoji’s.

Twitter

Twitter is an easy way to socialize with professionals and different people interested in property market. Twitter is both on PCs and mobile phones and has provided users including the property managers with great user interface to share content and engage in their audiences through business pages and individual pages. Since social network sites makes improvement based on individual preferences, property managers can take advantage of this trend to categorize users to get more prospects.

 

 

2016 Rental Forecast by the Numbers

2016 Rental Forecast by the Numbers

2016 Rental Forecast by the Numbers

What Will Rental Industry Look Like in 2016?

Since the real estate collapse a few years back, the idea of home ownership went to the wayside for a lot of people. Because of that, the rental industry will be on the rise through next year by an average of 8%, with single family homes being the largest rental alternative choice. Rental prices, however, have been on the rise due to an increase in the demand for rentals and not much available inventory for qualified tenants who can pass the tenant screening.

The greatest rental housing growth will include rentals in the single-family rental sector for the major institutional investors, being simultaneously present in multiple cities and states. These investors are targeting areas with harsh downturn through the housing crisis, and are now setting their sights on areas like Las Vegas, Nevada, Arizona, and Florida. With approximately 13.5 million vacant homes currently on the market, the rental industry for homes will be on the rise between 2% and 4% nationally over the next two to three years, providing a wide market of availability in a diverse assortment of locales and neighborhoods.

In the second quarter of 2015, vacancy rates dropped to 6.8%, marking a 20-year low, and with home ownership dropping to historic low levels, landlords truly do not have any need or incentive to lower their rental prices going into a new year. A 4% hike in rental rates is predicted for 2016, with the demand for rental housing expecting to grow by approximately 6.6 million units throughout the year, with 4.2 million renters entering the rental industry over the next decade.

It does remain cheaper to rent than to buy, however, by about 38% on a national basis. The vacancy rates for apartments are predicted to rise to about 5% in 2016, and then again to 5.3% in 2017. Despite increasing rental rates, renters can use the knowledge that rental prices can vary greatly, making it easy to research whether or not an apartment is fairly priced and giving the renter some negotiating power before signing a lease.

Instead of trying to sell a home at a lower price just to get it to sell, now would be a great time to engage some stringent tenant screening processes and rent out a vacant home while the demand is strong, and on the rise. Renting an apartment or a home will remain a more attractive option for those consumers who do not have the credit or confidence needed to buy. In the United States, multifamily rent growth is expected to reach 4.6% in the fourth quarter of 2016.

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StarPoint Tenant Screening
520 East Zaragoza
Pensacola, FL 32502

Ph: 850-262-0002
Toll Free: 877-330-2444
Fax: 877-349-2175

info@starpointscreening.com