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Section 32 provides all the attachments. Then there’s the signature area. You date and sign it. All parties must sign the lease. If you have three tenants, all three tenants sign.
You don’t want to get into an argument with the judge later saying, “I understand you put three up front, but only two signed it so those are the only two I’m going to allow you to go after.” Don’t do that. Continue reading ‘Residential Property Management – How to Strengthen Your Lease Agreement With Addendums’ »
Maintenance is an important area, particularly if you’re new in the business. This is an area where I see a lot of mistakes being made by investors.
I spend a lot of our time in our property management business time coming in for new investors fixing or trying to overcome some of their maintenance issues and problems, particularly if they’ve done rehab. If they’re new in the business, maybe the contractor takes advantage of them and overcharges them or doesn’t do enough or too much. We see this all the time. Continue reading ‘Why You Should Check References When Choosing a Maintenance Contractor’ »
Tax accounting
We’re going to talk about that real quick. We talked already about cash or accrual. You have to pick one and go with it. If you file an individual tax return and you own the properties in your individual name, you are most likely going to be filing a Schedule E. That is where you would itemize your income and expenses. Then it would flow through to your normal tax return as either passive income or passive loss, depending on the situation.
If you have an LLC you’re going to file a Schedule 8825. Basically it’s the same form, but it would be a part of your LLC schedules. Continue reading ‘Residential Property Management – Tax Account Tips and Strategies’ »
We are going to talk about financial reporting or how to handle your cash, keep accurate accounting records, and tax issues.
Financial Reporting
The whole accounting issue is an important area. It’s one that if you make some mistakes it can really cost you, particularly if you were to do something wrong in terms of tax returns. There could be some real implications here if not done properly.
What I want to do – what the whole course is designed to do – is to upgrade you guys. If you’re already managing a few small properties, I want to upgrade you to a more professional standard. Continue reading ‘Residential Property Management – How to Handle Your Cash and Keep Accurate Accounting Records’ »
One of the things small owners may want to consider and is really a pretty good idea is what they call these home warranty programs. These programs are basically insurance that cost $400 to $500 per year and you essentially insure your entire house.
There is a deductible and if something breaks and the warranty people have to come out and inspect or repair it, you’re only charged $50 or $60 typically. That’s your exposure. If it costs them more to fix it, then they have to pay it. You’ve bought insurance above that. They work fairly well. Some of them work better than others, but for the most part they work fairly well. Continue reading ‘Learn How to Cap Your Maintenance Costs at Only $400 Per Year’ »
Structurally how do you set up your accounting or your financial model? In my business we have four primary accounts. I’m going to go through each one of them.
Operating Account
We have a primary operating account. That is where the rent money comes in and the bills and expenses are paid from. That is your fairly traditional checking account statement. We try to reconcile that account at least once a week, if not two or three times. Early in the month when all the rents are coming in we reconcile that a lot. Continue reading ‘Residential Property Management – How to Set Up Your Cash Management System’ »