Real Estate Blog

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’ »

One of the things you’re going to learn is always make sure you are behind the contractor in the amount of work. Let’s say the contractor does a $1,000 repair. What I suggest is that you only give that contract $200 or $300 to start.

Make sure he goes out and buys the supplies and all that stuff. He starts the work and gets about 50% done, so then in theory he’s done about $500 worth of work but you’ve only paid him $200-300. That’s fine. If he wants to wander off and go do something else and not show up on time you can get out of that and you haven’t lost any money. Continue reading ‘Learn the One Secret You Must Know to Prevent Being Burned by Maintenance Contractors’ »

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’ »

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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’ »

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’ »

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We have several balance sheet accounts. We have assets, cash, receivables – rent that’s not been paid but is due – supplies, pre-paid rent, the value of your building less accumulated depreciation, and then you have equipment. There are some other accounts that in theory you could put in here, but it’s really not required.

Liability Accounts

Then we have what are called liability accounts. These are your accounts payable. These include salaries payable, taxes payable – real estate or even income taxes. If you have a mortgage on your property, mortgage payments, you would set it up as a liability. Continue reading ‘Residential Property Management – How to Set Up a Chart of Accounts’ »

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