In recent years, emotional support animals (ESAs) have become an increasingly important part of the administrative tasks involved in managing a rental property. As more and more tenants bring ESAs onto the property, landlords need to become more aware of the emotional well-being of residents and the need for a structured and equitable ESA verification process.
This post covers the evolving landscape of ESA verification and explores how pet management software can revolutionize the verification process while ensuring fairness for all residents.
Understanding the Importance of Fairness
When it comes to support animals, fairness isn’t just a moral obligation; it’s a legal requirement. Treating all residents equally (whether they present with support animals or not) is important to ensure that everyone is offered equal opportunity to housing under the law. Federal guidelines provide clear and standardized procedures for ESA verification. Ultimately, these rules serve to benefit both residents and property managers by creating a level playing field and protecting landlords from potential legal disputes.
Fairness also has a tangible impact on resident satisfaction. When residents feel that their ESA requests are handled fairly and consistently, they are more likely to be content with their living situations. This, in turn, leads to a more harmonious community, reduced conflicts with management, and a more productive rental experience for everyone involved.
Respecting HUD Guidelines
The U.S. Department of Housing and Urban Development (HUD) plays a pivotal role in providing guidelines for ESA verification in rental properties. HUD’s guidelines are designed to ensure that individuals with disabilities have equal housing opportunities, including the right to keep an ESA in their homes. Property managers must adhere to these guidelines to both protect themselves from legal issues and promote equality among all residents.
A key aspect of HUD guidelines is recognizing the importance of emotional support animals in providing therapeutic benefits to individuals with disabilities. Property managers should accept reasonable accommodation requests from residents with disabilities and refrain from imposing unnecessary barriers. By understanding and implementing HUD guidelines, property managers can align their practices with federal regulations and maintain an environment of fairness and inclusivity within their rental properties.
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Confidentiality and Privacy
Respecting the privacy and confidentiality of all residents is an important part of the ESA verification process. This respect upholds ethical standards and protects against potential legal issues. Residents have a right to keep their ESA-related information private, and property managers should ensure that their application information and any related documentation are handled discreetly and securely.
During the verification process, any questions related to an individual disability should be avoided as they can infringe upon a resident’s right to privacy.
The Role of Pet Management Software in Ensuring Fairness
More and more property owners have chosen to invest in pet management software to ensure a fair and compliant ESA verification process. The right applications can streamline the entire process, reducing the burden on both residents and property staff. Additionally, many platforms offer several exceptional features right out of the box, such as centralized documentation storage, communication tools, and automation of administrative tasks. By providing property managers with a structured, consistent approach to ESA verification, pet management software minimizes the risk of discrimination and ensures that all residents are treated fairly and equally.
On popular application, OurPetPolicy, is a leading solution in helping property managers ensure fairness in ESA verification.
Bottom Line
The importance of following federal guidelines and ensuring fairness in the ESA verification process cannot be overstated. Ultimately, it’s up to property managers to implement approaches that allow for a more inclusive, transparent, and harmonious living environment for all residents while avoiding unnecessary legal complications.
That’s where ESA verification platforms can help. OurPetPolicy in particular is an ideal solution that allows landlords to confidently manage ESA accommodation requests while upholding the highest standards of fairness and compliance. Additionally, OurPetPolicy’s proprietary technology helps to streamline the verification process while also providing centralized documentation storage, resident communication channels, task automation, and many other useful features.
Take charge of your ESA verification process. Get started with OurPetPolicy today! If you let them know that Your Landlord Resource referred you, you will receive a discount of 75 cents off per pet each month they are managed! Doesn’t seem like much but as you add more pets, that adds up each month!
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You’ve asked yourself this before, and we all have. It’s the age-old question: Is a stack of cash today better than a steady but smaller stream of income?
Investors have struggled with this concept forever, and the BiggerPockets forums show evidence of that. Daily, investors post, wondering if cashing in their equity is the best play or if they should play the long game.
There truly isn’t a wrong answer, though I’ll admit, I am quite biased, especially after years of conversations with chronic flippers who are filled with regret about not having kept some of their projects.
A Look at BRRRR vs. Flipping
BRRRR and flips are really two sides of the same coin—the real estate investing coin. Of course, much of this is market- and property-specific, but the main differences are that with flips, you might spend a little more on higher-end finishes than you would a BRRRR.
Either way, you are forcing equity in your property and addressing deferred maintenance and upgrades in the hopes of profiting at some point. If you plan to flip and are in a B neighborhood, maybe you spring for the stone counters and tile accent wall in the bathroom. If you are going to rent in a B neighborhood, maybe those upgrades are unnecessary. Besides, if you rent the property for 10 years, you can always add those upgrades later if and when you decide to sell.
Yes, sure, the BRRRR, if done properly, will allow you a trickle of funds indefinitely, whereas a flip is once and done. However, at the end of the day, they’re both strategies for quick(er) cash and (hopefully) leverage. You are forcing equity and hoping to leverage that profit.
How to Decide
So, how do you decide to sell or keep the property? Here are some factors to consider.
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The Cash Flow
First, my rule of thumb is that an ideal BRRRR will have you all in at 75% or less of after-repair value (ARV). If you can create at least 25% equity, you should be able to refinance the property and get close to 100% of your money back out.
It doesn’t always mean that you should sell if you have less, but you will likely leave some of your own cash in the deal. I’ve done that many times before and been perfectly happy with the results—but I planned on this as a possibility going in. Some people won’t keep a property if they have to leave any cash in it. That’s not a dealbreaker for me, and unless you have unique circumstances, it shouldn’t be the only criteria you consider either.
If you can BRRRR a property and it will more than pay for itself every month, that’s a good start to deciding if you should keep it. The monthly cash flow that you are willing to accept is totally up to you, but my market is an aggressively appreciating market, and I’m happy to ride that wave if someone else is footing the bill, even if I’m not making much every month.
If you are in a C area, you’ll need decent cash flow to weather the inevitable storms that come from holding those properties. If you are seeing regular, reasonable appreciation and rent increases, it should be less important that you fully cash out or that the property performs like a dream right away. That property will become more efficient over time and can eventually become your cash cow.
If you are in a market that traditionally sees lower appreciation, say the Midwest or parts of the South, selling might be a better option. This is because the velocity of the equity you have could be put to better use in another project (this is the leverage piece I mentioned).
If rents average only 2% increases every year, and appreciation is historically similar, or barely keeping up with inflation, you can and should take that cash and do much better in many other ways than keeping it in a property and renting it out. Just keep in mind that you need to budget for the taxes you’ll pay on that income.
I find it fascinating, and it really speaks to how dynamic real estate investing can be, that there are so many people doing one thing—and doing it really well. However, they have very limited knowledge of other types of investing within real estate, as well as the pros and cons of each.
I’m talking about chronic flippers. I’ve lost count of the number of professional and truly talented flippers who have never kept a single property as a rental.
The Taxes
In addition, I know many people who have been writing checks to the IRS for hundreds of thousands of dollars every year because of how much they’ve “killed it” flipping houses. Fast-forward a few years, and they learn about tax strategy and cost segregation, and suddenly, CoC return when holding a rental doesn’t seem anywhere as important as the tax benefits of those paper losses.
Flipping is extremely active income—both literally and figuratively. If you aren’t buying, renovating, and selling properties, you aren’t making money. You are constantly active, and it can be stressful to let up on the gas. The IRS sees it exactly the same way—as an earned income/wage—and you’ll be taxed as such.
It might seem like I am saying that flipping houses isn’t a good idea, which is absolutely not true. If done correctly, there’s not really a much better way to build immediate capital, especially as you are starting out. Also, there are many properties that make for fantastic flips that would be terrible rentals.
There’s absolutely a time and place for flipping houses. Our team works with lots of flippers, both bringing them deals and buying them as turnkey rentals once they are done.
That being said, I think it’s fair to say that everyone reading this article is on BP because they are looking for FIRE and passive income. Flipping houses is, and can be, a stepping stone on that path, but it’s not the destination.
One of the biggest challenges for newbies is wrapping their heads around the tax benefits of buy-and-hold investing. It can truly be life-changing, and it’s nearly impossible to see or understand until you experience it. If you are strictly flipping homes, you’ll never see those tax benefits and are actually creating a higher tax liability for yourself.
Don’t get me wrong—paying a bunch of taxes because you made a boatload of money is definitely not a bad thing. But isn’t paying little to no taxes and making a bunch of money objectively better?
By considering a BRRRR on flips where it might make sense, you are giving a gift of a tiny bit of freedom to your future self. Do that repeatedly, and those tiny future gifts can change your family tree forever.
The Bottom Line
Flipping is truly a great way to build capital and start your real estate journey. However, I would encourage you to change the way you look at BRRRR and analysis if you are looking for long-term wealth and FIRE. That BRRRR might not look like a great deal today, but five or 10 years from now, you are very unlikely to regret keeping and depreciating that asset. You can always sell a property in the future if it doesn’t work out, but once you sell it, it’s gone forever. It might seem counterintuitive, but in real estate, you get wealthy by not selling. Be patient, give it some time, and enjoy the passive fruits of your labor in the not-so-distant future.
Article Provided Bigger Pockets and Written By: Corby Goade Investor & Realtor, Boise Turnkey Investments
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Every landlord is intimately familiar with managing the finances of rental properties. While the allure of valuable tax deductions exists, realizing them can be challenging.
Although practical for general financial tracking, generic accounting tools might not highlight property-specific deductions such as depreciation, repair costs, or travel expenses related to property management. As a result, landlords may inadvertently overlook significant savings during tax season.
Enter specialized accounting software —platforms tailored to streamline the financial management process to ensure landlords fully leverage all available tax advantages.
In this article, we’ll examine how traditional accounting tools can fall short and why specialized software is the key to unlocking these critical tax deductions.
While basic accounting software can record transactions and manage finances, when it comes to maximizing tax deductions, standard tools often don’t account for property management’s unique challenges and opportunities.
Specialized accounting software is more than just another digital tool — it’s a strategic partner for landlords in today’s competitive real estate market.
TRACKABILITY
Specialized software offers a comprehensive platform to monitor everything from rent payments to property related expenses.
AUTOMATION
Specialized software offers automation capabilities tailored for many financial tasks in property management, such as monthly rent collection or recurring maintenance costs. Landlords can set parameters, such as due dates for rent, categorize types of expenses, and even set reminders for irregular property-related costs.
CLOUD-BASED ACCESS
The best accounting tools for landlords today are cloud integrated, allowing access to financial overviews from anywhere.
5 WAYS ACCOUNTING SOFTWARE HELPS WITH TAX DEDUCTIONS
For real estate investors looking to maximize their tax benefits, specialized accounting software can be a game-changer. Let’s dive into the five key ways these tools can help you take advantage of valuable deductions.
1) ENHANCED ACCOUNTING PRACTICES
Beyond simply tracking numbers, landlord-centric accounting software offers a suite of tools that brings clarity to the complex financial landscape of property management by providing landlords insights on potential tax deductions.
2) REAL-TIME FINANCIAL OVERVIEW
A landlord’s financial landscape can shift rapidly. Specialized accounting software offers immediate insights into this dynamic environment, eliminating the need for prolonged setups.
3) EFFICIENT TRANSACTION MANAGEMENT
Handling numerous transactions is an integral part of a landlord’s duties. Specialized accounting software streamlines this process, offering intuitive features that minimize manual oversight. As a result, landlords save time and keep potential tax-deductible expenses from slipping through the cracks.
4) INTEGRATED PLATFORM AND SIMPLIFIED TAX PREP
Juggling multiple financial tasks is a daily challenge. With specialized accounting software, landlords can manage everything in one place, simplifying data management and allowing for a less complicated and more efficient tax preparation process.
5) SCALABILITY WITH DETAILED REPORTING SCALABILITY
As a landlord’s portfolio grows, so must their financial tracking system. Specialized accounting software rises to this challenge, ensuring growth doesn’t compromise clarity. With in-depth financial reports and side-by-side comparisons, landlords can gain invaluable insights.
FURTHER INSIGHTS: BEYOND BASIC TAX DEDUCTIONS
The initial benefits of specialized accounting software for landlords are clear. In this section, we’ll venture beyond primary tax deductions to uncover how these tools can become integral to managing a successful rental property business.
TAX CODE UPDATES AND REAL-TIME ADJUSTMENTS
The prospect of an audit can be overwhelming for landlords, especially when dealing with extensive portfolios. This is where specialized accounting software becomes indispensable. Landlords can swiftly and securely archive essential paperwork such as receipts, invoices, or expense reports. Having a well-organized and easily retrievable record system can distinguish between a stress-free experience and a logistical nightmare. Real estate and rental income tax regulations are in a constant state of flux, challenging landlords to stay abreast of these changes. Specialized software aids in aligning with up-to-date tax codes.
Providing timely alerts ensures that landlords remain aware of significant tax amendments, enabling them to adapt their financial strategies accordingly and safeguard their profits.
ADJUSTMENTS AUDIT TRAILS AND PROTECTION
The prospect of an audit can be overwhelming for landlords, especially when dealing with extensive portfolios. This is where specialized accounting software becomes indispensable.
Landlords can swiftly and securely archive essential paperwork such as receipts, invoices, or expense reports. Having a well-organized and easily retrievable record system can distinguish between a stress-free experience and a logistical nightmare.
Looking for the next level of landlord software before handing off to a property manager?
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For a minimal amount, there’s a really good basic package but what we love is the option to upgrade and add 24/7 maintenance management on.
Hemlane offers complete financial support as well. You can link multiple bank accounts for direct deposit rent payments, add automatic late fees, sends reminder notifications to your tenants, and has a detailed profit and loss statement that can includes automatic and manual uploads of income and expenses.
It gets better! If you reach a place where you are ready to hand off management to a property manager, Hemlane has that too under their “Complete” option.
THE BROADER SIGNIFICANCE OF SPECIALIZED SOFTWARE
It’s essential to zoom out and recognize the overarching value such platforms bring to the property management world. When navigating the complex world of property management, landlords need tools attuned to their specific challenges.
The evolution of such software paves the way for landlords to confidently approach their financial management backed by timely insights, automation, and adaptability. With rental portfolios ever expanding and the property management industry becoming more complex, relying on specialized tools is no longer just an option — it’s a necessity.
Article provided by GEMMA SMITH Entrepreneur & Property Manager, Rent Magazine
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