Named after the game of leapfrogging, “phrogging” is the act of secretly living in someone else’s home without their knowledge or permission. The phrogger hops from property to property with one goal in mind: to live a rent-free lifestyle, regardless of who’s on the lease.
Don’t think that your renters are in cahoots with phroggers; your tenants won’t know who’s living in the walls any more than you do.
Though this may all sound like the plot of a thriller (Parasite arguably did it best), phrogging is all too real. Just ask Paul Mohlman, a man who discovered half-dressed intruders cooking illegal substances in his crawl space back in 2019. In 2021, a 20-year-old Cedar City resident pled guilty to burglary, criminal mischief, and trespassing charges after breaking into multiple residences and watching pornography while the residents slept nearby.
So, what’s a landlord to do? It’s time to arm yourself with knowledge and an action plan to catch phroggers mid-croak.
Who Are Phroggers?
Many phroggers either suffer from mental health problems, have a specific target in mind (e.g., someone they don’t like), or are the property owner’s fans, Lifehacker points out. Mental health struggles shouldn’t be taken lightly and deserve empathy. At the same time, you have the right to know who’s living in your property and the duty to protect your tenants from this type of criminal activity.
Phrogging vs. Squatting
People living in property that isn’t theirs may remind you of another common fear among landlords: squatting. But squatting and phrogging are distinctly different in three ways:
- The person’s intent. A squatter typically wants to live in the property long term and may assume ownership after a certain period of time, depending on your local laws. Phroggers break in on a short-term basis and don’t want to take ownership of the property.
- The laws they’re breaking. While squatters and phroggers are typically trespassing on a criminal level, they rack up additional law violations depending on their intent. Depending on your state, squatters may also face destruction of property and vandalism. Phroggers could be charged with invasion of privacy, stalking, and harassment, depending on their behavior in the unit.
- Who they target. Phroggers usually target occupied properties while squatters focus on vacant homes. Although phrogging is less likely to occur than squatting, this difference underscores the additional danger the former brings to light.
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How to Protect Your Rentals From Phrogging
You’re not as likely to discover a phrogger as your tenant, but that doesn’t mean there’s nothing you can do to protect your property. If you have reason to believe that someone is secretly living in the unit, you should:
- Talk to your tenants. Let them know your concerns and ask if anyone else is living in the property. Explain that you plan to have the police get involved and want everyone to stay safe. This gives them the chance to come clean if they moved someone in who isn’t on the lease or even provide additional context for your concerns. If they’re concerned too, move on to the next step.
- Gather evidence. Installing discreet cameras with your tenants’ explicit consent could help you and the police determine what’s going on. If you catch a mysterious figure sneaking out of the attic at night and plundering the fridge, you’ll have the proof you need to move forward.
- Contact the police. If you or your tenant are truly worried that someone’s snuck in the unit or you capture something on camera, do not continue to investigate by yourself. That could lead to a seriously dangerous situation. As Lifehacker highlights, “even if you can use deadly force against intruders in your property legally, killing someone who just wants somewhere warm to sleep for a few nights has troubling moral implications.” Get professionals involved instead.
But let’s say that all of this information makes you want to take precautions before anyone can leapfrog into your rental. Here’s what you need to do:
- Maintain a regular property inspection cadence and watch out for signs of unauthorized entry or occupation.
- Keep property maintenance as a top priority, especially anything related to the property’s entry points.
- Install a security system, complete with alarms and motion detectors. Check your state laws and communicate with your tenants before taking this step!
- Make sure your tenants feel comfortable coming to you with concerns by prioritizing your professional relationship.
By following these steps, you’ll set yourself up to catch phroggers if any of them should make their way to your (lily)pad. Another great way to protect your rentals is to screen tenants thoroughly, maintain good documentation, and communicate with your renters.
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As we enter the new year, it is crucial for professionals in the property management industry to recognize the vital importance of fair housing education. A well-rounded understanding of fair housing laws and practices is not just a best practice but a fundamental aspect of professional development that can significantly impact the success and integrity of your business.
Understanding the Essence of Fair Housing Training
Fair housing education goes beyond mere compliance. It represents an investment in your company’s future. Thorough training ensures that every team member is equipped with the knowledge to navigate complex situations, uphold the law, and provide exemplary service to prospects and residents from diverse backgrounds.
The Importance of Comprehensive Training
Superficial or incomplete training methods may seem sufficient in the short term, but they fail to impart the deep understanding necessary to handle real-world scenarios effectively. Effective fair housing training involves more than just taking a quick free course or watching a few basic videos.
A comprehensive training program includes detailed courses, engaging content, and practical assessments that ensure retention and understanding. It should encompass a range of learning methods, including interactive sessions, case studies, and regular updates on new laws and best practices. This holistic approach ensures that employees not only learn but also internalize the principles of fair housing.
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Identifying Areas for Improvement
Regular evaluations of your training program are essential. If employees are making mistakes or showing a lack of understanding, it could indicate the need for a more robust or engaging educational approach.
Another common misconception is that once trained, always trained. As we all know, fair housing can be very complicated to navigate. Add to that the fact that emerging court cases can create new precedents, resulting in adjustments to understanding or even complete law changes. As a result, more and more companies are shifting to annual training. The benefits of this are easily identifiable. Having a team that is fully and annually trained reduces the risks of a costly fair housing complaint, some of which can cost into the millions of dollars.
The Cost of Not Training
The cost of defending a fair housing complaint can vary significantly based on the specifics of each case. Defending against a fair housing complaint can involve significant legal fees, compensatory damages for the plaintiff, along with civil penalties.
Beyond monetary penalties, there can be other costs like the impact on a company’s or landlord’s reputation, as HUD keeps a public record of all charges filed through them. This can affect future resident relations and business operations.
Commitment to Continuous Learning
The dynamic nature of fair housing laws and the diverse challenges faced in property management require a commitment to continuous learning. As we embark on a new year, it’s the perfect time to assess, update, and improve your fair housing training programs. This will not only protect your company from potential legal issues but also foster a culture of respect, inclusion, and excellence in service.
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Thank you to the Fair Housing Institute for providing this informative article!
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Even if you spend hours washing the floor, dusting furniture, and vacuuming the nooks and crannies around your home, your home isn’t really clean until you attend to the grime, dust, and pet hair that has accumulated on the baseboards. Cleaning the trim around the floors in your home should be done at least seasonally. Because vacuuming, mopping, and other household chores stir up dust, you’ll want to save the baseboards for last if you don’t want to clean your baseboards twice.
TOOLS & MATERIALS
- Vacuum
- Sponge
- Dish soap
- Vinegar
- Wood cleaner
- Cotton swabs
- Dryer sheets
- Duster
- Dust rags
- Mr. Clean Magic Eraser
- Baby wipes
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Before You Begin
For a lighter cleaning, there’s no need to move furniture, but be sure to check for visible grime wherever the baseboard heads behind a piece of furniture. If you can see the dirt, everyone else can too.
Step 1: Vacuum the area.
Photo: istockphoto.com
Begin the process by removing as much dust and dirt as you can from the area. If your vacuum has a brush attachment, use it to suction along the length of the baseboards. Pay special attention to the crevice where the trim meets the floor. In lieu of a vacuum, you can rely on a duster or dust rag to do a decent job of freeing up debris, which you can then corral and remove with a broom and dustpan.
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Step 2: Wipe down the baseboards.
Once you’ve removed all loose dirt and dust, you can begin to address stains and stuck-on grime. (Particularly in the kitchen, baseboards are the notorious hosts of unidentifiable splatters.)
Dip a sponge or rag into a mixture of warm water and dish soap (vinegar works well too), then go about scrubbing any marks that you can find. Alternatively, consider using a Mr. Clean Magic Eraser. If you’re in a hurry, you can just run a baby wipe over the trim. Note that if the baseboards are stained, not painted, it may be better to use a cleaning solution formulated specifically for that application.
Step 3: Clean the crevices.
We know a good trick to cleaning baseboards in those hard-to-reach-spots, like the crevice between the trim and flooring. Just grab a cotton swab from the bathroom and dip it in the cleaning solution, gently wiping away the dirt. The swab is small enough to fit into those tight spaces and corners, and absorbent enough for cleaning. A toothbrush can also come in handy for getting gunk out of crevices and corners, and it’s particularly good at loosening dirt stuck to the caulk.
Step 4: Rub the baseboard with a dryer sheet.
Photo: prohousekeepers.com
Once the baseboards are clean, here’s how to keep them dust- and hair-free: Rub them with a dryer sheet. Not only will this leave a fresh scent that lasts a few days, but the sheet’s antistatic properties also repel dust.
Baseboard Cleaning Tips
Photo: istockphoto.com
- Clean your baseboards about once a month.
- If your baseboards are particularly dusty, you may need to run the vacuum or a broom over the surrounding floors a second time after your baseboard cleaning.
- If moving heavy furniture isn’t feasible in your situation, try using a duster on a long handle to reach behind it. Some duster kits come with extension poles that are ideal for this purpose.
- As always, consider the environment when cleaning your home, choosing nontoxic products when possible.
Final Thoughts
Even if your baseboards are so grimy that you’re tempted to tear them out and replace them at any cost, there’s really no need for such drastic measures. While cleaning baseboards isn’t the most enjoyable task, with the tools mentioned above plus a little elbow grease, your trim will look as good as new.
Article provided by Bob Vila and Gretchen Heber
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Thank you to BiggerPockets for this informative article.
A real estate attorney is required at closing in many states. Even if your state doesn’t demand that a real estate lawyer appear, having a legal professional representing your interests is usually a good idea.
When you’re investing in real estate, finding the right lawyer is essential. Your real estate attorney assists you in navigating every aspect of the process. If legal issues arise in real estate transactions, you have someone who knows real estate laws fighting for you.
What Is a Real Estate Attorney?
As with doctors, lawyers have their own areas of specialization. While some attorneys are generalists, when buying and selling property, you should hire a true real estate lawyer to advise you and protect your interests. Such an attorney is well-versed in property law concerning state laws.
If you are considering investing out of state, look for attorneys licensed to practice in other states.
What Does a Real Estate Attorney Do?
A real estate attorney represents you in all matters related to real estate law. Your real estate attorney’s role may include the following tasks:
Legal documents preparation
Even simple real estate transactions can involve substantial paperwork. More complicated situations only increase the sheer volume of legal documents.
For instance, a real estate lawyer arranges with a title company to conduct a title search. The property must have a clear title with no third-party claims. Once the title company provides a report, your real estate attorney reviews it and works with your mortgage lender or other relevant parties if any title issues exist.
Ensuring all legal documentation is correct is a primary role of real estate attorneys. Real estate is likely your biggest investment. Working with a licensed attorney is critical.
Make your business an LLC
Structuring your business as an LLC can bring important advantages: It lets you limit your personal liability for business debts and simplify your taxes.
With NOLO, you’ll find the key legal forms you need to create a single-member or multi-member LLC in your state, including:
- LLC articles of organization
- operating agreement for member-managed LLC
- operating agreement for manager-managed LLC
- LLC reservation of name letter, and
- minutes of meeting form.
Form Your Own Limited Liability Company has easy-to-understand instructions, including how to create an operating agreement that covers how profits and losses are divided and major business decisions are made. You’ll also learn how to choose a unique LLC name that meets state legal requirements and how to take care of ongoing legal and tax paperwork.
Contract review
During the review process, your lawyer should catch any errors in closing and other documents involved in the real estate transaction. The start of the deal is the real estate contract.
Often, a real estate agent draws up the initial contract. Real estate lawyers must review the purchase contract carefully, as it sets forth the buyer and seller’s obligations. The attorney then drafts riders, also known as amendments, for their clients’ needs. These amendments may involve financing and appraisal contingencies, personal property included or excluded, and unique provisions affecting the property in question.
Dispute resolution
Real estate transactions don’t always run smoothly. Perhaps there is a lien on the property, a title issue, or a boundary question. Your real estate lawyer works to resolve these disputes so you can move forward with your real estate transaction.
Business formation
Using the right business formation for investment properties protects you from liability. Your real estate lawyer will work with you to determine whether an LLC, partnership, or some other type of business entity is best for your legal needs.
Financing and refinancing
A real estate attorney may advise you on mortgage financing and when to refinance your mortgage loan. They may work with a mortgage lender or commercial real estate lender to help with financing.
Real estate attorneys also guide you on related legal matters, such as tax implications when selling property.
Equity and debt investment structures
Real estate lawyers assist clients in the structure and management of their equity and debt, focusing on maximizing their returns.
Drafting tenant leases
Your real estate lawyer should draft a strong lease agreement for tenants to avoid potential disputes. All parties benefit from a clear lease agreement that protects their interests.
You could simply use a boilerplate lease agreement and save some money as a landlord. That’s a penny-wise and pound-foolish, as a professional with a thorough knowledge of real estate law ensures your real property is as fully protected as the law allows.
Dealing with tenant complaints
When a tenant complains, you must know whether that complaint is legitimate according to the terms of the lease or applicable local, state, or federal law. Your lawyer will explain landlords’ and tenants’ legal rights and responsibilities and whether the complaint breaches the lease agreement.
The attorney will act to resolve the complaint before it escalates into costly litigation.
Property tax advice
Real property ownership means paying property taxes. Your current property taxes may not reflect the realities of the market. Your lawyer can advise you about filing a property tax appeal to fight an overvalued assessment.
Benefits of Partnering With a Real Estate Attorney
When you partner with a real estate attorney for your investment properties, they can handle virtually all of the process. That leaves you, as the investor, more time to concentrate on obtaining a good return on the investment.
If problems arise before, during, or after the purchase of a property, you can rely on your real estate lawyer to sort them out.
Real estate attorneys will advise you about backing out of a deal and avoiding a costly mistake.
The bottom line is that the real estate attorney you hire is always working to protect your best interests.
How Much Does a Real Estate Attorney Cost?
A real estate attorney’s services may be inexpensive, but remember, you get what you pay for. How much you can afford in legal fees is one of the first things you should determine when considering hiring a lawyer for your investment team.
A real estate lawyer may charge you hourly or flat rates. Remember that while a more experienced real estate attorney will charge higher fees, their expertise is worth it.
How To Find a Real Estate Attorney
You can always find a real estate attorney online. Googling is a great way to get started, but the goal is to find a good real estate lawyer, not an average attorney.
Your best bet is often asking for recommendations from those in the real estate industry, such as a real estate agent or fellow real estate investor. They know the best real estate attorneys in your area. Friends or family with real estate experience are another good source of advice.
Look for lawyers with experience in your particular field. For instance, if you’re investing in commercial property, look for attorneys specializing in that domain. Some real estate lawyers are generalists, doing whatever real estate work comes their way. Because the various realms of real estate investing are so different, these attorneys are more likely to make mistakes. They are not necessarily experts in real estate law.
Rather than go with a larger firm, check out smaller practices. You will work directly with one attorney rather than being delegated to less experienced associates at larger firms.
What To Ask a Real Estate Attorney
Conduct interviews before deciding on whom to hire as a real estate attorney. You seek a long-term professional advisor, so you must know exactly what to expect. Ask the following questions:
- What is your fee schedule? Do you charge a flat fee or an hourly rate?
- Where did you go to law school?
- What is your experience with either residential, commercial, or industrial real estate investing?
- How many real estate transactions have you closed?
- Do you go to court regularly to handle evictions?
- Do you have any potential conflicts of interest?
Save Money in the Long Run With a Real Estate Attorney
Legal fees aren’t cheap, but they are far less expensive than losing a property due to an avoidable legal problem. After all, real estate investing aims to maximize profits while reducing risks. The right real estate attorney helps to fulfill both objectives.
By hiring a real estate attorney as part of your investment team, you should save money over the long term. That’s because the work of the attorney you hire can limit future problems.
Once a real estate attorney is hired, you have someone to advise you on every aspect of your investment strategy while protecting your interests. Smart investors know how valuable the services of a lawyer are when dealing with complicated legal matters pertaining to property.
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So, you know how there’s laws in most states now pertaining to the health and safety of rental properties using smoke detectors, dealing with mold, about lead based paint, and how to handle tenants with bed bugs?
Several years ago, California passed a law, SB-721 which basically said rental property owners of certain sized properties had to have their decks and balconies inspected and remedied by 2025 and then within every 5 years thereafter.
This was in response to a deadly balcony collapse with several other instances across the state severely injuring people just hanging out to have a good time.
The point is, many other states have also experienced deaths and serious injuries from decks and balconies that collapsed since California has passed this law. Now, those states are now following suit to force landlords to repair dry rotted or damaged decks or balconies.
And this my friends is the subject of this week’s podcast.
You may think it doesn’t apply to you but at some point, it will.
It’s risk management at its best!
Listen to what we have to say about the law pertaining to deck and balcony inspections regardless of what state your rental property is in.
LINKS
👉 Apartment Maintenance Guide, Deck and Balcony Inspections
👉 Get your California deck and balcony inspected! Call Dan Cronk and let him know Your Landlord Resource sent you!
(916) 238-0618
DAN@DECKANDBALCONYINSPECTIONS.COM
👉 California Senate Bill 721: Building Standards, Decks and Balcony Inspection
👉 SB-326: Condominium Complex Health and Safety Code for Decks and Balcony’s
👉 San Francisco Housing Code 604
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In 2004, I was living in NYC when I decided to start a new career. To identify potential business opportunities, I thought about some of the more frustrating experiences I’d had. I quickly narrowed the list to buying investment properties.
The problem was that all real estate agents could do was send me MLS data sheets for the properties I selected; no analytics, processes, or services. I had to do everything myself. This was time-consuming, and I made frustrating mistakes that cost me time and money to correct later.
So, there was a business opportunity. Now, I need to know where to create this business (not New York or New Jersey).
How I Did My Analysis
I started researching how retail store chains select locations for new stores. Based on my research, I determined the sequence of events necessary for success, as shown in the chart.
My first decision was location. Based on my research, I selected Las Vegas.
The next step was to determine the right tenant pool segment to target. This step is crucial because the only way to have a reliable income is if reliable tenants continuously occupy the property. A reliable tenant stays for many years, always pays the rent on schedule, and takes good care of the property.
Based on my experience with rental properties and what I learned from others, reliable tenants are the exception, not the norm. Because my clients and I plan to hold these properties for many years, we will need multiple reliable tenants throughout the hold time. The best way to increase the chances of always having a reliable tenant is to purchase properties that attract people from a segment with a high concentration of reliable people.
Therefore, my task was to find a tenant segment with a high concentration of reliable tenants.
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As an engineer, I used the standard approach of analyzing data. I tried various (paid and free) data sets and wrote a lot of software, but (I would be embarrassed to tell you how long I persisted) I finally decided that classic data analysis would not work. The fundamental problem is that humans do not behave algorithmically. So, I ditched this approach.
Next, I decided to mine historical rental data to understand past tenant behaviors. I downloaded about 10 years of MLS rental history data and started over. I tried many things (that failed), and then I plotted monthly rent versus length of stay.
The result was similar to the chart, showing a strong correlation between how long a tenant stays in the property and the amount of rent. This was the starting point I had been searching for.
I investigated the segment of tenants who stayed over five years, converting the low and upper rent range of properties they occupied to approximate gross monthly income using monthly rent/30% = gross monthly wage.
I next interviewed property managers and cruised job boards to determine probable jobs based on gross monthly income. By doing this, I concluded that people earning below a certain wage tended to have lower-skilled jobs, which made them vulnerable to layoffs during economic downturns. Therefore, I raised the lower-income threshold above this wage.
I next looked at the upper-end income range and determined that jobs above a certain wage were primarily administrative. These workers would also be laid off during economic downturns. So, I lowered the upper-income threshold below this wage level.
The result was a narrow wage/rent range that I believed to have secure jobs due to the nature of their work, as shown in the chart.
Each tenant segment has specific housing requirements and is unlikely to rent a property if it does not meet all their requirements. So if you buy a property that matches the housing requirements of a specific tenant segment, most of the applicants will be from that segment.
Creating a Property Profile
To determine the characteristics of properties that would attract my target tenant segment, I used data analytics to determine what and where they rent today. From this, I created what I refer to as a property profile.
A property profile is a physical description of the properties that this segment is currently renting. It has at least four elements:
- Location: The locations where significant percentages of the target segment are renting today.
- Property type: What type of properties are they renting today? Condo, high-rise, multifamily, single-family?
- Rent range: What the segment is willing and able to pay.
- Configuration: Two bedrooms, three-car garage, large backyard, single-story, two stories?
I ran correlations between properties identified by the property profile and actual historical rental data and found a high correlation between the two. After so long, I thought I had what I needed.
And then reality came crashing down.
The issue was that numerous new listings entered the market daily, and the most desirable properties often went under contract within two to three days. This left us only 24 to 36 hours after a property was listed to identify it as a potential option, evaluate it, gather analytical information, and submit an offer.
Doing this process manually for hundreds of properties each day was impossible. So, once again, I turned to data analytics.
Our Data Mining Engine
I’ve worked on data mining engines for investment property selection since 2007. All the algorithms I tried were similar to what Rentometer, Zillow, and Opendoor were using, which was not nearly good enough to make purchase decisions.
Finally, around 2015, I discovered a very different methodology to find good properties. I am still enhancing that software to this day.
Our data mining engine architecture is illustrated here.
After years of improvements, the engine can now find the small number of potential investment properties from among thousands in less than five minutes.
However, data analytics can only go so far because software only deals with data, and we are dealing with humans.
I next put together a team and processes that took the output of the data mining engine and selected properties that matched individual clients’ requirements. These properties are then rigorously evaluated by a team of experts, as illustrated in the chart.
Only if a property matches the client’s requirements and passes evaluation by multiple team members do we send the client a property report containing the analytical information they need to make an informed decision. Due to our software, processes, and team members, we can evaluate numerous properties in a single day and present our clients with actionable information on properties that match their individual profiles within that same day.
Our clients feel our data analytics and processes are effective.
Final Thoughts
Data analytics and processes are the cornerstone of our business. Without data analytics, we could not find the properties needed to meet our client’s specific financial goals. Also, we could not evaluate properties fast enough to make offers before they were gone.
Provided by Bigger Pockets. Written by: Eric Fernwood
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Provide long-term income and boost your home’s value with an income suite or rentable accessory dwelling unit.
Installing an independent housing unit at your property can be a big investment, but if planned well, an income suite (also known as an in-law suite or accessory dwelling unit), can be a terrific way to pay down a mortgage faster, build equity in a home, and increase its resale value. However, there are 10 important things to consider before installing an income suite in your home or property to ensure that you and your tenants have a positive experience.
1. Do you want to be a landlord?
Whether your plan is to have a long-term or short-term rental, being a landlord requires work and effort. Plus, a landlord’s duties often come at short notice or inconvenient times. Tasks can include screening potential tenants, performing regular maintenance work, handling repairs, and dealing with disputes or rental payment problems. Think about whether you are willing to put in the work yourself or if you might prefer to hire a property manager to care for your rental management duties.
2. What are the laws regarding landlords and tenants in your area?
Familiarize yourself with the laws governing residential tenants and landlords in your area. By knowing your rights and those of your tenant and understanding each person’s obligations, you can start the landlord-tenant relationship off on the right foot, avoid missteps, and have a plan in place for dealing with any potential disputes or legal issues.
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3. How will rental income affect your taxes?
Rental income can be a great way to increase your household revenue, but it’s not “free” money. The rent money you earn is subject to income tax. When you file your taxes, you can deduct from your rental income expenses incurred, such as repair costs, operating expenses, and utilities. You should also be aware that capital gains tax may apply if you sell your home, depending on how much rental income you earned while you owned it.
4. What will you be giving up?
Installing an income suite in your home or property may mean giving up more than just extra living space. Having tenants may also mean giving up a portion of your privacy, storage space, and perhaps even some peace and quiet. Consider how having tenants within your property may affect your daily life, and make sure you can live with the inconveniences that may be involved.
5. What are your local ordinances?
Before drawing up plans, research your local zoning laws and building codes. Some municipalities do not allow for certain types of accessory dwelling units, and many have very specific requirements on what constitutes a legal suite.
Your local zoning office can supply you with your jurisdiction’s requirements on things like ceiling height, windows, fire safety, and emergency exits. Make sure you know what you can and can’t do before you apply for building permits.
6. How much will the project cost?
Installing an income suite is a major project that can take a significant amount of time and money. Expect to spend anywhere from $40,000 up to $150,000 or more, depending on the size of the space, whether structural work is needed—such as digging out and underpinning a basement—and whether the suite is a standalone structure or within an existing home.
Resist the temptation to take shortcuts to contain costs. Protect yourself and your future tenants by including the time and money in your budget to do everything legally.
7. How will you access shared utilities?
Many houses have utility access in the basement, which could be a problem if you’re planning on renting the space. If possible, try to place utilities such as the furnace, electrical panel, and water shutoff in a shared space outside of the rental unit so that maintenance tasks and emergency work can happen without having to coordinate access to the unit with the tenant.
8. Will you share an HVAC system?
While most building codes allow for a single furnace to heat an entire house with more than one dwelling unit, you might want to consider installing a separate HVAC system for each unit. Sharing air ducts will likely mean also sharing cooking smells, scents, dust, and noise. Plus, having one thermostat controlling both units may be problematic if you and your tenants have different preferences for temperature.
9. Will you hire an architect or a contractor first?
If contractors in your area tend to book up quickly, you may be tempted to find one before you get an architect to draw up the plans. But hiring an architect first is almost always the wisest course, as the money you spend upfront for an architect can be balanced out by bids from builders that are more accurate and easier to compare.
If you’re not interested in bidding out your project, consider working with a design-build firm. By hiring an architect and contractor at one firm, it may also help smooth the permit and inspection processes.
10. If you were your tenant, what would you want?
Not only do you want your rental unit to be up-to-code and above-board, but you also want it to be comfortable and a pleasure to live in. Long-term tenant
turnover zaps rental profit and adds heaps to your workload, so once you find quality tenants, it’s ideal when they stay a long time.
As you design your income suite, think about how you would use the space if you were living there. For example, if the kitchen area is limited, would you rather an 18-inch stove and 24-inch fridge, or vice versa? If you only had room for either a dishwasher or a laundry machine, which would you choose?
Article provided by Bob Villa. Written by Jahleen Turnbull-Sousa.
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The most important person in your financial life — outside of your spouse if you’re married — is your tax advisor. Taxes represent one of the largest expenses you’ll face in your lifetime. And, if you understand the tax law, they are also one of the most straightforward expenses to reduce.
The right tax advisor will work with you to design our real estate business in a way that helps you reach your financial goals while legally (and permanently) reducing or eliminating your taxes. Choose the wrong advisor, and you’ll find yourself paying more taxes and missing out on some great wealth-building opportunities by investing in ways the government incentivizes. What exactly does the right advisor look like? As you evaluate your options, here is a guide with seven questions to consider when hiring a real estate tax CPA.
1. What are their credentials?
It’s easy to call yourself a tax advisor. You want to avoid someone who claims to be a tax advisor simply because they are authorized to prepare federal tax returns. Instead, look for a Certified Public Accountant specializing in tax.
2. What system do they use for tax reduction?
The best advisors don’t just rely on their knowledge and experience; they follow a proven system for permanent tax reduction. A top-notch CPA should be able to show you evidence that they’ve used this system for many clients with real estate investments. Working with someone who consistently replicates results is a far better predictor of your future success than partnering with an advisor who operates without a system.
3. Who is in their network?
A top-notch real estate tax CPA is not an island. They are connected to a strong network of specialists, including real estate attorneys, mortgage brokers, cost segregation specialists, insurance brokers and more. As your financial plans evolve and become more complex, having access to this vast pool of expertise can prove invaluable.
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4. How often will we meet?
To be a true advisor, your CPA should meet with you throughout the year, not just at tax time. You’re looking for someone who will proactively reach out to offer new ideas, get regular updates on your business and check in on your long-term goals. As a rule of thumb, something is wrong if you visit your dentist more often than you speak with your tax advisor.
5. How will they handle an IRS audit?
If you do become audited, you deserve an experienced tax advisor who will go to bat for you and your business. Ask prospective CPAs to share examples of how they’ve handled client audits. If a CPA suggests skipping legitimate tax deductions to avoid an audit, look for a different CPA. You want a CPA who isn’t afraid of the IRS, who will handle all communication with the agency and who is comfortable with the process.
6. What do they think about real estate?
Any good tax advisor loves real estate. It’s one of the best investments you can make to create wealth while permanently reducing taxes. As you listen to the response to this question, also look for signs that the CPA has an entrepreneurial mindset. A CPA who thinks like an entrepreneur can be a game-changer. They will be more innovative when it comes to helping you accomplish your financial goals.
7. Can I check their background?
Before hiring a real estate tax CPA, it’s crucial to conduct a thorough background check. This process should involve checking their credentials, verifying their license, reviewing client testimonials, and even checking for any disciplinary actions or complaints.
THE BOTTOM LINE
Finding the right real estate tax CPA involves more than choosing someone with an impressive resume. It’s about finding a strategic partner who can help you navigate the complex world of real estate taxes, leverage opportunities and ultimately build wealth. By asking these seven questions, you’ll be well on your way to finding a CPA who can take your real estate investment game to the next level.
Provided by Rent Magazine, written by Tom Wheelwright, CPA CEO WeathAbility
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Every new year we all want to focus on some level of change. Maybe it’s to lose weight, read more books, be more active, or grow your business.
Hey, we are right there with most of these people! But over the years we have learned various ways that work well for us and it’s not by creating overzealous and rarely achievable resolutions.
In this episode we are connecting some real-life habits that have helped us in our personal lives which have automatically transferred over to boost our professional focuses as well.
We use common examples for each of the tactics and how they can help landlords achieve organization, strategy, confidence, and growth in their rental property business.
Here is a quick summary of what we discuss:
We talk about intentions and how small actionable steps can help you realistically reach goals you have set for yourself, either personally or professionally.
Then we discuss how decision-making and the choices you make affect the way you achieve those goals. But also, those choices are necessary and if the results don’t work out as planned, you have to adapt and pivot by using those results as a guide on what to or not to do.
The conversation then goes into learning to be flexible, being organized and ways to create more time so you can work on your goals.
Maybe you need to hear this, maybe you’re doing ok but can use a refresher, regardless, we are here to walk you through making this new year, develop a new landlord mindset!
LINKS
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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?
Hemlane is a software that is built to grow with your needs as a landlord.
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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