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A Mid Year Report Card, Is Your Property Achieving Its Goals?

With the end of June,  take this opportunity to review your property’s achievement or progress toward its goals.  Explaining goals during team meetings gives each team member ownership and understanding of these objectives.  Converting each objective into SMART goals gives a value every team member can measure. What occupancy is needed to produce the budgeted rent revenue?  What is the average occupancy for the first half of the year? How do the year to date expenses compare to the budget?  How do occupancy and expenses compare to the property performance from a year ago? With many organizations, success is not only measured in a comparison to budget, but also, it’s year over year expenses, same store sales. The results of changes to revenue and expenses will determine the effect on NOI, Net Operating Income, for the property. Has the Gross Rent Potential increased over the previous year?  This would be achieved if the market rent has been increased.  The impact of rent increases, is lessened by the existing leases on a property.  Managing lease renewals will reflect in a decreasing trend in the rent dollars tracked in a loss to lease expense area.  Failure to increase rents on renewals will decrease the rent revenue on a property. What change has affected the average or economic rent?  Market rents can be increased, but if lease renewals do not result in increased rental rates or move in concessions are increased; the average rent will have decreased from the year before. A property coul......
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Filing Taxes On Rental Properties

Filing Taxes On Rental Properties
If you receive rent from someone who lives in or on your property, you’re considered a landlord and must report the rent you receive as taxable income.  The rent you receive is considered income in the year you receive it even if the payment covers a time period in a different year. For example, if your tenant pays their January rent with their December rent in December 2014, both payments should be included in your 2014 taxes.  With rental properties, you are required to file with federal taxes as well as state taxes. Check the state tax laws where the rental property is located. In some states, you are not required to file a return if your income falls below a certain amount.You will input your data for your rental property into the Business Income and Taxes section.  If your property is located in a different state than your residence, you are also required to file a non-resident tax return. The IRS allows you to deduct necessary expenses required to maintain and manage a property that you rent out.  You are also able to deduct depreciation related to your rental property. Both of these deductibles combined will help to bolster your income on the property.  You’re even allowed to deduct these expenses if your property is vacant, as long as you have the intent of leasing that vacancy out.  With that being said, the expenses can only be deducted the year in which they are paid and not when they are ser......
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Saving Money and Protecting Resources: Water Conservation

Saving Money and Protecting Resources: Water Conservation
  It’s likely that if you own a rental property, your tenants never see a water bill. But you do, and you probably would love to see water usage go down, both for your bottom line and for the planet. There are a few ways you can do it without having to get your tenants on your side. Your landscaping might be one of the things that attracts renters, but plants can also use a lot of water. To reduce water usage, slowly replace plants that need a lot of water with ones that can withstand a little less moisture. You’ll save money and the look of your property won’t suffer at all. Installing aerators in all sinks in your building can do a lot to reduce water usage. Sinks without aerators can use up to 2.2 gallons of water per minute! Bathroom sinks can use an aerator with 1 or .5 gpm, but allow a little more water to go through kitchen sinks so all those dishes will get clean. A change that might be more expensive up front, but will save you plenty in the long run is replacing all of your toilets with efficient ones. This is a big one, because you can save up to 10 gallons of water per toilet per day. You could replace toilets one floor at a time if that works better for your budget, but keep in mind that you might get a bulk discount from the company that sells the toilets to yo......
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Tax Deductions for Property Managers

Tax Deductions for Property Managers
Welcome, 2014! The new year brings new beginnings, new projects, resolutions, and a dawning dread that tax time is just around the corner. Okay, it’s not just around the corner, exactly. But time flies and you should give yourself plenty of time to prepare so you’re not up all night the day before taxes are due. As a property manager, you’re entitled to deduct expenses related to your business. As long as you use an item for business purposes and not personal purposes, you can legally deduct it. Some of the items property managers often deduct include the following: Insurance — Insurance purchased to protect your business property or liability insurance are deductible. If you work from home and have an office there, part of your homeowner’s insurance may be deductible. Professional services — If you pay someone for consulting, legal services, or any sort of professional assistance you need for your business, those expenses are deductible. Equipment rentals — If you rent equipment for upkeep of your property, like a power washer, rental fees are deductible. Office expenses — Anything you purchase for your office, like printer ink, envelopes, business cards, etc., are deductible as long as these items are not used for personal use. Travel expenses — If your duties require that you travel on your own dime, those expenses are deductible. Did you attend a conference last year or visit an out-of-town property to learn best practices? Don’t forget to deduct those expenses. This is just a sampling of the deductions you may take as a property ......
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Managing the Mystery of the Maintenance Budget

image“We Need Supplies.” Maintenance Supply is often the expense account where there always seems to be more month than dollars in the budget. Given this is an area of operations that is reactive to the volume and variety of the requests of the residents; is it possible to effectively plan and budget for maintenance spending? It starts with an overview of the schedule for the property for the upcoming month. How many apartment homes will be prepared for move in? Generally there are ten to fifteen items that are purchased for every  apartment being prepped. -replace the sanitary items in the bathroom. -caulk for the countertops in the kitchen, vanity top and shower area in the bath. -drip pans for the cook top. The list of items with pricing information is going to outline the anticipated expense for apartment turns.  This amount applied to the number of apartments currently vacant will provide an estimate of potential expense for apartment turns. (This assumes items such as floor covering and appliance replacement are expensed to a capital improvement account code.) Next on the workflow agenda is preventive maintenance.  Is this the month to check smoke detectors or change furnace filters? How many apartments are scheduled and what is the cost of the supplies? Furnace filters for 100 apartments, $300. Lastly, the never ending flow of service requests. Again, the property record keeping will help determine an average number of work orders that are received each week/month. For a property with 50 service orders per......
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