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Tips About Investment Property Management

Investment property management is one thing that most people know almost nothing about. Most people who have to hire a property management firm for the first time are clueless about what these companies actually do. So we have compiles the following tips concerning investment property management to help you know how to hire a property management firm, when you need to hire one of these companies, and what to expect from them.1. A property management firm takes care of all issues related to real estate holding their clients have. They see that the property is kept up, that taxes are paid, that tenants pay their rents on time, and any other issues that might come to light concerning the property.2. Rental properties such as apartment buildings, or single dwelling homes, are an investment. People quickly find that managing the daily books connected with rental properties is a full time job. Investment property management requires detailed records to be kept, legal issues to be dealt with, and most people hire professionals to handle these issues for them.3. When you invest in property you must maintain the taxes on the property each year4. You must have insurance that will protect you in case anyone is injured on your property5. The property must be kept in good repair. This will entail hiring electricians, painters, carpenters, and other types of contractors to do any repairs that are needed. A property management firm will keep records on what repairs are made, who they hired to do the repairs, and the cost of the repairs so that you can deduct the cost of the repairs from your profits at tax time6. You will not be able to deduct the full amount of everything that you invest in a rental property. You need a professional to advice you as to what things are deductible and what things are not7. You need to run a background check on any potential tenant before you sign a lease agreement with them8. There are strict rules that you must follow in order to evict a tenant from a rental property. A professional company knows the rules and the legal ramifications of each of them.9. You can customize your property management details with a professional company. You may want to do some of the things for yourself and save some of the cost of upkeep and maintenance on the property. Negotiating with the professional managers you are hiring to get the package you want at a price you like is part of the business of being a property owner.10. The money that you pay a professional company to manage your investment interests may be completely deductible as a legitimate business expense at the end of the fiscal yearOwning property is a great way to secure financial profits each month. You have to invest in the right people to help you maintain those properties so you do not get lost in the day-to-day details of keeping them.

Appealing Business Personal Property Tax Assessments in Texas

“Collecting more taxes than is necessary is legalized robbery.” These words of wisdom, spoken by the 13th president of the United States, Calvin Coolidge, still ring true in today’s society for homeowners and business owners. Robbery may seem like a harsh word, but what would you say if someone tried to sell you one-year-old motel sheets for 90% of the original cost? Based on the appraisal district’s depreciation schedule, this is a fair deal.Most people would not consider this a fair deal and either reject the offer or request a lower price. This should be the same thought process when the appraisal district overassesses your business personal property (BPP). Texas law requires business owners to report BPP, personal property used for the production of income, to the appraisal district for assessment and taxation. Although there are no criminal penalties for not complying with the law, there is a penalty of 10% of the taxes. For example, if you have a BPP account assessed for $100,000, your annual BPP taxes are $3,000, based on a 3% tax rate. The 10% penalty for this BPP account would be $300 ($3,000 times 10% equals $300).The huge range of assessed value for business personal property (BPP) makes obtaining substantial property tax reductions highly probable. It is not unusual for the range of assessed value for BPP accounts for similar properties to vary by 5,000%! For example, furniture and computers for companies within the same office building sometimes vary from $1 to $50 per square foot. Market value and unequal appraisal are two options for appealing BPP assessments. Given the inequity in BPP assessments and the subjectivity of valuing BPP, property owners have a high probability of success when properly prepared for a BPP assessment appeal. Protest both market value and unequal appraisal.How to appeal?To appeal your BPP, you can either use the Comptroller’s form, or send a letter to the appraisal review board (ARB) on or before May 31st of each year. The protest letter to the ARB should identify the property and the reason for your protest (section 41.44d of the Texas Property Tax Code).Tips:· Since the appraisal district’s staff tends to become more motivated to resolve appeals later in the season versus earlier in the season, it is better to appeal or protest on May 31st or shortly before the deadline date.· Even if you do not receive a notice of assessed value for your BPP account, it is still important to send a written notice of appeal or protest. The appraisal district does not have to send a notice of your assessed value if the value does not change by more than $1,000. If the notice of assessed value gets lost in the mail, and you do not send a protest notice, you lose your right to appeal for the current year.When sending a notice of appeal to the ARB, also send the appraisal district a House Bill 201 request. House Bill 201 refers to section 41.461 of the Texas Property Tax Code that allows property owners to obtain a copy of any evidence the appraisal district plans to use at the ARB hearing 14 days before the hearing. This request prohibits the appraisal district from using any information that was not provided to the property owner 14 days before the ARB hearing.Market Value, Book Value & Comptroller ScheduleThree popular options for describing value for BPP are: market value, book value, and the Comptroller’s schedule. Market value is defined in section 1.04(7) of the Texas Property Tax Code that reads as follows:”Market value” means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:(a) exposed for sale in the open market with a reasonable time for the seller to find a purchaser,(b) Both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions on its use, and(c) Both the seller and the purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.Let’s compare the differences in value resulting from using market value, book value and the Comptroller’s schedule. The BPP for a typical motel room includes items such as bedding, linens, window air-conditioning unit, towels and a television. Based on market value, after one year, these types of items could probably only be sold for 10% to 30% of the original cost. Book value, based on federal depreciation schedules, indicates a value of 80% of the purchase price after one year. The Texas Comptroller’s schedule for BPP for motels has an eight-year life with 10% depreciation for the first seven years. Hence, the Comptroller schedule indicates one-year old hotel furnishings are worth 90% of their original purchase price. This is clearly inconsistent with market value for these items.InventoryThere are a number of controversial issues related to how inventory is assessed. These include shrinkage, damage, functional obsolescence and economic obsolescence. For example, what is the market value of merchandise returned during the week after Christmas on January 1st (the effective date for valuation)? Since returned merchandise has usually been opened, damaged, missing parts or may be an unpopular item, it is worth less than cost in many cases. Market value is relevant in determining the assessed value for inventory for Texas BPP taxes.Unequal appraisalAssessed values for BPP accounts often range from ten-times to fifty-times on a per square foot basis for companies in the same industry. For example, real estate brokerage offices, which have 10,000 square feet of office space, may have assessments ranging from $10,000-$500,000. It seems unlikely that the computers and furniture in one brokerage office are 50 times as valuable as those in a competitor’s firm on a per square foot basis.Appraisal districts tend to accept the assessed value rendered by property owners. Many large companies render using fixed asset listings. Appraisal districts use the cost basis information and the Comptroller’s schedule to calculate the “market value” for property. The valuations for these rendered accounts tend to grossly distort the actual value of these properties. Property owners who do not render have values on the lower end of the range of value. While it seems intuitive that appraisal districts would penalize owners who do not render by sharply increasing their assessed values, the practice is the opposite. Appraisal districts tend to reward property owners who do not render by leaving their assessed values at modest levels. This creates a disincentive to render. It also unequally taxes property owners who render with a fixed asset listing. These factors have caused a high degree of dispersion in BPP assessed values.How To Appeal On Unequal AppraisalContrary to popular belief, it is possible to appeal BPP utilizing unequal appraisal, a concept that is fairly new. Most property tax consultants and large property owners have not considered or utilized unequal appraisal regarding BPP. Appraisal districts are resistant to the concept of appealing BPP based on unequal appraisal. (It is inappropriate to tax property owners who render using a fixed asset listing at the highest level, based on utilizing the Comptroller schedule, when allowing property owners who do not render very lean levels of assessment.)Preparing an appeal based on unequal appraisal for BPP is simple and straightforward. Start by obtaining information on the assessed value, and amount of office space/manufacturing or warehouse space for property owners similar to the subject property owner. This is typically done by using companies with the same Standard Industrial Code (SIC) as the subject property owner. You can obtain this information by sending an open records request to the appraisal district. When appealing, research the assessed value for your competitors. Compile data regarding the assessed value and building area for the subject and comparable accounts into a summary:
When should you appeal?Appeal annually on market value and unequal appraisal. To effectively appeal on these two options, research unequal appraisal based on assessment comparables on the appraisal district’s web site and evaluate the market value of your BPP. After reviewing both the unequal appraisal and market value options, determine your primary focus for appealing your BPP account. If neither market value nor unequal appraisal provides a basis for appealing your property taxes, you can withdraw the notice of protest or just skip the hearing.Tips for your hearing (Informal & ARB)Informal hearing· First meet with the appraiser and politely explain the basis for your adjustment. Give the appraiser a copy of your evidence and explain it in a methodical way.· The appraiser will review your information and the information he/she has available, and will then likely make an offer to settle. Consider the appraiser’s offer and explain why your evidence is better than his/her evidence, and again request your value or a value between your value and his/her value.· You will quickly learn the lowest value the appraiser is willing to accept. At this point, you need to either agree to that value or proceed to the Appraisal Review Board (ARB) hearing.· If you settle the appeal at the informal level, you will not be able to pursue an ARB hearing or a judicial appeal. However, it does resolve the issue in a timely manner.ARB hearing· Introduction of the two parties at the hearing
· Explanation of the hearing process
· Property description (address any errors in the description of your property after the appraiser’s description of your property)
· Property owner presentation
· Questions from the ARB panel members
· Appraisal district presentation
· Rebuttal and closing evidence from the property owner
· ARB announces its decisionSummary Points· Annual appeals will minimize your BPP property taxes.
· There are huge differences between the market value estimated by the Comptroller’s schedule and actual market value.
· Based on excessive assessments for BPP for companies who render using a fixed asset listing, a low percentage of property owners who render and the low assessed values for property owners who do not render, there are rich opportunities for appealing BPP by using unequal appraisal.

Should I Hire A Property Manager or Self Manage My Vacation Rental Property?

If you would like to begin renting your vacation rental property there are plenty of things you need to choose. One of the primary items to consider is if you wish to rent and promote your property alone or hire a property manager instead. When I first began renting my property I decided to rent and promote it myself. I have now been managing the rental area of my property for pretty much 6 years. I have marketed my property on vacation rental websites, collected my money through Paypal, created my rental documents and managed all renter contact via email and phone. For quite possibly the most part it hasn’t been too difficult. However, you can find an amount of stress I’d personally prefer to not deal with and sometimes I’m wondering if I market my property sufficiently. Either method offers you results however you may like one more in comparison to the other. Here is some information about managing the property all by yourself or working with a property manager.Self ManagedI have been a realtor for years and have worked with numerous property owners. I’ve also used services to rent vacation rental properties for family trips. There is actually a large number of property owners who manage their own property. I’m sure there are a variety of explanations why one may choose this method. Having said that I want to list my three reasons I decided to personally manage my property.Profit – If you manage your own property there’ll not be a monthly fee to a property manager for marketing and renting your place. Usually there is a set bill every month and when anything abnormally occurs with the property there’d be an extra fee.Control – Think about it, who doesn’t want complete control! The main purpose of my vacation property is to spend each available moment making memories with my family there. We merely rent the property to be able to pay for the yearly bills. It can be nice to choose who might rent your property to assure it will be taken care of while you are away. I haven’t always allowed the very best of renters stay at our property but for the most part we certainly have had great individuals that treat our property like it is their own.Marketing – I’ve been a salesman for as long as I can remember. Of course I believe there isn’t anyone who can market my vacation property to potential renters a lot better than I am able to. I am currently using an online vacation rental website but there are many other methods as well. You can make your very own website of the property blogging about its features. I’ve seen vacation rental properties for rent on Craigslist. Also, as I mentioned you are able to promote your property on any one of the large vacation rental websites located on the Internet today.Property ManagerIf you decide you’d just rather outsource the renting and marketing of your vacation rental property to a property manager make sure you ultimately choose wisely. As a realtor I’ve met various sorts of property managers and this choice can be the difference of renting your property or not. As I’m sure you’re aware, most vacation rental properties tend to be found by renters through use of the Internet. I rarely notice a property being advertised in the newspaper or a magazine unless it’s for a timeshare. It is vital the property manager of your choice is heavily associated with marketing his customer properties on the Internet. A good way to locate a property manager, perhaps even seeing user feedback, can be searching the term property manager after which include the city where your residence can be found as part of the search term. This is a faster way to obtain a quick directory of property management companies local to your vacation rental property city. Do yourself a favor and interview at the very least 3 of them to find out which one will be capable to market your property the very best and who understands your preferences. It is important you feel confident with the property management company you choose to hire. Don’t forget to verify most of the following items below prior to hiring a property management company to rent and promote your vacation rental property.1. Just how do they advertise heavily on the Internet? What other ways are they going to promote your property?
2. How do they interview potential renters? Do they contact you for final approval?
3. How do they verify the renters left the property as they found it?
4. How do they handle repairs when required for the property? Just what is their extra fee because of this service?
5. How much will they charge to rent your property on a monthly basis?If this article was of any value please share my website http://vacationwebsitereviews.com with others. A referral is the best compliment!