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Blog: Property Maintenance

Property Depreciation: Why the Tax Benefits Could Come Back to Bite You

When you purchase a new rental or commercial property with investment intent, you must allocate a portion of the purchase price to improvements and the remaining amount to land. The reason for this practice is that you cannot depreciate land, only improvements. This makes sense because dirt lasts forever.

Depreciation is the reduction in value of a property over time due to the particular wear and tear on the asset. Residential properties are depreciated over 27.5 years, while commercial properties are depreciated over 39 years.

This reduction in value is a current expense, yet no money comes out of your pocket. Sounds like a pretty awesome deal, right? You get to reduce your reported income by your annual depreciation expense without actually paying for anything!

But what is depreciation really? Do you think the IRS, our favorite government agency, would let you have it that easy? I’ll give you a hint: the answer starts with the letter “N” and ends with “O.”

Landlord Liability: Be Proactive with Maintenance Issues to Avoid Possible Lawsuits

Feb 11 2017
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As a rental property owner, you must have a solid understanding of your liability in regards to maintenance. You can be named as liable for negligence if you failed to keep the environment safe, if you knew of a hazard and didn’t take reasonable actions to prevent injury, or if that hazard caused damage due to your inaction. As such, approach your maintenance liability decisions as though you might present your decisions before a judge if a lawsuit developed.

Another factor to consider is that statutes may overlap or conflict with civil or criminal laws, and so it is always better to be safe than sorry. Even if the problem is caused by your tenant and they are responsible for the “damages”, you should be proactive and take care of the repair, then bill the tenant for their responsibility. This could cost you some money, but in the long run, the risk is not worth a possible lawsuit.

Five Simple Steps to a Rent Ready Home

Feb 03 2017
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Five Simple Steps to a Rent Ready Home

Many property managers and landlords believe that a quick sweep through the home prepares it for a new resident, but this is not enough as they are missing some crucial steps. Here are five simple steps to ensure that your home is in tip-top shape and ready for a new occupant.

Step One: Re-key the Locks

Yes, you collected the keys from the resident, but did they make spares? All outside locking doors should be rekeyed between each resident. Additionally, rotate the codes on any garage doors, access gates, exterior property gates, and mailboxes.

8 Winter and Annual Maintenance Tips for Landlords

As a homeowner, you know that preventative maintenance is essential to keeping your property in good condition — and it’s even more important when you own or manage a rental property. Your tenants can’t be expected to stay on top of all the home repair and maintenance tasks, so there are several items you should check off your rental management to-do list before winter sets in (even if your rental is in a warmer part of the country).

Prep your Property for Spring with this Action Plan

Feb 16 2015
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As rental markets heat up during spring and summer cycles, a healthy, green landscape can do wonders for attracting new residents.

A lush front lawn or bed of bursting color doesn’t come overnight or only after a few good rains. Getting the landscape in shape takes time, planning and patience – creating a road map for an attractive landscape is necessary long before the grass starts to turn green.

Six Steps to Prepare for Heavy Snowfall at your Property

Jan 16 2015
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Snow and other forms of precipitation in the Northeast are expected to rival that of a record-shattering year last year as winter gains momentum in January and February. Other parts of the country will be no doubt affected as winter begins to enter its stretch run.

For a home owner, a heavy snowfall can be particularly damaging and dangerous. November’s blizzard in Western New York that posted snowfalls up to seven feet took its toll on numerous homes and businesses. Collapsed roofs from the heavy weight of the snow were among the nearly $50 million in damages reported.

6 Fast Home Winterization Tips

Nov 02 2014
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Frigid, blustery weather that has already put parts of the country in a deep freeze is a reminder that the time is now for home winterization. When the mercury drops below 32 degrees, pipes can freeze and eventually burst, resulting in thousands of dollars in damage.

The Insurance Institute for Business & Home Safety (IIBHS) estimates that a frozen pipe that ruptures can cause more than $5,000 in water damage.

Getting Repairs Done to the Home You’re Renting

Oct 15 2013
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Chasing a landlord to get repairs done at a rental home is probably the biggest, most frustrating issue most tenants experience when renting.

You complain, the landlord assures you it’ll be fixed, no one shows up so you complain again, someone shows up but doesn’t fix the problem and the cycle seems to go on and on.

Avoiding Emergency Maintenance Calls

Dec 02 2012
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Now that Thanksgiving is just around the corner,  it’s time to take a moment and think about how winter may affect your property maintenance calls.

According to HomeAdvisor, the most frequent home emergency repair in 2012 has been for appliance repairs.  These appliance repairs often spike over the holidays and during cold-weather months, when they get heavier usage.

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If you’ve ever considered investing in a few rental properties in Philadelphia or Bucks County, PA now might be a good time. Prices are still low in Philadelphia, but have been on the upswing. According to the National Association of Realtors, the median price of an existing home in a US metropolitan area grew 13.7% between July 2012 and July 2013, the latest in a 17-month streak of year-over-year price increases. 

New landlords can choose from properties that are likely to appreciate and a large pool of potential renters.Licensed realtor Pat Mueller cites a few reasons for this trend: “Many families have lost their homes to foreclosure and are entering the rentals market for the first time in years. Mortgages are also harder to get now, so fewer people are qualifying for a new one.”The more skills you bring to the table to get into Houses for Rent in Philadelphia Philadelphia or Bucks County, PA and the more time you have to devote to your properties, the faster you can make a return on your investment. 

But investing in rentals can also be disastrous (or too stressful to be worthwhile) without expertise. Here are three professionals you may consult about your new rental properties, and what you can do to mitigate how much they cost you:Handyman:  You may need to hire a specialist for some work on your rental. If you need new outlets or new pipes, for example, hire an electrician, plumber or licensed contractor. Handymen usually tackle smaller, more manageable tasks, like:

  • Painting and paint removal
  • Drywall repair
  • Minor appliance repairs (fixing a leaky toilet or faucet, among others)
  • Installing tiling or flooring, moldings, windows, doors
  • Refinishing decks, cabinets and other wood items

When You Could Skip It: You could do any (or all) of these projects yourself if you have the time and interest in learning. Of course, this only works if you live relatively close to your rentals and are flexible enough to service them on short notice. And if you’re willing to respond to the occasional 5 AM basement flooding.

Average Savings: Any base rates or costs-per-hour vary from location to location in Philadelphia or Bucks County, PA , but nationally, you can expect to spend an average of $60 to $85 per hour for repair costs. It general costs less to hire an individual handyman than a handyman employed by a company. Expect an additional charge if your job requires a trip to the store for materials.

Resident Property Manager As the owner of a handful of rental properties, you may be able to manage them yourself, but if you want help, a single resident manager would probably be more cost efficient than a property management company. Resident managers may:

  • Serve as a handyman
  • Advertise vacancies in your units
  • Show apartments to prospective tenants
  • Review rental applications
  • Collect rents

When You Could Skip It: Again, the closer you live to your properties and the more spare time you have, the less likely you are to need a manager. The obligations of being a boss will also cut into the time you save on maintenance.

Average Savings: The national median wage for residential managers is just over $25 per hour. Research the wages in your community and adjust according to how much responsibility your manager will take on. 

Real Estate Agent: Once you’ve gotten your financials in order and done your own research on the neighborhood(s) you’re considering, you might contact a realtor to show you potential properties. You can also arrange for a realtor in Philadelphia or Bucks County, PA to show rentals once they’re ready to rent.

When You Could Skip It: It depends. Even if you’re a local, or have thoroughly researched the neighborhood(s) you’re considering, a realtor is a great resource for a first-time rental buyer. Realtors have access to data and statistics not necessarily available to the general public and first-time buyers may not know all the right questions to ask. Using a realtor to fill your Houses for Rent vacancies is less of a no-brainer, depending on your other time commitments or whether you plan to hire a resident manager who could do the same thing.

Average Savings: As a buyer of rental properties, as when buying your own home, sellers typically pay most, if not all, of the buyer’s realtor fees. In this case, Mueller points out there’s little reason not to work with a realtor. For help in filling your units in Philadelphia or Bucks County, PA, the services of a realtor would set you back between 10-20% of the unit’s rent per month.  Mueller recommends interviewing with several brokers before making your final decision to invest into Houses for Rent .

The Bottom Line: As a new landlord, you can’t necessarily control the flexibility of your schedule or the amount (and cost) of unexpected repairs to your properties. Rentals are a long-term investment. However, to maximize profits from your Houses for Rent, new rentals, you can buy close to home and start small. It is best to begin with just one or two properties. This will allow you to maximize the time you spend on your properties’ needs, and minimize the amount you’ll have to pay anyone else.

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