Evictions are annoying, but they are part of doing business as a landlord. Don’t panic when you need to do an eviction—just move forward with confidence and take care of the problem. Once again, we do recommend you contact an attorney to help you with your eviction, at least until you are confident that you can complete it correctly yourself.
4 Frequently Asked Questions on Evicting a Tenant
1. How long does an eviction take?
In most states, as long as everything goes as planned, an eviction takes about a month. However, in some “tenant-friendly” states, evictions can take up to six months.
Here are four quick-and-dirty reasons why, if you’re in the market for a residential property manager for your investment rentals, you should hire one who has a rental portfolio of their own.
The PM understands why it's important to control expenses and improve cash flow.
If your goal is to buy and hold long-term rentals, it’s likely that your focus is on generating a decent-to-good cash flow to pocket as passive income, or use to reinvest, or rely on to quit your (perhaps not-beloved) day job real soon. A PM who owns a least a few units and has had to spend money to fix them knows a few things about expenses—for instance, when it’s better to spend more money now to prevent large expenses in the future, or to spend less now to meet more short-term cash flow goals. They’ve seen the hit to their bottom line when they hired the cheapest plumber to fix the ceiling leak and then had to go back and hire the bestplumber to fix that fix. But they’ve also seen the cost savings in buying a lesser-quality product than they would for their own homes to maximize cash flow.
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.”
In actuality, depreciation is similar to an interest free deferred loan with no time restrictions. You see, when you sell a property that you have been depreciating, you have to pay a thing called “depreciation recapture taxes” at a 25% rate. This 25% rate is multiplied by the total value of depreciation you have taken over the property’s hold period. So the income you are “sheltering” each month really isn’t being sheltered like you think it is, as you will eventually have to pay a portion of it back. Without prior knowledge (or having a good accountant), you could be in for quite the surprise!
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Let’s talk about the common tasks you might perform as a landlord. This will give you just a sample of the kind of tasks a landlord is responsible for.
64 Tasks Landlords Are Responsible For
- Preparing a property to rent
- Collecting forms needed for the businesses
- Placing ads in the newspaper and/or online
- Placing signs in the yard
- Determining fair market rent
- Determining the security deposit amount
- Setting minimum qualification standards
- Taking phone calls from prospective tenants
- Pre-screening tenants
- Scheduling appointments to show properties
Are you maximizing revenue from your real estate investments? If you have rental property, there are literally hundreds of ways to make extra money. I often thought if I had 20 properties to take care of that it would be a full-time job for someone, possibly me. In addition to the rental income, at a time I was running a small lawn care company, trying to generate enough money to live on. That mowing, plowing and miscellaneous maintenance generated capital to kick-start my seed money for real estate investing. Now that I have my rentals, I always look to save money or generate new revenue streams from my tenants. I am not looking to gouge them, but for ways to leverage my skills and their money.
14 Clever Ways to Maximize Revenue From Your Rental Property
1. Manage your own property.
If you can manage your property at all, this is a huge savings. A property manager will get up to 10% of the rents just to take and make calls. You can do that from anywhere in the world as long as you have cell service. You need to be able to take a call and make a call. Save this 10% of gross rents and increase your total profit by as much as 20%+.
For many people, being a landlord is a rewarding and profitable experience, but if you are new to the rental real estate business, you might have discovered that managing a rental property is not a simple endeavor. Taking the time to gain a basic understanding of some key landlord responsibilities, property marketing tactics and areas of the law will go a long way in helping you find (and keep) a tenant, effectively manage your rental and avoid the most common landlord mistakes.
In this guide, we’ve compiled several tips for new landlords to help you succeed and get the most out of your real estate investment.
All “buy and hold” real estate investing follows the same, simple equation:
rent collected – expenses = profit (or loss)
Lowering expenses increases profit, and investor/owners like you work hard to tame expenses. You can insulate and install energy efficient lighting and timer thermostats to lower your utility costs. You can refinance your mortgage to lower your monthly payment. But what about your property taxes?
The lease controls the duties of both landlord and tenant. At a minimum, this rental form will:
List all of the occupants of the rental property. Each adult occupant should be listed as a tenant;
Set out the amount of rent that is owed, and how the rent is going to be paid. Late fees, bounced check charges, and other provisions will be included to encourage on-time rent payment. Additionally, provisions will spell out security deposit terms;
Vacancies are the top profit killer that rental property owners face. If you want to avoid the financial pain of a prolonged vacancy, take a minute to see if you are making any of these mistakes:
Landlords need to keep an eye out on their real estate investment properties just as much as the property management firm does, and while it is the job of the property management firm to handle certain aspects of the building, it is up to the Landlord to keep tabs on tenants, contracts and the overall state of their real estate properties. A few things Landlords should be doing:
1. Always Screen Tenants
Never rent out space to anyone before checking credit history, references, and background. Inconsistent screening and tenant selection too often results in problems — a tenant who pays the rent late or not at all, trashes your spaces, or lets undesirable people move in. Use a written rental application to properly screen your tenants for warning signs.