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!
I’m going to
New York renters would be the first to tell you that rents go in only one direction: up. But after a long and relentless climb to historic highs, the momentum has stalled.
With renters unwilling, or unable, to pay ever higher sums, rents have largely flatlined. And it seems we have come to the year of the renter’s market.
In Manhattan, Brooklyn and Queens, inventories and vacancies are up, and landlords are offering new tenants discounts, like several months of free rent and no broker’s fee. In the Bronx and Staten Island, rents are holding steady because those boroughs did not experience the same rapid rent escalations or volume of new development. But that could change when new rental buildings open in both boroughs this year and in 2018.
The biggest deals are happening at the top of the market, where some luxury developments are offering as much as four months of free rent on a two-year lease. But deals are to be had in older, less expensive buildings, too. Despite these concessions, some apartments linger vacant for months. Worried that a slowdown will continue, many landlords are not raising the rent when leases come up for renewal, and some are even throwing in perks like gift cards.
Many landlords and real estate brokers attribute the renter-friendly trend to an influx of new apartments: 11,514 new rental units came on the market in Manhattan and Brooklyn in 2016, and 13,340 are expected this year, according to Citi Habitats, a real estate brokerage. The large number of condominium apartments that investors have turned into rentals has added to the glut. These apartments are mostly luxury rentals, and too expensive for many New Yorkers. So tenants with smaller budgets are fanning out to neighborhoods like Crown Heights, Brooklyn, and Jersey City.
As property managers and owners you want to know what keeps tenants happy. And what keeps them around and also what can set you apart from the competition. This article will help you in your rental housing business. A new survey designed to help property managers and owners gain insight into what tenants care about the most in their apartments shows insight on:
- What will they pay more for?
- What drives them crazy?
- What makes them happy?
- What makes them sign a lease or renew a lease?
- What makes them move on from a property?
While making the decision to purchase and then rent out a property is one thing, the way in which you attract tenants to fill your units or homes is another. In fact, before you make the purchase, you should also be thinking about ways to entice users to fill your property's units or homes.
One of the services that we provide at Onyx Management Group consists of helping our clients find tenants. How do we do it? Well, we make a property look appealing to the point that an individual cannot say “no!”
Over the years, we have found many ways to help our clients make their properties look more attractive. Therefore, we decided to put together a list of a few tips that we believe will help make any rental property more attractive to prospective tenants.
Before the summer season begins, commercial property owners who have a pool on their property should be taking some initiative during the middle of spring to ensure that their pool is safe.
As a property owner, once a year you should have your pool inspected to guarantee that it still meets the local, state, and federal requirements.
So, the first thing you will need to get done in order to determine if it is swimmable is to give it an annual checkup!
\If you do not want to make your realty investment experience a bitter one, you must consider hiring a company for property management rentals. If you do all the maintenance work by yourself, and you will not be able to focus on the core issues of your business. Besides that, the work will also substantially inc