Good Property Management Keeps Bills Down

In keeping with last weeks blog on how to stay in your home we are going to take a quick view of the markets this week and then offer some articles on how to maximize your tax benefits and how to manage property if you now realize you want to rent rather than sell until the dust clears.

First a quick look at the markets this week:

MSNBC: Housing worst isn?t here yet. According to Richard Syron, chairman and CEO of Freddie Mac ?The mortgages written in 2006 in the sub prime market are probably the most troublesome. They haven?t hit the reset point yet on interest rates.?

Syon went on to say "These steps are focused on helping individual people, and it will help the market. But once you get one of these market dynamics going, you don?t reverse them without it taking some time .... Theyve got to play themselves out.? NOTE: This is the best wisdom on changing markets yet! You can talk about it all day long....but trends play out according to changing circumstances and can be inconsistent.

International Herald Tribune: The S&P Housing index was released and it is an index based on twenty cities. The famed Robert Schiller is involved in crating this index and "He said the numbers indicate "a widespread downward trend" that started at the end of 2006 and has extended into the beginning of this year." How Steep a Downturn? The index looking at ten major metro cities notes a 1.5% decline in sales of single family homes. Seattle and Portland are the lucky ones with modest price increases.

Freddie Mac: Weak home sales are keeping a lid on mortgage rates. The 30-year fixed-rate mortgage (FRM) averaged 6.16 percent down slightly from last week. Last year at this time, the 30-year FRM averaged 6.58 percent. The fifteen year FRM this week was 5.87 and down slightly form the week before.

Now for the good news: Seattle, Portland and Dallas saw rising prices... There are always minor trends within a major trend...in other words its still a local market. Relief is on the way, to be sure it isnt enough to turn a trend but we hope to keep enough bad news out of the markets to keep this downturn moderate and cyclical. Here are some of the important institutions helping to keep people in their homes:

1. Washington Mutual Inc., one of the country?s largest financial institutions, said it will refinance up to $2 billion in sub prime mortgages to help borrowers avoid default and foreclosure.
2. Citigroup and Bank of America have pledged $1 billion of mortgage financing to help sub prime borrowers who are facing the loss of their homes
3. Freddie Mac will buy as much as $20 billion in fixed-rate and adjustable-rate mortgages to help borrowers with high-priced loans keep their homes. Hopes are this should be in place by mid summer.

What if You cant sell Now

If your home or condo has lost value an you are willing to wait the market out, then its a good time to rent. generally, when sales are down rentals are in more demand since people have to live somewheres. Strong rental markets are making rental property increasingly lucrative. Keep in mind that managing property is really work. You have to begin to see your home as a cash flow investment and rent wisely using good tenant screening policy. Renting requires a working knowledge of your local rental markets and a good understanding of how to price your rental so that it rents quickly and at the right price. Too low and you will rent very quickly at at a loss....too high and it will sit on the market and you will lose months of valuable rental income.

Good Property Management Keeps Costs Down

Focus on fixed costs are where we think successful property management is made. Mortgages and Insurance are necessary but prices vary considerably. Always comparison shop these products and have agents bid against each other and keep more of your money. Yourpropertypath.com is a good place to get bids and have agents compete for your business

Taxes and tax credits are areas where savings can be had but you must know whats available. We found a few good articles that can serve as a tutorial. Please do take a look:

A Tax-break Tutorial For New Homeowners: By Bill Bischoff. While the cost of renting is generally a nondeductible expense (except for when part of the home is used for business purposes), homeowners can claim an itemized deduction for interest on up to $1 million worth of mortgage debt used to acquire or improve their principal residence. Ditto for interest on up to $100,000 of home-equity debt secured by their principal residence. Real-estate property taxes can be claimed as an itemized deduction, too. You also can generally deduct any points you paid (or the seller paid on your behalf) to take out the mortgage"

A Primer on Homeowner Tax breaks: Now for the tax-law catches your realtor probably never told you about. Don't worry: What's detailed below probably won't have you running back into the arms of your landlord. But it just might give you a more realistic expectation of how home ownership will affect your future tax bills.

Mortgage insurance Gaining Steam: "This time next year, some homeowners who pay mortgage insurance will have an extra deduction on their federal income tax returns."

"In recent years, many borrowers have opted to get around using the insurance by taking two loans: a primary mortgage as well as a second, "piggyback" loan in the form of a home equity loan or line of credit. The equity from the second loan fulfills the down payment of the first, and there are tax breaks on the interest of both loans.

But many piggyback mortgages have variable rates( see articles on mortgages and how to shop for the best rate at yourpropertypath.com) that fluctuate based on the prime rate, which has risen over the last year. The set rate for mortgage insurance has become attractive to homeowners aiming for predictable loan costs, Katkov said. There's also the lure of simplicity that the mortgage insurance offers, since borrowers only need to deal with one set of loan documents in that option, he added. "

Its your property

Property Management: Online Rental Applications Must Be Encrypted

If you have ever bought anything online, you will notice a little lock symbol that appears on your browser when you enter a secure shopping cart. When you click on the lock, a window pops up that shows the information about the company providing the SSL Certificate for that particular website. SSL stands for secure socket layer and indicates that this shopping cart is encrypted and is safe for you to enter your credit card information.

Some well known companies that provide SSL Certificates are Thawte, VeriSign, and GeoTrust. You will see the name of the company that is providing the encryption for this website and the date their security certificate expires. You should not enter any sensitive information if this security certificate does not exist.

Now take everything we just discussed and transfer the principles to the realm of an online rental application. All the needs for security and encryption still exist and many web developers or property management companies are unaware of this fact.

It is a good business practice to give prospective renters the opportunity to access a rental application through your website. There are 2 basic ways you can do this. The first is take your existing rental application and convert it to a .pdf file that customers can print, fill out, and either mail or bring in to your office. Then you do not have to worry about any of the security issues mentioned above.

If you do opt for an online form for gathering your application information, then we make only one recommendation. The form should be processed on a secure, encrypted page (with the lock symbol) and the information should be written to a database on your server. The form or information should not be sent through an e-mail to your inbox. The reason for this is that e-mail is not encrypted either and can be intercepted. Once again, you do not want sensitive information to fall into the wrong hands. That is why we recommend that the application information be written to your server and viewed through a secure administration panel.

This option costs more to implement than a simple .pdf application that can be printed out. It is important that you realize you have a responsibility as a property management company to handle prospective tenants' personal information with the utmost care and professional standards.

Jim is a web developer and programmer who works with his wife, Cari, in their full service small business web development company. We invite you to take a look at our portfolio of property management web sites and other web applications that we have developed. We specialize in serving property management companies that want to market and manage their rental listings online.

Rental Property Management Software

Property management, as the name suggests, is meant to deal with the proper management services and scrutiny of various properties. Property management is a particular discipline of defining and achieving targets in matters of properties. At the same time, its primary purpose is to optimize the utilization of resources such as energy, space, time, people, technology and many others.

To track the income and expenditures related to the holdings and rental properties, rental property management software solutions are ideal. Apart from this tracking of cash flows from the rentals, these software solutions facilitate the completion of the IRS Schedule E, come tax time. Most rental property management software is armored to do these basic rental property maintenance functions in a simple and clean way, providing a sturdy interface to support those tasks admirably. The software is also equipped to do documentation of expenses in a similar process.

A few benefits of the software are: automatic creation of the standardized supporting documents and analysis; time-saving to great extent in negotiating and approving leases; and helping the company with updated information on all ongoing lease negotiations

Some of the notable features of the software include sorting all kinds of deals by the virtue of status, leasing agent, property, unit or tenant. Most of the high quality and user-friendly software supports standard formats in MS Word and Excel. The supporting documents that are very important in matters of rental properties can be created and supported by the rental software. They are: lease agreement, construction estimate, and construction drawing.

Property Management Software provides detailed information on Property Management Software, Real Estate Property Management Software, Rental Property Management Software, Property Management Accounting Software and more. Property Management Software is affiliated with Healthcare PM Software.

How to Choose A Property Management Firm

When you are comparing the services and fees of property management firms it's a bit like comparing apples and oranges. How do you accurately evaluate the sum total of all the various fees and expenses so you can estimate your annual net revenue? Are there hidden charges and monthly administrative fees that reduce your income? What is a fair commission rate to charge? In Incline Village, the range of property management services and fee structures runs the gamut from bare bones to deluxe.

If you are perplexed and confounded by these issues, then you are not alone. It seems that many property management firms (especially in the vacation rental business) try to nickel and dime their clients to death with excessive charges for cleaning, maintenance, credit card fees, administrative charges, processing fees, the list goes on and on.

Some firms in Incline Village charge a monthly administrative fee on top of the commission that they earn for managing a property. One can make an argument in favor of charging monthly administrative fees for short term vacation rental properties as they require more hands on attention to paper work with guests always coming and going. But charging this type of fee to the owner of a long-term rental property when all the paper work is done up front when the lease is signed is merely a form of gouging and should not be tolerated.

Processing fees are another bone of contention. Why should an owner or an owner-guest pay a processing fee? Companies that engage in this practice are trying to squeeze every penny possible out of the people who are really their clients. If you, your extended family or your guests have ever been charged a processing fee for making a reservation to occupy your own property, then you should seriously consider finding a firm that has more respect for you as a client. Cleaning fees are another area that merits scrutiny. As a property owner you should not be forced to pay a cleaning fee every time you use your place, especially if there are no paying guests coming to the unit between your personal visits.

Also, you should not be required to pay exorbitant sums for the annual "spring cleaning" that many firms insist on doing. If your property is supposed to be cleaned thoroughly after each paying guest, then why does it take several hours and cost hundreds of dollars just to clean a 2 or 3 bedroom condo in the spring time? Are the cleaning services padding their bills? Should you as a property owner and client of the firm have excessive fees extracted from you just because someone at the management firm claims that it took X number of hours to do the work in a unit that should have been reasonably clean to begin with? If you're skeptical about the charges for "spring cleaning", then it's best to either do the work yourself or hire a reputable independent cleaning service. The place will look just as good and you will save substantial amounts of money each year.

It is not easy to find the right combination of great customer service, reasonable commission rates and high-quality care for rental properties. You can expect to find 2 of the 3, but finding all three things is very difficult. Since many firms in this business tend to experience high levels of staff turnover, finding a firm with a well-trained and stable pool of employees should be your first priority. Even if you have to pay a slightly higher commission rate, you will more than make up for it with increased bookings, better service and fewer problems.

On-line booking capability is another big issue, especially when you realize that searching on the Internet is rapidly becoming the research method of choice for both vacation rentals and long term rentals. Any firm that does not offer this service is way behind the times and should not even be considered. The Internet is a great tool for both marketing rental properties and managing the vacation rental business. Just having a web site with pictures and text is not sufficient in these competitive times. If you are working with a property manager who refuses to set up on-line booking by the time you are reading this article, it's time to change services and go with someone who cares enough about you as a client to market your property 24 hours a day on the Internet with on-line booking.

You can find more information about real estate and property management at http://www.InsideIncline.com.

Remember, when the rental office is closed, the only way that someone can book your unit is on-line via the Internet. If your property manager does not offer this service, you are losing business. Customers who search on-line normally want to book on-line and they will go somewhere else if they cannot book your property at the moment they are ready to make to a buying decision!

Don Kanare of Lakeshore Realty, Incline Village, NV is a former business consultant from the Bay Area who uses his entrepreneurial and problem solving skills to help his clients achieve their goals. Don received his Bachelor's Degree from Boston University in 1977 and relocated to the west coast shortly thereafter. Don is an avid fan of the Tahoe lifestyle and enjoys skiing, hiking and outdoor adventures