Greater Baltimore Property Management Blog

Removing the Red Tape Episode 1

System - Monday, August 8, 2022

Are you a Real Estate Investor or maybe an Enthusiast looking for information from credible thought leaders to make better decisions, get better returns, and reduce risk. Well you have came to the right place!!! Introducing a Special Podcast where a Professional Real Estate Investor Coach (Nat) and Bad Ass Property Manager (Neek) collab on their journey in playing Monopoly in Real Life! As they say on this Tube, please please...like, comment and Subscribe!

Why should I hire a property manager?

System - Monday, July 25, 2022

It's a question I hear quite often so I thought I should address it.

Starting with the basics... what's the goal of investing in real estate?  It boils down to securing an additional income stream.  Clearly, there are risks involved, as there are with any investment.  So, the only reason we should do it is if we can reasonably believe it will provide us with more income... and a source of income that has historically been pretty secure (as long as we do it right).  Unfortunately, like many investments, if we do it wrong, there can be substantial losses involved. Ugh! I knew there was a catch!

Okay, so what does it mean to "do it right?"  Well, a few basic things that actually cover a lot.

  1. Follow the numbers
  2. Follow the rules
  3. Manage expectations

Following the numbers starts before you invest.  You need to make sure your investment makes financial sense from the start.  We'll assume that you've already covered this part, since you're already a property owner and you're wondering about hiring a property manager.  Alright then, you also need to make sure you have enough cash set aside to handle emergencies.  Unfortunately, our imperfect world catches up with us from time to time and they do happen.  But don't worry; with proper planning and a well-designed maintenance program, we can minimize those expensive occurrences.  Hey!  That brings me to my first reason for hiring a property manager!  Professional property managers have this covered and they do it in a way that promotes the longevity of the asset as well... so that equals fewer emergencies on a well-maintained asset that can continue generating income over the long term.  Nice! Right?  And it doesn't stop there. The "numbers" also involve staying current with the rental market.  Many private landlords fall behind on rents because they don't keep up with their rental markets.  Sadly, this is an often unseen and unrecoverable loss.  A professional property manager maintains a keen awareness of the local rental markets and knows when to raise rents and what property conditions, characteristics, and decor lead to the highest rents.  Further, they also know what is "too much" for a given area such that the additional expense is unlikely to yield additional income.  Clearly, this is valuable information to have at your disposal when you're renting a property.

Now for the "rules."  Oh, the rules... so many rules!  There are a lot of laws and regulations that must be followed when you're renting real estate.  And while they often create burdens for good landlords, it's worth noting they were designed to try to protect tenants from unscrupulous landlords (which still do exist in many areas).  What this means is that, because of the unfortunate actions of a few bad apples, the costs associated with violating the rules can be pretty high.  This could easily reduce or eliminate the income on which we were counting from our properties.  So, what are these "rules?"  Wow!  It seems like an almost endless list, but it involves:

Security deposits, notifications, maintenance, lease structure (what's allowed; what's not; and what's nice to have to protect the owner), inspections and property access, home safety, rent increases, rent court documentation, subsidizing agency rules (that's a whole other topic by itself... whew! But we have you covered by clicking here )... the list just goes on and on.  And in many jurisdictions (Maryland included), each violation of these rules can lead to stiff financial penalties that can add up to huge losses.  You need someone on your side who not only knows the rules but has processes in place to ensure they are followed.  In short, it's a good idea to have a professional property manager working for you.

So what can you expect from a property manager? Well, as I mentioned above, you can and should expect a good plan for the numbers and a good plan for the rules.  You can also expect your property manager to hold your tenants accountable for following the rules on their side as well.  But, unfortunately, those "endless rules" also cover the relationship between the landlord (or property manager) and the tenant.  So, there are legal and practical limitations on the enforcement of rules on tenants including specified processes that must be followed.  I often get asked by owners, "Why don't you just do this...?" and I must explain that doing so is a violation of the law (you know, those "endless" rules I mentioned above) and would be more costly than following the defined legal process (which, unfortunately, almost always takes longer... Ugh!).  So, it's important to know that, while property managers are not miracle workers and cannot solve every problem, they are trained professionals who understand the business and can help you navigate the pitfalls and market changes in a cost-effective way.

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24 Totally Awesome Life Hacks for Landlords

System - Wednesday, June 1, 2022

1. Never Forget a Paint Color Again

Try to use the exact paint color/brand used for every rental lease agreement. This way, you will always know what paint was used when the tenant moves out and the property needs touching up! Also never use flat for rentals or you will find yourself hearing complaints and paying to paint the entire unit on every turnover!

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No need to remember what color each place is painted that way, and no partial gallons of leftover paint sitting around – it just gets used on the next rehab.  We also use the same color on both walls and ceilings, which allows the painter to “spray” the entire unit rather than roll, cutting down the costs significantly (tip: choose a neutral color if you are going to do this. No one likes a dark ceiling!)


2. Save Money on Mini-Blinds

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We like to make sure all units have clean, white mini-blinds in every window. When buying those miniblinds at Walmart or Home Depot, they typically cost around $4 for blind up to 36″ in width and $20 for blinds that are wider than 36″. Rather than spending $20.00 on each window for blinds, we simply use 2 blinds, side by side. Not only does this still look great for half the cost, it also makes it cheaper to replace just one side in the future if a blind gets damaged.

3. Forget the Mini-blinds Altogether

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While I love using mini-blinds, they do get destroyed easily by kids and pets, plus they are a nightmare to clean. Put up a 99-cent curtain rod and some cheap curtains from Goodwill or eBay (like $4). This way, there are multiple benefits:

  • Cheaper than the $8 mini-blinds for every window.
  • Makes the place look nicer and more of a home feel.
  • When the tenant departs they can be washed and rehung – no more throwing away damaged miniblinds that wind up in a landfill.  Then you don’t have to buy more mini-blinds either. Better for the environment and saves money on turnover.

4. Easy, Low Cost Carpet

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I’ve tried a lot of different methods for getting carpet installed – from doing it myself to hiring contractors on Craigslist. However, for me, nothing has come close in terms of cost or convenience to just have Home Depot install it. In my area, Home Depot’s contractors will usually install a whole house of carpet for $97 (flat fee) if you buy the carpet through them. Carpet prices vary, but I typically spend under $1.00 per square foot for the carpet and choose the “72 hour guaranteed install” option. It is easy, simple, and cheap. Plus, I can order it, schedule it, and do 90% of the work online. 

5. Angry Tenants+Hollow Doors=Easy Fix

Maybe I just live in an angry part of the world, but I have a real problem with holes getting punched in hollow-core bedroom doors. Maybe it makes them feel more powerful knowing they can punch through 1/16″ thick piece of cardboard.  However, I’ve discovered a great fix for this.  Rather than replacing (or trying to patch… which never works), just buy a $6 mirror at Wal-Mart or Home Depot (they are about 4 feet long and 12 inches wide, like this one) and screw it to the door. Not only does it hide the hole, it makes the hallway look larger and ads some decoration to a boring space!

If you have a bad spot on the bottom half of your interior doors just go buy 2 cheap square metal vents (look like hvac return covers) and cut out the square almost the same size to fit one on each side of the door. It also helps airflow in the home.

6. Replace Flooring the Quick and Easy Way

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If you have ugly vinyl flooring in a kitchen bathroom, or anywhere else, the demo can be expensive and messy. Instead, just install a floating vinyl right over the top!  My favorite flooring is called “Allure” made by TrafficMASTER and it comes in both a wood design and tile design. It works in the kitchen, bathrooms, or anywhere and anyone can install it in just hours. I can’t recommend this stuff enough!

I actually have actually begun to install it through entire homes, both for aesthetic reasons and because it lasts forever. This stuff can withstand kids, pets, spills, and anything your tenants throw at it.  It runs about $2 a square foot at Home Depot.

7. Appliances Looking Bad? Don’t Replace, Repaint!

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I learned this trick from a local appliance repair company.  If you have a stove or refrigerator that is showing signs of age, usually with small rust stains shining through, a $5 can of “appliance paint” from the hardware store can make your appliances look as good as new. I always keep a can of this handy when turning over a unit and am continually amazed at how great it works!

8. No More Slippery Stair Treads

If your rental properties have wood steps, it is easy for those steps to get slippery after rain. For the safety of your tenants (and to reduce your risk of being sued!) nail down strips of roofing shingles on your stairs with roofing nails. Trust me – it actually looks great (no one will know it’s a shingle) and is extremely cost effective.

9. Appliance Sale!

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Appliances go on sale at the big box stores around Christmas, Thanksgiving, Memorial Day, Labor Day, and the Fourth Of July, so take inventory each year of what you need and plan your purchases around those holidays. (The same is true for paint!)

10. Quick, Easy, Cheap Lock Changes

Several BiggerPockets members recommend using either KwikSet Smartkeys, which allow you to quickly change a lock in just minutes, or LandlordLocks.com, which allow you to change the lock cylinder easily and for around $5 each time.  

11. Use Apps to Simplify Your Life

Use those portable scanners that can quickly take receipts, leases, invoices, checks, etc and turn them into digital docs; Use tracking mileage apps, the flashlight app, and a Voip service — so voicemails can be delivered as files to your email inbox. 

12. Save Your Cabinet Bottoms

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“Put scrap vinyl flooring under the sinks and curl up behind the plumbing.  This way, if there’s a sink leak, it’s not ruining the bottom of the cabinet.  If the tenant has a cleaning supply spill, it’s not ruining the bottom of the cabinet. It also looks pretty nice too.” 

13. Store Your Documents Online

“Use Google Docs so you can access your rental contracts at home or the office – easy and free!” 

14. Protect Your Walls Above the Shower

“I like to put small vinyl door stoppers on the walls above bathtubs. They let tenants know exactly where to put their shower curtain rod, and they also protect the walls from repeated installations.” 

15. Money Saving Tip for Agents

“If you’re a licensed agent buying a rental for yourself, you probably don’t want to take a commission.  Instead, you should consider rolling the commission into the purchase price as a credit/discount.  In other words, if you’re buying a property for $100K and are entitled to a $3K commission on the purchase, ask them to knock the purchase price down by $3K (to $97K) instead. Commissions are taxed at ordinary income and profits when you sell the rental are taxed at capital gains rates. So, you’ll save money on taxes by taking the profit on the back-end (when you sell) than on the front-end (as a commission). Two caveats:

  1. If your marginal tax bracket is lower than your capital gains rates, you can ignore everything above.
  2. If you plan to hold the rental forever, you’ll likely be able to earn more on the commission reinvestment than what you’ll save in taxes (time value of money). But, if you’ll be selling in fewer than 5 years, rolling it into the basis is probably a better investment.” 

16. Easy Tenant Retention Ideas

Here are  several great tips for keeping your tenants happy and paying!

  1. Send birthday cards to each tenant with a $5 Starbucks card
  2. Send a postcard to each ‘door’ once a quarter, asking them if there’s anything I can do for them.
  3. On a tenant’s lease anniversary, give them an ‘upgrade’ of their choice, within reason. It’s usually something you would do when they move out anyway, you just get to do it with them there. Carpet shampooing is a favorite!

17. Keep Things The Same

“We use standard paint colors, the same tile, same faucets, same toilets, same door hardware, same shingles, same ceiling fans etc on all of our rentals. When we need to do repairs, touch-ups etc it is obvious what the specs are. Leftovers don’t get wasted, just stored until needed.” 

18. Automatic Lease Extensions

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Lease clause that renews leases for another 12 months with a built in rent increase. Lease clause allowing tenant to buy out lease at any time for a specific dollar amount (

19. How to Keep Cats Out of the Flower Beds

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“If you have cats in the neighborhood who have discovered your planting beds as a good place for their deposits, lay down chicken wire mesh on top of the soil and cover it lightly with mulch.  It is the only deterrent that has worked for us.  Plants can still be planted by cutting a spot in the chicken wire mesh.  You or your tenants can also place potted plants on top of it.  The cats try scratching once, get their claws caught on the wire and won’t come back.”

20. Easy Lease Signing and Storage

“Use Docusign for lease signings and file them away in Dropbox.” 

21. No More Broken Water Heaters

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“When you buy a property, if water heater is more than 2 yrs old then just go ahead and replace with a new one, sell the old one on Craigslist and you don’t get the 2 am call that unit is flooding!

22. No More Broken Cabinet Drawers

Take out and flip over your kitchen drawers (bottom of the drawer facing upward). Take liquid nails or adhesive spray and apply the adhesive to all four inner creases where the drawers meet.  This will make the drawer stronger and should not break for years to come. 

23. Brighter Units

If you want your rental appear brighter and more appealing to renters.  Replace all the light bulbs in the home with the clear light bulbs that are usually meant for bathrooms. Renters will subconsciously remember your unit over the rentals that had poor light due to a cheap 40 watt bulbs.

24. Hire a Property Manager!

Researching Property Management Companies?
PropertyWize is the best in the industry!We are committed to making you a successful investor. Our team wants to see you get a better return on your rental property. We know how to increase your profits all while decreasing your stress and frustrations. Our proven systems, and use of cutting-edge technology, sets us apart. Being a landlord is hard work. Put our experienced team of 10 individuals to work for you. Schedule a 30 minute consultation with an Experienced Manager Today!

Why You Should Hire a Reliable Property Manager when you invest out of state

System - Tuesday, March 1, 2022

Buying and owning property is rarely easy or simple. When the property in question is in a distant location, the challenges multiply. Nevertheless, investing in out-of-state property might seem appealing if you live in an area where real estate is expensive. It might also be attractive if you already own your home but want to diversify your investments.

Regardless, here are the issues to consider before you decide to take the plunge.

Proximity And Access: This one is a bit of a no-brainer. You shouldn’t hire anyone to manage your property who’s not situated close enough to it that they can respond to maintenance emergencies at a moment’s notice. The closer they are to your property, the better. If they’re not managing other properties right in your neighborhood, they won’t be a good fit.

Legal And Local Knowledge: As we mentioned in previous articles, property management without a comprehensive understanding of local real estate laws and regulations is a recipe for trouble. You could end up on the wrong end of a lawsuit if you don’t make certain that your property manager knows the ins and outs of region-specific rules. These things change over time, which is why your property manager will need to stay up-to-the-minute current on all developments so that you don’t have to.

Proof Of Work: Without the property owner nearby, an unscrupulous management company might try to say they’ve performed certain tasks they actually haven’t. And if you can’t rely on them to provide clear proof that they’ve done the work they claim to have done, you won’t know one way or the other. So, make sure at the outset of your arrangement that you’ll receive hard evidence every time they walk the property or perform repairs. Dated pictures of recent inspections are a great place to start. “Before” and “after” pictures of repairs can also help make sense of the amount you’ve been billed.

Investing particularly for low price of entry and high promised yields is very attractive. But the process is not as simple as it may seem, so proceed with caution. If you keep these rules of thumb handy, you may find a reason to travel outside your local market for higher returns.

Key Take Aways

• Buy in a town you know, or get to know the town before you buy.
• Finding a property management team and a maintenance worker are as important as finding a real estate agent.
• Don't just tour the property. Get an inspection.
• The cheapest the cost of the firm is not a good indicator of value. Check reviews!!

Researching Property Management Companies?
PropertyWize is the best in the industry!We are committed to making you a successful investor. Our team wants to see you get a better return on your rental property. We know how to increase your profits all while decreasing your stress and frustrations. Our proven systems, and use of cutting-edge technology, sets us apart. Being a landlord is hard work. Put our experienced team of 10 individuals to work for you. Schedule a 30 minute consultation with an Experienced Manager Today!

5 Major Benefits Of Hiring An HOA Management Company

System - Monday, July 5, 2021

The benefits of hiring an HOA Management Company can range from improved access to community management experts to the availability of HOA systems already in place to serve your community. Working with an HOA management company benefits not just the community development, but the HOA board, too.

When deciding between the costs and benefits of hiring a professional HOA management, consider the current capacity of your current board. Chances are, your elected board member could use a little help when it comes to the day to day responsibilities of running your association. Why not look for a trusted partner for your community? 

Why Hire An HOA Management Company? 5 Reasons You Should

Most of the reasons why an association management company benefits the HOA board and community they work with are centered around the fact that companies like them specialize in this line of work. Extensive experience, wide access to community management resources, and a broad range of professional contacts are only some of the benefits of hiring an HOA management company.

Smaller communities may be able to get by with a self-run HOA board, but once the development grows into a mid-sized community, the workload can increase exponentially. Mid-sized to large communities will require the attention of a full-time HOA staff. And at that point, you need to start weighing the costs and benefits of hiring a professional HOA management company to ensure the same level of service.

Some types of communities can make extensive use of the benefits of hiring an HOA management company that specializes in the niche. High-rise condominium developments, for example, require specialized knowledge in dealing with high-density living areas and the maintenance of a high rise structure. Retirement communities, likewise, have an entirely different set of requirements compared to single-family developments.

Think of the special needs of your community in mind as you consider the benefits of hiring an HOA management company:

1. When You Need Third-Party Financial Administration

One of the biggest pressures that elected HOA board members have to deal with is the financial side of running an HOA., especially so for board members that need to explain a new round of fee hikes to neighbors and friends, or worse, collect overdue assessments from residents they personally know.

That’s where one of the biggest benefits of hiring an HOA management company comes in.

An HOA management company helps with these types of transactions, and both sides can rest assured that an outside and independent company will not have a conflict of interest. As long as the company is fairly enforcing the policy of the HOA board, even delinquent payers will likely understand that there is no personal interest involved when the company is only doing its job of collecting payments.

2. When You Want to Maintain a High Level of Community Appeal

Many communities pride themselves on the level of visual harmony and aesthetic appeal that their development has maintained for itself. What is hidden behind the flawless landscaping and beautiful architecture, however, is the tremendous work that goes into keeping the community well-maintained. Oftentimes, this work requires the expertise of vendors specialized for certain types of maintenance services.

One of the benefits of hiring an HOA management company is the broad range of vendor contacts they have. A competent HOA management company can connect your community with reliable vendors that offer quality maintenance services. Over the long term, having this high level of maintenance service can translate to lower repair and replacement costs, aside from making your community a highly desirable place to live in.

3. When You Need Legal Expertise

It would be great if most elected HOA boards can include a resident who is well-versed in the current laws applied to an HOA. Most board members are unlikely to have a sufficient background when it comes to legal issues that can potentially affect the association. One of the main benefits of hiring an HOA management company is access to a legal opinion that you can use as a guide for your board decisions.

A professional HOA community manager is likely familiar with laws and court decisions that can affect the development. Even if they are not immediately familiar with the legal issue at hand, a typical HOA management community will have access to legal resources and professional contacts that they can refer to.

4. When You Need to Put Up HOA Systems

Putting up the appropriate HOA systems for managing the day to day responsibilities in your association is a must if your board is to function efficiently. In most cases,  most board members will not have the right background to implement these information systems. The investments involved in software, systems, services, and devices, can easily run into thousands of dollars and can take years if you’re implementing a system from scratch.

Established systems and technology vendors are just a few of the benefits of hiring an HOA management company that can save you a ton of costs. Using a prebuilt HOA system will also get your association up and running in less time, too.

5. When You Need to Expand Your Connections

Running an association is a group effort that involves everyone in the community as well as those outside it. Certain things are best left to the experts, and an HOA has no shortage of those. Landscaping, maintenance, law enforcement, condominium building management — all those require the extensive experience of vendors and agencies.

An HOA management company can give you valuable connections to all those and more. Perhaps the biggest benefit of hiring an HOA management company is the wealth of expertise and resources they have at hand, and a professional community manager can put all those to work for your neighborhood.

Work with an HOA Management Company You Can Trust

Having a successful community is always a work in progress. The HOA board should make sure they hire the right people to help them manage the community effectively. There are many benefits of hiring an HOA management company, given that the HOA board chooses the right one. If you want to know more about finding the right fit for your community’s needs, don’t hesitate to talk to us.

Researching Property Management Companies? 
PropertyWize is the best in the industry!We are committed to making you a successful investor. Our team wants to see you get a better return on your rental property. We know how to increase your profits all while decreasing your stress and frustrations. Our proven systems, and use of cutting-edge technology, sets us apart. Being a landlord is hard work. Put our experienced team of 10 individuals to work for you. Schedule a 15 minute consultation with an Experienced Manager Today!

2021 Property Management Trends

System - Friday, January 8, 2021

This past year has been a difficult one for landlords. As the COVID-19 crisis has impacted the entire country, landlords have dealt with a variety of issues including shifts in housing patterns, a federal moratorium on evictions, and a need for implementing new procedures and protocols to keep properties and tenants safe. Here is a look forward to 2021 for landlords. 

As a new year looms and the COVID-19 vaccine rollout is underway, many landlords are optimistic about what 2021 will hold. While there is still much uncertainty as to what the next year will look like, there are a few trends that landlords can anticipate and plan for. Here are a few to keep in mind. 

Renters will Continue to Leave High-Density Areas for the Suburbs

One major trend of 2020 has been renters leaving high-density urban areas for the suburbs. The combination of so many employees working remotely and the loss of many perks of city living – like restaurants, events, and amenities – has caused many renters to look for a suburban rental with more space and a yard. 

Describing this trend, Stuart Miller of Lennar says, “There’s no question that there are people who are fleeing the cities…..There’s no question people are rethinking whether they want to be in high rise rentals with common spaces as amenities vs. having a home of their own with a backyard.” 

This trend will likely continue during 2021. Even once there is widespread distribution of the vaccine and a loosening of restrictions in cities, it’s likely that this trend will continue as more and more companies shift to having employees work remotely. This will mean that there will likely be reduced demand in urban areas with a simultaneous increase in demand – and rental prices – for rentals in suburban areas

There will Continue to be a Rise in Tenants Unable to Pay Rent

While the federal eviction moratorium was initially set to end on December 31, 2020, it will likely be extended through January 31, 2021, as part of the most recent stimulus package. However, even when it is lifted, landlords will see an increase in tenants unable to pay rent as there are still millions of Americans out of work. 

Hopefully, joblessness will continue to decline and will decrease dramatically after the widespread rollout of vaccines. Until then, however, landlords should anticipate an increase in tenants unable to pay rent combined with federal protections to help support these individuals impacted by COVID-19. 

The Rental Market Will Rely More Heavily on Technology and Go Contactless 

One major shift in 2020 has been a rise in rental markets going digital. Landlords and property management companies have worked to go contactless, setting up self-showings, online applications, e-signature services, and contactless rental payments. 

This is a trend that will likely continue into 2021 and will remain even after the COVID-19 crisis has passed. These systems enable property managers and landlords to be more efficient and to more effectively handle tenant turnover and property management. 

If you haven’t done so already, it’s a good idea to work towards going contactless by putting all forms online and utilizing an e-signature service. While this might sound daunting to some, by simply getting an ezLandlordForms Lease, landlords can instantly get access to all necessary, state-specific forms online as well as ezSignature and ezCloud storage. 

Conclusion

As we enter 2021, the end of the pandemic is in sight. That said, it will continue to impact rental markets throughout the year and likely into the following year. Uncertainty about the timing of vaccine distribution, the potential for new federal regulations, and the potential for long-term shifts in the rental markets leaves many questions about what the year will hold. 

Looking forward to 2021 for Landlords, they should go into the year planning for some of the shifts that seem likely while also anticipating some surprises and the need for flexibility as the year unfolds. For help with the tools and resources needed to be successful this year, visit ezLandlordForms or contact our team.

Article URL: https://articles.ezlandlordforms.com/landlord-and-real-estate-news/what-2021-will-look-like-for-landlords/?utm_source=automated-mailings&utm_medium=email&utm_campaign=newsletterjan

Researching Property Management Companies?
PropertyWize is the best in the industry!
We are committed to making you a successful investor. Our team wants to see you get a better return on your rental property. We know how to increase your profits all while decreasing your stress and frustrations. Our proven systems, and use of cutting-edge technology, sets us apart. Being a landlord is hard work. Put our experienced team of 10 individuals to work for you. Schedule a 15 minute consultation with an Experienced Manager Today!

How Do I Transfer Title of a Property From a Person to an LLC?

System - Tuesday, November 24, 2020

For owners of rental or investment real estate, it’s common to form a limited liability company (LLC) and transfer title to the property from the individual owner to the LLC.

Transferring property to an LLC can limit your personal liability if someone is injured on the property and files a lawsuit against the property owner.

People who own multiple rental properties sometimes form a series of LLCs to insulate each piece of property from liability claims involving other properties.

Here are eight steps on how to transfer property title to an LLC:

1. Contact Your Lender

Transferring a real estate title to an LLC doesn’t transfer the mortgage. You personally are still obligated to make the mortgage payments on time. In addition, many mortgages have a “due on sale” clause, which means that if you transfer ownership of the property, the lender could require you to pay the full mortgage amount.

Your lender may be willing to allow you to transfer property title to an LLC that you own, as long as you remain fully obligated on the mortgage. Your lender could also require you to refinance the mortgage with the LLC as a borrower. Unless your LLC has an established income and credit history, you will also have to sign a personal guarantee that you will pay the mortgage if the LLC cannot. Finally, the lender could enforce the due on sale clause, requiring you to pay off the mortgage and seek new financing. You should understand your lender’s requirements before you try to transfer the title.

2. Form an LLC

You form an LLC by filing articles of organization with the agency that takes care of business filings in your state. You can form an LLC online or in person.

3. Obtain a Tax ID Number and Open an LLC Bank Account

If your new LLC has more than one owner, has employees, or meets certain other requirements, you must obtain a Federal Tax ID Number (also called an EIN or Employer Identification Number). You can do this yourself by filling out a form on the Internal Revenue Service website. Even if it’s not required, you may need a tax ID to open an LLC bank account.

Once you have a tax ID number, you can go to a bank and open an account in the LLC’s name. A separate bank account helps keep your LLC money separate from your personal finances. If you don’t maintain this financial separation, you risk losing the liability protection that your LLC provides.

4. Obtain a Form for a Deed

You can find a deed form at your county recorder’s office or on the Internet, or you can have an attorney prepare a deed for you. Deed requirements vary somewhat from state to state, so be sure you are using a deed form that is specific to your state.

There are two kinds of deeds: warranty deeds and quitclaim deeds. When you purchased your property, you most likely received a warranty deed that included a guarantee that the title was good and free of any claims or interests by third parties. A warranty deed passes that guarantee on to your LLC.

If you transfer title through a quitclaim deed, you are simply saying that you are passing any interest you might have in the property to your LLC. The quitclaim deed doesn’t guarantee that the title is good, or even that you own the property.

Because of the protection they provide, warranty deeds are typically used to transfer property between unrelated parties. Experts disagree on whether you should use a quitclaim or a warranty deed to transfer a real estate title to your LLC. Many people use quitclaim deeds, but some prefer to use a warranty deed because it gives the LLC some remedy if there is a title problem and it preserves the chain of title to the property.

5. Fill out the Warranty or Quitclaim Deed Form

You are the grantor and the LLC is the grantee. Make sure you specify your name as it is written on your current deed, and use the full legal name of your LLC. You may be asked to specify the purchase price, or “consideration” paid for the property. If there’s no money being exchanged, you should consult your county recorder or state laws to find out the minimum consideration required for the deed to be valid.

6. Sign the Deed to Transfer Property to the LLC

As grantor, you will need to sign the deed, and your state may require that you sign in front of witnesses or a notary. Some states also require a grantee to sign, so someone will need to sign on behalf of your LLC.

7. Record the Deed

Recording the deed creates a public record of the property transfer. You record a deed by submitting it to the registrar or other agency that handles real estate records in your county or city.

8. Change Your Lease

If you’ve transferred property that you rent out to others, you should amend any leases to reflect that the landlord is now the LLC, not you personally. Rent should be paid to the LLC and deposited into a separate LLC bank account. Observing these formalities will reduce the likelihood that you could be held personally liable if something goes wrong.

Transferring property to an LLC is a simple way to reduce your personal liability for claims relating to the property. But a property title transfer should be only part of your strategy. It’s also important to contact an insurance agent and obtain adequate liability insurance to cover any claims that might arise.

LegalZoom can help you start an LLC quickly and easily. Get started by answering a few simple questions. We'll assemble your documents and file them directly with the Secretary of State. You'll receive your completed LLC package by mail.

Article URL: https://www.legalzoom.com/articles/how-do-i-transfer-title-of-a-property-from-a-person-to-an-llc

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We are committed to making you a successful investor. Our team wants to see you get a better return on your rental property. We know how to increase your profits all while decreasing your stress and frustrations. Our proven systems, and use of cutting-edge technology, sets us apart. Being a landlord is hard work. Put our experienced team of 10 individuals to work for you. Schedule a 15 minute consultation with an Experienced Manager Today!


Virtual Reality: The Future is Now

System - Monday, April 27, 2020

We actually started offering virtual showing tour in early 2019, mainly as an option for high-end luxury rental homes in order to provide visual access to prospects who are limited on mobility and find it difficult to attend traditional in-person showings and where we had an opportunity to attract out-of-state prospects who were relocating to Maryland. Nowadays, in light of the COVID-19 pandemic and with everyone practicing social distancing, virtual leasing and virtual 3D touring of rental homes has become more popular and even mandatory under the state of emergency. As a result, it was a no-brainer for us to immediately offer 100% online virtual 3D tours on all listed rental homes and to come up with innovative ways to attract, screen and successfully place qualified tenants regardless of pandemic restrictions. 

Digital leasing tools provide increased convenience for potential renters to view homes and allow our team members to focus more energy on serious and promising leads. With less physical showing, we actually have more captured leads, and faster and higher conversion rate. That’s a Win-Win (for our clients and our prospective residents)!

The required social distancing caused by COVID-19 shall soon pass into history, but by that time it will have changed our cultural acceptance to virtual showings; and the simplicity of virtual leasing will become a part of our new norm. 

In the past 6 weeks of our lockdown, we have experienced very positive results with virtual leasing and showings. We are helping to move our industry toward having every rental listing on the market upgrade to virtual tours, either by 3D interactive photos or video filming of a walk-through.  Here are the key benefits:

  • More Effective Marketing and Advertising
  • Interactive & User Friendly
  • Saves Time & Energy
  • Filters Less Serious Inquiries Out
  • Homes are Rented even while Social Distancing
  • Less Vacancy Days
  • During peak season average vacancy days has reduced 20-50%

The number of units we manage has increased 6 times in the past 4 years and our online ratings have remained exceptionally high at 4.9 of 5.0 across all major platforms. One of “secret sauces” is that we always listen to the market and rely on innovative new technologies to provide better experience and streamlined processes.  Virtual leasing and showing is definitely here to stay, and we want to share our success with you when you partner with PropertyWize®… the Team that has already Mastered this new way of leasing homes. 

Interested in a Virtual Leasing Make Ready Checklist to prepare your home for a successful virtual listing? Provide us your information below and we will send you the checklist.  ๐Ÿ˜Š

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The Cycles of Leasing- Yes itโ€™s a Real Thing just like Most Business Cycles! Why your rental stays...

System - Friday, December 20, 2019

 When is Peak Rental Season? 

Peak rental season is when there are more tenants looking for rental properties. This happens in the summer, specifically May to August.

When is Trough Rental Season?

Trough rental season is when there are less qualified tenants looking for rental properties and a lot of properties on the market.

Wondering why its extremely difficult for leasing between October- December 

  • It’s hard to move during the winter. For most of the United States, moving in the winter requires moving furniture through snow and sub-zero temperatures.
  • Parents typically want to move during the summer, so their children’s school year is not interrupted.
  • Students who are renting while they’re in school want to sign a lease right before the school year starts.
  • Graduates typically finish school in the summer and move into rentals.

What are the Benefits of Finding Tenants During Peak Rental Season? 

As a landlord, you want to make finding tenants, screening tenants, and signing a new lease as easy as possible. Searching for tenants during peak rental season helps you do just that. Here are the specific benefits:

Maximize Tenant Interest

If you list your property during peak rental season, more tenants will see your rental listing, which will result in more tenant leads. You want to list during peak demand so you can engage with more tenants.

Be Selective 

With a larger number of tenant leads, you can be more selective. When you’re selective, you increase the chances of finding quality tenants who pay rent on time and take care of your property. We’ll help you find quality tenants with our tenant screening advice. Learn how to:

  • Review rental applications
  • Verify tenant income
  • Contact prior landlords
  • Analyze tenant credit reports and background checks
  • Accept or deny prospective tenants
  • Avoid Rental Vacancies 

If you list your property when demand is high, you decrease your chances of having a vacant rental property. At PropertyWize, our online rental listings generate an average of 25 tenant leads per month, so a vacancy is almost never a concern.

Things to Consider Renting During Trough Season

Don’t panic or become desperate 

Make sure your rental property stands out in appearance and PRICE amount the competition.

Offer a leasing incentive to move.

Keep the same screening process but you may need to budget to drop the rent.

Know the cycles of leasing as it important when budgeting for new investment properties. We always inform clients that you may be able to a good deal but always know this time of year is very tough to rent homes to qualified tenants.

What Do PropertyWize do to assist with leasing during the Trough Cycle

Lease Terms

In order to make the most of peak rental season, you’ll want to get on a summer vacancy cycle. Beginning during the month of November, we offer an incentive for doing an 18-month lease term or in some rare cases we offer a 6-month lease option. That way, the next time you must search for tenants, it will be during the summer.

Turn up the Marketing Efforts

Leasing Chart
  • During the Winter Season, we increase our marketing activity:
  • Post to craigslist at least 2-3 times a week
  • Offer Free Applications
  • Make sure our Listings stand out by having professional photos and proper signage
  • List to over 30 sites and counting including the top 6 (Zillow, Hotpads, Trulia, Craigslist, Go-Section 8, and Facebook Marketplace)
  • Run Sponsored Ads on Facebook to drive more clicks
  • Promote to all the Popular Facebook Groups
  • Refresh leads more often to stay at the top of the listing’s webpage.
  • Weekly email blast using Mail chimps and Go section 8
  • Have brochure boxes in specific properties with flyers to generate more drive by traffic
  • Co-Op with other Realtors and Tenant Placement companies
  • Host Big Open Houses to drive in more traffic

Other things to consider when Leasing a Rental Home.

Amenities:

Going into 2020 all rentals should include the following amenities to attract the best quality tenants:

  • Washer and Dryer
  • Black or Stainless Appliance Package
  • Window Treatments
  • Central CAC
  • Prompt and Professional Maintenance Service 

Location

Does this place have easy access to roadways and/or public transportation? Can I easily access grocery stores? Will my commute be reasonable for my preferences? Is this area safe? Are the school districts acceptable?

These are all questions renters are going to ask when looking for a quality place to live. You don’t necessarily need to provide all of these to have a rental that performs well, but they are certainly things to consider.

If your rental is near a University, there are some advantages for leasing during the trough season. 

For example, if you’re near a University, and tend to rent to students, then you should pay attention to the school’s annual calendar. You’ll want to sign a lease 30 days before the school year starts because students want to move-in right before classes start.

Keep in mind a few key details about timing: 

You want new tenants to move in right away to avoid a vacancy but leasing to the wrong tenant will cost you even more. So its best to wait for the optimal timing. 

Your new lease should be signed 30 days before new tenants move in

It typically also takes 30 days to find and screen tenants during the Peak Season and 60-90 days during the Trough Season.

Making the most of peak rental season will help you find more interested tenants, be selective, and charge a higher rent price. If you end your next lease during the summer, you can be on a summer vacancy cycle moving forward.

Researching Property Management Companies?

 PropertyWize is the best in the industry!


We are committed to making you a successful investor. Our team wants to see you get a better return on your rental property. We know how to increase your profits all while decreasing your stress and frustrations. Our proven systems, and use of cutting-edge technology, sets us apart. Being a landlord is hard work. Put our experienced team of 10 individuals to work for you. Schedule a 15 minute consultation with an Experienced Manager Today!

Why You Should Invest in Real Estate Using an LLC

System - Monday, December 9, 2019

1. Protection from liabilities.

LLCs protect you from liability claims. Anything that’s a claim against a property—like, “Hey, I slipped and fell”—an LLC is an entity that can stand between you and that. The party will come after the LLC, not you personally.

Full transparency: there are ways around this. The most important one to mention is liability insurance. Now, I’m not saying insurance takes the place of an LLC—but you are not fully exposed if you don’t have an LLC but you do have insurance.

2. Provides tax write-offs.

Because it’s an entity with its own tax return, LLCs allow you to write things off (i.e., business-related expenses like your cell phone bill). You can try to write them off on your personal tax return, but it looks a little squirrelly to the IRS that it’s not a company claiming those business expenses. It makes things cleaner from a financing and tax perspective to write them off under an LLC.

3. Allows you to sell shares of the company.

An LLC operates as a business entity. As long as it’s registered properly with the SEC, you can sell shares—or in the instance of LLCs, what’s called “interests”—of the company to other investors who want to invest with you. Or you can sell the LLC altogether as a business that owns things.

There are times when an LLC is not appropriate though. So, when exactly shouldn’t you form one?

When NOT to Use an LLC

1. Don’t use an LLC if you’re house hacking.

Don’t use an LLC when house hacking, because it may prevent you from getting the financing you want. If you’re looking for low money down, Fannie Mae- or FHA-backed mortgages, this property can’t be in an LLC.

For these purposes, banks can only lend you that money under your personal name. Just get a really good insurance policy.

2. Don’t use an LLC if you don’t have 20 to 25% for a down payment.

If you’re buying a property for $100K, if you’ve got $20 to $25K to lay down plus some for closing costs, there’s no reason why you would not go out and start up an LLC. You can get commercial financing on these properties or financing from some other lender. If you encounter lenders who won’t do it, find another one, look on BiggerPockets, or walk into a small community bank.

More LLC Pro Tips

Here are a few final thoughts on the topic.

Avoid setting up your LLC online (unless you’ve been doing it for a while). Instead have a lawyer help you.

And absolutely have a lawyer help you create an operating agreement with the LLC. You can do this online, too, but I highly recommend NOT going that route—especially if you have partners.

A good lawyer can set up an operating agreement for you for less than $1,000. It’s worth it.

Bottom line, if you’re going to build a business around real estate investing, run it as a business. An LLC is a company.

If you’re looking to make this a side hustle or just something you do a little bit, then do it in your personal name and own one or two properties. That’s OK.

But, if in the future, you intend to build a big portfolio, set up an LLC. Operate as a business. Do it now—five years before you get to that point. I promise you, moving properties out of your personal name and into an LLC is not easy—it’s doable but difficult.

One last thing, set up the LLC where the property is. Don’t favor Nevada or some other state over others. The LLCs that own certain properties should be set up in the state the property physically exists in.

You’re going to have to pay a tax return in that state. So just set it up there.

The reason people talk about state-based LLCs is because they believe specific types of LLCs will prevent certain claims from jumping over the LLC and getting to you personally.

However, I’ve never seen any state-based LLC prevent anyone from getting ahold of a person specifically if that’s what they’re trying to do. Plus, that’s what insurance is for. Avoid the tax headache of setting up an LLC outside of the state the property is actually in.

I’m not a lawyer or CPA—neither is BiggerPockets. You should absolutely consult a lawyer or CPA about this subject. A lot of the information that I’ve gone through here today is my opinion, so it’s important to consult a professional.

Source: https://www.biggerpockets.com/blog/real-estate-llc-not-best-option?utm_source=newsletter


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