Reasons Why You Might Need a Property Management Company

Reasons-Why-You-Might-Need-a-Property-Management-Company

Having a rental property can be overwhelming for any landlords or owners. And one of the biggest decisions that you can come up with is whether you should hire a property manager to look after your properties. There are many factors that may influence a property owner’s decision it may be his or her accessibility to the property they own, their availability to manage and check their tenants and if they can afford the cost of employing a professional property management firm.

If you live near your property you will be able to keep a close eye on things. Also, you will be able to visit your rental property on regular basis which is required for maintenance, inspections, and collections. On the other hand, if you live further from your rental house or apartment it would cost you so much time and money to visit it regularly. Scheduling a monthly visit to check the condition of your properties and tenants and responding to their calls in the middle of the night can be burdensome for landlords. A property manager can make these things easy for you and ensure you that your property is taken care of even if you are in the comfort of your home.

Not every one of us has the special gift of negotiating with people under pressure. At the end of the day it takes a professional person to handle the ups and downs of your business. Aside from collecting the monthly rent and making a regular inspection and maintenance there are more other problems that may encounter everyday that can push people to their limits.

As the number of rental properties you own increase the more problems you will face as you manage your own properties. Many investors with large portfolios take advantage the service of property managers. It would be more efficient to hire the skilled people to take care of your investments. Moreover, if you do not have the experience in home maintenance and repairs they are the one who can help you get things done. And with the help of a professional property management company you can ensure that the work is done well in timely manner.

Another advantage of hiring a property management firms is they can help you in advertising, fielding calls, help you find a good tenant to decrease your vacancy rate. They can also help you handle the accounting and keeping records for your property.

Customer service is very important in rental property business. We know that each tenant requires attention even to their smallest concerns. The management team you respond to your tenants when an emergency happens in your property. They can quickly fix your property and handle problems immediately. Furthermore, they can help you instantly resolve problems with tenants like late payments. They could also help you ensure that your property is run legitimately to prevent lawsuits.

Finally, your decision whether to hire or not a management firm to handle your business will depend if you are financially capable of employing one to manage your rental property dealings. Assess first the opportunity cost that you will be taking once you finally employ a property manager.

Before you decide if you will hire an expert in managing properties think first if you really need them and if it will be beneficial for you to seek for their help.


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

Advertisements

About Rental House Tax Deductions

about-rental-house-tax-deductions

When you purchase a home with the intention of generating rental income, the IRS treats it more like a business or investment than a personal residence. The tax law permits you to claim tax deductions for the expenses that relate to this investment property. However, if you also use the home for personal purposes during the year, you may need to allocate expenses between the nondeductible personal use and deductible rental use. Read on for more about residential rental property.

Allocating between rental and personal use

The IRS does allow a certain amount of personal use of a secondary home without requiring you to do an allocation. However, if you use the home for the greater of 15 days, or more than 10 percent of the days the home is rented, you cannot claim a deduction for all expenses. You then must allocate the expenses between the two types of uses, based on the ratio of personal-use days to days you collect rent. For example, if you spend 25 days in the home for vacation, and rent it out to tenants for 75 days during the rest of the year, then only 75 percent of your expenses for the home are deductible. However, if you limit your use of the home to five days out of the year, then no allocation is necessary and you can deduct all of the expenses.

Deductible rental house expenses

Common deductible expenses of maintaining a rental property include the cost of advertising the home to prospective tenants, cleaning the home after each tenant vacates, commissions and fees you pay to a management company, state and local property taxes and utility service and insurance premiums. Additionally, you can claim annual depreciation deductions to recover a portion of the home’s tax basis each year. Generally, the tax basis of the property is equal to its purchase price, settlement costs and the cost of making permanent improvements to the property that increase its value.

Rental house mortgage interest

Just like the interest you pay on a mortgage to finance the purchase of a personal residence, the interest payments on a loan to acquire a rental property are also deductible. However, the amount of interest you may deduct in a year cannot exceed your net investment income. Net investment income is the total profit you earn on all rental properties you own before reducing it by interest payments. At the end of the year, if you incur a loss or have minimal net investment income, it is unlikely you can fully deduct interest payments. You can, however, carry the nondeductible interest payments forward to any future tax year that you have sufficient net investment income.

Reporting rental house deductions

Taxpayers must report all rental income and deductible expenses on the Schedule E attachment to a personal income tax return. However, if renting houses is your primary occupation, and you actively participate in daily operations, you may need to file the Schedule C attachment instead. Sole proprietors use Schedule C to report the earnings and deductions of a business they actively engage in. Regardless of which schedule you prepare, IRS Form 4562 may also be necessary if you claim depreciation deductions.


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com