Some valuable tips for Landlords and Owners of Residential/Commercial Property
For landlords, falling rents and the economic crisis are eroding the profitability of their real estate holdings. There are however several valuable tips for landlords in the San Fernando Valley to avoid trouble and regain financial leeway.
Buying a home for rent allows you to take advantage of the leverage of credit to build wealth, and thus ensure additional income at retirement. Despite these two benefits, the rental real estate has been declining for years. Investing in stone is, therefore, a risk today, but it can be controlled. If you already have real estate assets, you also have the means to preserve or increase your profitability. We present below five tips for the property management.
- Hire a Property Manager
Property owners can hire managers to manage their properties on a day-to-day basis. A real estate administrator can manage the financial management of properties for their clients. The administrator may collect the tenants’ rents personally, or the payments may be sent to the tenant’s office. Real estate managers can handle payments for the property owner, such as mortgages, taxes, utilities, insurance and maintenance expenses. The administrator periodically reports to the property owner on the status of rental payments and costs.
The property manager will be able to handle the new rentals through the publication of the properties, will be able to investigate the tenants and manage the rental contracts for the new tenants. The owner of the property could determine the rental price to be charged to the new tenants, or the administrator can make use of his experience to calculate the appropriate rental price for the rental property. Administrators also track contracts to expire, handle evictions and complaints from tenants. The administrator should be familiar with the lease laws of the owners that regulate the rental of residential and commercial properties.
- Take advantage of the land deficit
If your apartment is in bad condition, urgently start working on it. Maintenance repairs, renovations or that improve the overall condition of the rented housing are 100% deductible of your property income. When the total of your rental expenses (works, the interest of the loan, insurance for the good, management expenses …) is higher than the rents collected in the year, you are in property deficit. It is then transferable to your other property income, which allows, mechanically, to reduce your tax burden. If you still have a residual property deficit after making this postponement, it is chargeable, excluding interest on borrowing, on your other income (salaries, retirement pensions, etc.) up to a limit of 10,700 euros per year. The surplus is deductible for the next ten years. Moreover, the tax savings realized due to the land deficit are not subject to the capping of tax loopholes of 10 000 euros, which is not the case of the reduction of taxes.
- React quickly in case of unpaid bills
If you do not get a response from your tenant eight days after sending the receipt, contact them to find out if it is an oversight or if they have a bad financial pass. In the second case, find an amicable agreement, and propose a schedule of payment. If no agreement is possible, send a formal notice after twenty days late. At the second unpaid monthly payment, send the same letter with acknowledgment of receipt. After fifty days, call a bailiff who will issue a command to pay. If these steps do not succeed, launch a court proceeding without waiting further.
- Put your home up for renovations
Your tenant has just left, if the housing is in condition to be re-rented, undertake renovations, even minimal. Replacing a tired worktop, installing a state-of-the-art mixer tap in the bathroom or a built-in closet in a studio will not cost you more than a few dozen euros. The key: a real difference because even where rental demand is strong, old-fashioned housing is still in significant numbers. With a well done and clean property, you will attract a maximum of tenants. You will then only have to choose the best files.
Another advantage, if you follow our advice on conducting renovations, your tenant will agree to enter the premises quickly. On the other hand, if the property is worn out, he will ask you to sign the lease as late as possible. If you refuse and he is a good tenant, he will find better elsewhere.
- Rent slightly cheaper
Many landlords rent their property at the high end of the market. In the long run, this is not the right tactic because it is more interesting to retain a tenant with attractive rent. Demonstration: you rent a studio in perfect condition 330 euros per month, instead of 350 euros, which represents an annual loss of 240 euros per year.
On the other hand, your student tenant, for fear of not finding as well at the next return, may want to keep this nice and interesting rented accommodation during the summer, without breaking the lease at the end of the academic year, You will avoid two months of holiday rental, and will receive nearly 700 euros per year and more. In the end, your strategy will prove to be winning.
So, these five tips can be very fruitful for you. Los Angeles Property Management Group (lapmg.com) is at your service for any help that you may require. Feel free to contact us at firstname.lastname@example.org.