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Welcome to the AAOA Forum, where we discuss the the topics our members want to hear and want to talk about. We like to take an active roll in the online community to help our members learn and help educate landlords new and old. We encourage you to participate and join in our discussions. Thanks.
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American Apartment Owners Association offers discounts on products and services related to your commercial housing investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.
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Posted by Kim Ezzell on 12.29.2008. 8 Comments »
Filed under: AAOA Forum
Military Tenant Not Off the Hook for Rent
by Janet Portman, Inman News
Q: I am a landlord and had a tenant who is in the Army Reserves. He received mobilization orders in February, directing him to appear in June, several months away.
My tenant just gave me a verbal notice seven days before he left.
He claims he is entitled to a full refund of his deposit because the Army gives some rights to their personnel when they have to be mobilized.
I would like to know if this is true and what my options are. –Robert S. Read the rest of this entry »
Posted by Kim Ezzell on 12.29.2008. CLICK to Leave a Comment »
Filed under: AAOA Forum
Telltale Signs Water Heater, Furnace Will Soon Die
by Kevin and Bill Burnett, Inman News
Q: After reading your column on noisy water heaters I was left with a question that has been worrying me since I was widowed and no longer able to depend on my husband to know such things. The issue that sparked my attention was your estimated life span of water heaters as determined by their warranties.
I know my furnace was new, and I think the water heater was too, when I purchased this house in 1973. I am haunted by the idea of one of them suddenly breaking down, but also would hate to replace an appliance that I have found to be so reliable. Are there estimated life spans for such things? Or warning signs of demise? If so, what are they? Somehow furnaces and water heaters are much more mysterious to me than my kitchen appliances. Read the rest of this entry »
Posted by Kim Ezzell on 12.29.2008. 1 Comment »
Filed under: AAOA Forum
Readers Create Recipe for Housing Recovery
A few weeks ago, I put forth a few ideas on how to fix the real estate market. I invited readers to respond with their own suggestions. Here are some of their ideas (edited for space and clarity):
1. We could ask Bill Gates and Warren Buffett to purchase all the foreclosed homes.
2. I think the best way to stabilize (the housing market) is to get houses selling again. And the best way to get houses selling again is for the cities to lower the taxes levied based on a realistic assessment value. Also, if FHA would provide low-interest loans for all buyers, homeowners as well as investors (I’m talking about loans in the 4 percent range), then the excess inventory would dry up and prices would go up. After a couple of years, that interest rate could increase a little bit. But rather than selling T-bonds and T-bills, use that money directly to finance home loans.
3. Please look into the changing real estate market and how pre-sale inspections help expedite and sell homes in this slow market. There are very few buyers, lots of listings, and you need to inspect, repair, and/or disclose problems to prevent the dreaded deal-killers. If you’re serious about selling or helping someone sell their property, it’s stupid not to do a pre-listing home inspection. You’ll get a big bang for little bucks.
What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.
Copyright 2008 Ilyce R. Glink
See more on our Financing Pages.
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Posted by Kim Ezzell on 12.29.2008. CLICK to Leave a Comment »
Filed under: AAOA Forum, Financing
Calculating Gain on Sale of Rental Property
RealTaxTips.com TReXGlobal.com
Calculating the gain or loss on a sale of rental property is a very simple calculation, and understanding it will result in you saving thousands of dollars in taxes.
1. First, determine your selling costs. There is a great tip about accounting for all selling costs and you can read it here:
Assuming you sold a property for $200K and you paid 6% commission ($12K) plus other closing costs that added to $6K, your selling costs are
$18K (Selling Costs) = $12K (Commission) + $6K (Closing costs)
2. Second, you calculate the adjusted cost basis of your property. A simple formula for calculating adjusted cost basis is
Adjusted Cost Basis = Purchase price – Depreciation + Improvements
Assuming that you had bought the property for $95K and paid closing costs of $5K that you added to increase the basis, your purchase price is $100K.
Go and look up the depreciation that you have taken on your tax return for this property and the improvements done to the property. Assume in this case you had taken $30K of depreciation and have done $10K of improvements.
The adjusted cost basis of this property is:
$80K (Adjusted Cost Basis) = $100K (Purchase Price) – $30K (Depreciation) + $10K (Improvements)
3. Third, the gain or loss on the sale of this invest property is calculated using the formula:
$102K (Gain) = $200K (Sale Price) – $18K (Selling Costs) – $80K (Adjusted Cost Basis)
4. Finally, the amount taxed at capital gains rate of 5% or 15% is calculated by subtracting depreciation from gain:
$72K Taxed at Capital gains rate of 5% or 15%
$30K Depreciation (Generally taxed at 25% rate)
In this example, an investor pays $11,100 (if 5% capital gains tax rate) or $18,300 (if 15% capital gains tax rate) in taxes on a $102K gain. By accounting for all selling costs and improvements, the investor saved from $3K to $5K in taxes depending upon their tax bracket.
For more Tax Tips and FREE Property Management Software for real estate investors, check out TReXGlobal.com.
Posted by Kim Ezzell on 12.24.2008. 3 Comments »
Filed under: AAOA Forum
FDIC Loan Mod Plan Flawed
by Jack Guttentag, Inman News
“Do you have an opinion about the FDIC plan to jumpstart loan modifications as a way to reduce foreclosures?”
Yes, I admire FDIC, under the leadership of Sheila Bair, for taking the lead in attacking the root source of the financial crisis: the vicious cycle of declining home prices and foreclosures.
I share FDIC’s view that the way to break that cycle is to modify mortgage contracts in ways that enable borrowers in distress to return to good standing and stay there — AND to do enough of them to make a difference. Read the rest of this entry »
Posted by Kim Ezzell on 12.24.2008. 1 Comment »
Filed under: AAOA Forum, Financing
China at Forefront of Environmentalism?
by Arrol Gellner, Inman News
(This is Part 3 of a four-part series. Read Part 1, “China’s growth has lessons for U.S.,” and Part 2, “As China grows, so do its problems.”)
When it comes to environmentalism, the Chinese are bad, bad people, right?
Not exactly.
Thanks to their government’s skill at disseminating ideas, the Chinese are acutely aware of their environmental troubles.
Given their many other priorities, the surprise is that they’ve already started grappling with the problem. Read the rest of this entry »
Posted by Kim Ezzell on 12.24.2008. CLICK to Leave a Comment »
Filed under: AAOA Forum, Going Green
Security Camera Technology: New Breakthroughs Make it Easy To Provide Security for Your Tenants
Breakthrough Technology for Security Cameras
IP and CCTV cameras used to be incompatible technologies, but thanks to the innovation of Video Save’s new CES 2 server, IP and CCTV cameras can now be used interchangeably.
IP cameras have long enjoyed the advantages of ease-of-use and ease-of-wiring. They are also easy to implement, because the camera simply plugs in to Internet cabling which is often already installed and available.
Historical drawbacks of the IP camera are the inability to store and manage the video and the difficulty of integrating the IP camera into conventional surveillance infrastructures. The new CES 2 server, by providing video storage and easy integration for both IP and conventional CCTV camera types, removes storage, management and integration as an IP camera limitation.
Posted by Kim Ezzell on 12.22.2008. 1 Comment »
Filed under: AAOA Forum
Top 10 Money Saving and Money Making Tips of 2008
We’ve brought you dozens of money saving tips over the year. Here’s a countdown of some of the best technology and money making ideas of 2008, so you can save even more in 2009:To subscribe to our blog, click here.
Posted by Kim Ezzell on 12.22.2008. 1 Comment »
Filed under: AAOA Forum, Collections, Going Green, Insurance, Make Extra Money
Is Nonsmoking Policy Illegal?
by Robert Griswold
Q: I am preparing to rent out my home and was advised that it may be illegal or challenged if I request nonsmokers only.
If my family ever moves back to the home, my daughter is asthmatic and the smoke residue may cause a health risk.
Can I request nonsmokers only? Read the rest of this entry »
Posted by Kim Ezzell on 12.22.2008. 3 Comments »
Filed under: AAOA Forum