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Landlord Tax Planning

Saving-MoneyIf you are a landlord, you are likely interested in landlord tax planning.  There is no better time to prepare for this year’s taxes than January 1 – of two years ago.  If you waited too long, and are now worried about your taxes, there is only a limited number of things you can do.

I plan all year on my taxes.  There are capital improvements to make, replacing items that may be working fine but will help keep a tenant or make it easier to get a new tenant.  Ways to speed up expenses and possibly defer revenue.

Here are some things to ponder to help minimize any tax burden you have.

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What To Do If Your Apartment Has No Heat

Rental Apartment Has No HeatOnce in a while, you will have a rental maintenance issue that you cannot permanently solve right away. When an apartment has no heat that is certainly one of them. There are several other types of issues like this. You may have a drain clog that you do not have the equipment to do yourself, it may be a weather-related issue, or it may be that you are just waiting on someone to do the work, or parts.

Here is an issue I came across in one of my apartments and how I eventually resolved it.

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Should I Allow a Co-signer for a Tenant?

Co-signer for a TenantShould You Allow a Co-signer for a Tenant?

Risky tenants need co-signers.  You are considering whether or not to allow a co-signer for a tenant.  Should you?

Is the tenant a marginal tenant in terms of income, credit score or rental history?  Or criminal record?  Generally, a lower income person might want or need a co-signer to prove that they can pay.  I understand the tenant needs help, but are you willing to take the risk?  If the tenant is too high of a risk by themselves, can you mitigate the risk with a co-signer?

Here are a few of my thoughts on allowing a co-signer for a tenant.

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Removing a Garbage Disposer in a Rental Property

Garbage DisposerIf you are a homeowner, you likely have a garbage disposer.  You may use it all the time.  In a rental, it is a different story.  It can be a constant maintenance item, it can leak, need to be replaced, or just plain smell bad.

Here is what I recommend on a garbage disposer in a rental property.

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How to Hold Rental Property

Hold rental PropertyOne of the most asked questions I asked of me, or I see on other forums, is how to hold rental property.  Should it be an LLC, S-Corp, sole proprietorship, etc.  I cannot speak to all the benefits of each method, but I can speak to what I have done with my properties.  You may want to consult an expert (i.e. not me) to determine what is best for yourself.

Here is the way I hold rental property, and the reasons behind it.

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Screening Tenants For a Rental Property From a Landlord

interviewWhen you are a landlord, you need to rent to good people.  Screening tenants for your rental property will be the key to your success.  The tenant can be of any race, religion, nation origin, etc. Screening tenants will determine the experience that you will have and how much money you have the potential to make regardless of any protected class.  After all, making money is the goal of a landlord.  Providing housing, is secondary.

I would say that almost all people with a credit score of 625+, and a household income of $45K a year with a rent of ~$1,125, with a minimal criminal background and a clean rental history will make for a decent tenant.  Of course, a decent deposit will also be necessary.

Here are a few instances I recently came across with screening tenants, that shows what a landlord is up against in regards to tenant screening.

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Pay off Rental Mortgage Debt

Rental Mortgage DebtA few posts ago, right about last year, I wrote about my plan to pay off rental mortgage debt.  I had laid out several of my options, and I ignored all of them.  Instead, I continued to pay my regular payment, bought a new rental and paid cash for it, and paid extra on my current mortgage that is targeted to be paid off next.  If I would have skipped the new rental, and put that money on the rental mortgage, I would almost have this rental mortgage debt paid off.  Instead, I have that money as a 15%+ income producing asset.

There are many reasons to pay off rental mortgage debt, those reasons are all against the many pundit’s advice to stay leveraged.  Here are my own personal reasons and what I have accomplished in the past twelve months.

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How to Manage Out of State Rental Property

how to manage out of state rental property.I get asked quite a bit whether a real estate investor should buy out of state rental properties.  When you do not live in the same state, or even within a few miles of your rentals property, things can get very complicated.  You have to learn how to manage out of state rental property, or learn how to manage them when you are out of state.

How do you turn and show a property?  How do you check to see of a simple repair is needed?  Can you just flip a circuit breaker, or do you need to call in a electrician?

My rentals are all within about 10 miles of my own home, most are within 3 miles.  Now that I no longer have a full-time job, I do not want to be tied to my home base.  There are business meetings, and conventions in out of state areas that I may want to attend.  I may want to set up an off-site corporate meeting for my own company, and yet still manage the properties myself.

Here is a recent example of how I handled several repairs while I was on a trip to Branson, MO. Continue reading “How to Manage Out of State Rental Property”

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I Quit My Job to be a Landlord

CountDownChartThat’s right, I quit my job to be a landlord.  Are you prepared to give up your job and be financially independent?

It takes more than just a vision of what it is like to be financially independent.  For me, I was planning on this for several years.  And when you have a goal in mind, you shoot for the goal.  The problem comes when the goal is near at hand, sort of like when a dog is chasing a car.  Pretty soon, you catch the car.

So here is what went through my mind in deciding the day, how the time went by, and what I gave up.

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How to Replace a Garage Door Spring

20160629_175636A garage door needs a garage door spring, either a torsion or an extension spring, to help you lift the weight of the garage door.  Even the most heavy-duty garage door opener cannot match the lightest garage door and power the door up to the top to allow you to get out of the garage.

When a garage door spring breaks, you are stuck either in, or out of, your garage.  You can pull the manual door release, but you are still obligated to lift a garage door that could be as much as 300+ pounds.  It is no small task, and a renter doesn’t want to do it.  Nor should they have to.  And they may need to get their car out of the garage to go to work, to get you your rent.

I recently had to replace a garage door spring in two different units recently, here is what I was able to do.

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