Tenants Importance Renters Insurance

October 29, 2010 – One cost that many new renters attempt to avoid is that of renters insurance. Many first time renters simply believe that either a) the landlord’s insurance covers the building anyway or b) that it is a waste of money. Both of these are misconceptions.

The insurance the landlord or property only covers the cost of fixing any damages the building itself may incur. This means that the building insurance does not in any way cover the costs of personal property owned by tenants.

The second misconception, that insurance is a waste of money, is untrue for a number of reasons. The first being that many property management groups will not rent to someone without renters insurance. This is because they want to ensure their tenants are protected in case any sort of damages where to occur. This means that in many cases, in order to rent an apartment, you need to have proof of having renters insurance.

The other, more obvious reason renter’s insurance isn’t a waste of money is due to the fact that it is there to protect your personal finances in case your property is damaged. Though you may think that your stuff isn’t very expensive which makes it not worth paying for renters insurance, this may not be an inaccurate understanding of the situation. Renters insurance does not just cover the few expensive items you own, it covers everything you own. If there is a circumstance that damages your property, the total cost of replacing items you once owned will likely be far above that of a monthly insurance payment. Think about how much it would cost to replace all of your clothes, furniture, electronics, kitchenware, and anything else you might own. Being insured protects you from the possibility of having to purchase everything you used to own with money from your own pocket.

If you currently drive a car which is insured, you can usually add renters insurance through the same company at a nominal fee. Other sources of renters insurance can purchased through many of the main banks. Renter’s insurance is key to ensuring financial safety that in itself makes renter’s insurance worth every penny.

About the Company

CLV Construction and Development conducts comprehensive project management through trust and integrity.

CLV Group Ottawa – Your Full Service Real Estate Provider. Choose Ottawa real estate agents, Townhomes, houses Ottawa apartments for rent & Kingston apartment rentals from over 7200 units of CLV Group.

Source: CLV Construction

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1099-MISC

4 Oct, 2010: The new jobs and credit act signed by President Obama this week will make most landlords subject to 1099 reporting requirements. Even a private landlord renting out a single-family home will need to report payments for rental property expenses such as plumbing and painting.

The new law considers virtually all landlords to be conducting a trade or business. “So, just like any other business, they have to issue a 1099 MISC for anyone they pay more than $600 in rental expenses in a year,” said Jean-Philippe Choudhry, a member of the IRS’s Electronic Tax Administration Advisory Committee.

The law applies to payments made after December 31 of this year. “This would have been much more of a burden a few years ago,” pointed out Choudhry. “These days, it’s a matter of collecting the information and plugging it in to a filing website such as eFileMyForms.com or eFileForBusiness.com.”

The act also doubled penalties for failing to correctly report form 1099 and other information. “This shows that the IRS is serious about better compliance with information reporting laws,” Choudhry noted.

According to Choudhry, 1099 MISC reporting is a 3-step process. “First you issue a 1099 to the payee. Then you receive corrections, if any, from the payee. Then you file the forms with the IRS.”

He offers some tips for landlords new to 1099 MISC reporting:

1. Make sure you get a W-9 from everyone you pay. “Do it before you hand over the check, so you can ensure that you get the information,” advises Choudhry. This simple form asks for basic information such as the payee’s name, address, and tax ID number. It’s available at www.irs.gov.

2. Verify the W-9 information before you file the 1099s. Says Choudhry, “It’s not necessary to obtain a new W-9 for every payment, but it’s a good idea to check the information every year before filing your 1099s.”

3. Currently, you don’t have issue 1099s for corporations, but you do for individuals, partnerships and many LLCs. The W-9 will usually help you determine whether a payee needs a 1099.

4. Use your accounting software to track payments to your 1099 payees over the course of the year.

5. Use a filing website (such as eFileMyForms.com or eFileForBusiness.com) to mail out the 1099s, and to later file the information with the IRS. Says Choudhry, “These websites are set up to help you pull together the information, print and mail the forms, and process the filing. They also hold everything on a secure server so you can use it again the following year.”

SOURCE 1099 Pro Inc.

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Landlord Posssessions Caused By Tenant Rearrears

September 28, 2010 – New figures launched by the National Landlord Association (NLA) indicate that nearly half of all landlord repossessions are caused by tenants in rental arrears. With this in mind, Belvoir Sheffield, the leading letting agent in Sheffield is offering advice on reducing this risk.

Following recent NLA data which demonstrates that a fifth of private-residential landlords had tenants who were in rental arrears in the second quarter of 2010, with 81 per-cent of cases taking an average of five months to resolve, landlords are being advised to take adequate cover.

Rick Flay, Director at Belvoir Sheffield, who offer a wide range of property to rent in Sheffield, said, “Gaining possession of a property can be extremely costly and time consuming. It can cost up to £5,000 to have tenants removed, and this is often aggravated by late rental payments.”

Whilst the report found that one-third of landlords had never sought to end a tenancy, 23.3 per-cent did so because of anti-social behavior experienced by tenants, with the total bill for rental arrears being calculated at an estimated £254 million across England and Wales this year alone.

Rick, from the Sheffield letting agents added, “Landlords should ensure that they employ an agent who chooses their tenants wisely, as this will improve the likelihood of having a good landlord-tenant relationship. Here at Belvoir Sheffield, we carry out in-depth credit reports, and request references from previous landlords and current employers, on behalf of the landlords of our managed properties.

“Taking care of your property is also key to having a good landlord-tenant relationship. If your tenants see that you care about the condition of your property and it will also encourage them to take pride in the condition of the house.

“It is essential that landlords take out Rent Protection Insurance in order to reduce the risk of rental arrears. Designed to cover that landlord against any possible arrears until vacant possession is obtained, Rent Protection Insurance also covers any legal expenses as a result of a tenant breaching the tenancy agreement, or unauthorised occupation of the property.”

Source: National Landlord Association

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Landlord Association News

Los Angeles August 31, 2010-Almost one-third (31%) of independent landlords plan to buy additional rental property by the end of 2012, according to a survey released today by The National Association of Independent Landlords.

The top reason, cited by 68% of those planning a purchase, is that current prices make rental real estate a good investment. Other reasons include pricing low enough to allow them buy a retirement home (8%) or a vacation home (8%) that can be rented out to earn additional income until needed.

“With property prices still beaten up in many great areas – Las Vegas, Florida, Arizona and California – our members see this as a good buying opportunity and a smart way to beef up their property portfolios,” said Tracey Benson, president of The National Association of Independent Landlords. “Low interest rates are just icing.”

Most respondents (73%) say real estate is a good way to fund their retirement.

Nationally, housing prices and sales are mixed, with some areas having bottomed out and others in for further depreciation.

“It’s not like all uncertainty has been erased from the market – far from it. But buyers who do their research can find deals that really make economic sense for them,” Benson said.

The National Association of Independent Landlords polled 507 members from Aug. 24 to Aug. 26, 2010.

About The National Association of Independent Landlords

The National Association of Independent Landlords is the country’s largest provider of services for small landlords. Services include credit reports, electronic rent collection and tenant screening as well as information about property management, rental laws in all 50 states and other issues critical to property owners.

For further information, please visit www.landlordassociation.com

Source: The National Association of Independent Landlords

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Top 10 Tax Tips for Rental Properties

Due to the recession, there has been a significant increase in the number of accidental landlords in the US – property owners who have turned properties that they wanted to sell into units that they must rent out. Many of these individuals will be including rental property income and expenses in their tax filing for the first time.

According to a study by the GAO (Government Accountability Office), about 25 percent of rental property owners over report their net income from rental real estate, by overstating rent received or understating expenses or losses. The estimated amount of net income overstated by misreporting rental property owners was $2.1 billion.

Download TODAY the Top 10 Tax Tips for Rental Property, and make sure you’re keeping money in your pockets!

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RENTAL PROPERTY

Rental Property: Who owns the USA’s Rental Properties?

Individual investors own most rentals.

In 1991, individual investors owned 92 percent of the Nation’s rental properties. These investors may be one person, a married couple, or the estate of a deceased person.

The percentage of rental properties owned by individual investors, however, differed for medium- and large-size properties. Individual investors owned three-fourths of 5- to 49-unit properties and one-fifth of properties with 50 or more units.

Incidentally, most properties with 50 or more units were owned by partnerships (56 percent), either limited or general. The top chart on the back shows who owns differ-ent types of rental properties.

Half of all rental properties are financed with a mortgage.

Fixed-rate amortized mortgages were far and away the most popular way of financing rental property. Seven in ten mortgaged rental prop-erties had such a mortgage. The bottom chart on the back shows how rentals were financed.

Adjustable-rate mortgages (ARM’s) also were popular – they were the second most used method of financ-ing for four of the five kinds of rental properties.

The exception was large rental properties (50 or more units), where balloon mortgages were the second most popular method.

Mobile homes differed from other rentals in one key respect. Only one-fifth carried a mortgage, far below the rates for other types of properties. That’s because mobile homes not attached to the ground on a foundation may be purchased using commercial financing, which is similar to an auto loan.

More information about Rental Property:

The data in this Brief come from the 1991 Residential Finance Survey, which collected information about nonfarm, privately owned, residential properties. If mortgaged, a property is defined as all the buildings and land covered by a single first mortgage. All other properties are defined by the owner

Note: These percentages total 100 percent of property owners/managers who responded to the question on who owned the property. Twelve percent of owners/managers who responded to the survey questionnaire did not respond to this question.

U.S. Census Bureau, Department of Commerce

U.S. Census Bureau, Department of Commerce

This blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies is brought to you by SimplifyEm Pay Rent Online and Property Management Software

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Residential Real Estate Foreclosure Loan Reduction

Homeowners can tap into Payment Reduction Plan (PRP) to get a temporary payment relief while working out the foreclosure prevention program with the lender.

The major key benefits of PRP for homeowners are:

1. PRP is available to homeowners who are already in default or at risk of default and do not quality for Home Affordability Modification Program (HAMP). A loan servicer is expected to offer PRP to a homeowner who is willing and has the ability to make reduced payments of at least 70% of their monthly payment. For example if a homeowner’s loan payment was $2000, the homeowner should be able to afford $1400 payment

2. PRP is designed to reduced the homeowners payments up to 30% of the homeowners loan payments of principal and interest (P&I)

3. During the period of reduced loan payment, the service should work with the borrower to come up with a foreclosure prevention plan. The servicer is expected to come up with a plan in first 3 months and then implement the foreclosure prevention plan by the 6^th month.

To get more information on Payment Reduction Plan, CLICK HERE

This blog post is brought to you by SimplifyEm Pay Rent Online and Property Management Software

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Investment Property Management

BusinessWeek editor Chris Palmeri acquired his first residential rental property in March and faced the usual challenges of property management. Many real estate investors especially the ones who own properties far away from where they live hire a property manager so that they sleep well at night.

Chris a new do-it-yourself landlord was anxious to rent his property quickly and skipped tenant screening. Once landlords are burnt by a tenant they never skip tenant screening. Read 5 tips for tenant screening in today’s market to make sure that you do not make this error.  He has managed to rent his property to new tenants. The best part is that he is looking to acquire another property.

Read his story on BusinessWeek by CLICKING HERE

This blog post is brought to you by SimplifyEm Pay Rent Online and Property Management Software

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Real Estate Investment Property

Foreclosures and REO’s are bringing many investors out of the woodwork. Some of the new investors who are novices are making many mistakes in selecting and purchasing of undervalued residential real estate.

RealtyTimes published an article that discusses a situation where a novice investor purchased a property and outsourced property management to a property manager. The property had lots of defects and improving the property to get it ready for rental proved expensive for this investor. The investor was blaming the property manager for the expenses.

Before becoming a Do-It-Yourself or absentee landlord, the 3 tips that investors should follow for success are:

1. Understand the market you are purchasing your investment property.

2. Be clear of your end goal and write it down

3. Calculate the costs of owning the investment property

These key rules will help you make good decisions when you are purchasing investment property.

This blog post is brought to you by SimplifyEm Pay Rent Online and Property Management Software

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Real Estate Foreclosure

RealtyTrac reports that $134 billion in adjustable rate mortages will be resetting to higher interest rates over the next two years. Foreclosure filings rose 23% nationwide in the quarter as compared to the same quarter a year ago. Sequentially the increase was 5% compared to second quarter of this year.

The top 5 states for foreclosure in 3rd quarter are:

1. Nevada

2. Arizona

3. California

4. Florida

5. Idaho

These foreclosures provide great opportunities for buyers of homes to live in or for investment purposes.  The people who should take advantage of this opportunity are long-term investors – the ones who are experienced landlords or outsource property management to property managers and can hold properties for 7, 8, or 10 years.

This blog post is brought to you by SimplifyEm Pay Rent Online and Property Management Software

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