Important Resdient Screening Criteria!!!!

What’s The Most Important Resident Screening Criteria?

When it comes to screening applicants, each property manager has their own set of criteria that potential residents must live up to. Whatever that criteria is, it’s important that it is applied to every applicant that walks in the door. Establishing a consistent screening process when renting an apartment or a house drastically reduces the threat of discrimination lawsuits.
So what’s important to you? While there are always exceptions to this, a good credit score is a great first indicator that an applicant may be a reliable resident. However, it’s important to note that not everyone with a high credit score is a good resident risk…and that not everyone with a low credit score is a high risk. Other key indicators need to be taken into account as well.
One of those things would be a consistent job history. In fact, this may be more important than the credit score. If an applicant has a stable job history, that usually indicates several things; they’re responsible, they’re reliable, and they’re a decent worker; all things that you’re looking for in a resident. I’d take a stable job history over a slightly low credit score any day.
Good rental references are another solid indicator of an applicant’s level of risk. As with a stable job history, good rental references indicate that the applicant pays his/her rent reliably, will likely not trash the property, and will leave it in decent shape when they move out. What more could a property manager want?
Criminal background is another area that needs to be looked at. While at times this can be a judgment call, violent crime or drug convictions should raise immediate red flags in your resident approval process.
I know some property managers and leasing agents who base a large part of their decision on appearance. This can be a major mistake in a lot of ways. Dress is much more casual these days, and a dressed-down applicant does not indicate that they are unable to pay the rent. More importantly, a neatly dressed individual provides no guarantee that their rent will be paid on time.
While a lot of property managers have developed a sixth sense of sorts when evaluating applicants, it’s important to make sure that your rental decisions are based in fact and documented for your records. Careful attention to the criteria you set will ensure that your good applicants turn into good residents.

Will the cost of renting rise in 2011??

Will the Cost of Renting Rise in 2011?

Even though the Federal Reserve Board and the U.S. government keep telling us that there’s virtually “no inflation” and little if any “inflationary pressures”, most Americans know otherwise.

Major financial news channels like Bloomberg and CNBC are reporting that in many regions around the nation vacancy rates are going down. As a result they say that the cost of renting an apartment or a house has been rising. Will rising rates drive would-be renters to purchase homes?

As the National Association of Home Builders states on their web site “While the national home ownership rate stands at an impressive 68%, millions of American Families struggle to find housing that meets their needs at a price they can afford.”

There have been all kinds of foreclosure numbers proclaimed by the media, so it isn’t an easy figure to ascertain. I’ve read and heard repeatedly that the real number of houses and condominiums going into foreclosure in 2011 alone is closer to 6 million and possibly higher.

This will of course swell the inventory of unsold homes as I recently wrote. It’s also likely to drive property values down. But with the Federal Reserve doing all they can to keep interest rates low and mortgage rates down, there are still people able to buy houses.

Pending home sales improved further in December 2010, marking the fifth gain in the past six months, according to the National Association of Realtors®. This figure apparently is a forward-looking indicator, and it increased 2.0 percent to 93.7 based on contracts signed in December from a downwardly revised 91.9 in November.

The data reflects contracts and not closings, which normally occur with a lag time of one or two months. One has to ask, “Is this an accurate reflection of home sales?” Only time will tell.
It’s like looking at a gigantic see-saw. On one end is the number of unsold and foreclosed houses. On the other end is that nebulous number of actual, qualified home buyers who are out there looking for a home to buy and have the money to make it happen.

Each area and region of the country has varying circumstances and conditions. It’s not fair to compare San Francisco with Chicago. But looking at the major metropolitan areas does give us some clues. One vital factor; how many unsold houses and condos will end up as rentals?

Speaking of Chicago, the Chicago-land Apartment Association forecasts that landlords in that area plan to increase rent as high as 8% in 2011.

In Austin, Texas one of the nation’s top-performing apartment markets, rents are expected to jump nearly 7% during 2011, according to MPF Research. Other areas poised to command higher rents in 2011 due to low multifamily vacancy rates are San Jose, Miami, Boston and Portland.

Austin rental rates on the rise

Despite new developments prices may not come down

Updated: Thursday, 14 Apr 2011, 2:42 PM CDT
Published : Thursday, 14 Apr 2011, 2:42 PM CDT

AUSTIN (KXAN) - Finding an affordable place to live in Austin now getting even tougher.  Even though there are positive signs that construction is picking up again, along with our local economy the effects of the downturn are lingering - especially for people who rent.
 

For two years Rebecca Wernickie has jogged past this once stalled project at I-35 and Riverside Drive.  She's happy to see construction start again but  does worry about when it's complete.

 "It will probably make the property values go up and my rent go up but we'll see," said Wernickie.

  Not out of the question--according to the Austin Apartment Association rents increased 4.6 percent in the last year and apartments are 93.2 percent occupied--and that's rising.

"The market has completely changed.  Austin is hot again," said Orlando Garza with Apartment Finders Service.

Garza says it's now a landlord's market.  There are no more move-in specials, renters must look 8 months in advance and search farther from downtown.
 

"The days of bargaining are pretty much over with," said Garza.

Momark Development President Terry Mitchell says  projects stalled for three years but the city's population continued to grow.

"You keep the supply the same and increase the demand what happens to price it goes way up.  That's what's happening," said Mitchell.

Although four new apartment communities are in the works like one on South Lamar---and 33 are proposed, Mitchell says it's not enough to bring rents down.
 
"I wish it wouldn't happen because in the long run it's an  affordability issue," said Mitchell.

Some renters who's leases are up are seeing monthly rent increases of 50 to 400 dollars or more.
  

Mitchell says that's leading some tenants to explore buying rather than renting.

Top 10 Tax Deductions for Landlords

Every year, millions of landlords pay more taxes on their rental income than they have to. Why? Because they fail to take advantage of all the tax deductions available for owners of rental property. Rental real estate provides more tax benefits than almost any other investment.

Often, these benefits make the difference between losing money and earning a profit on a rental property. Here are the top ten tax deductions for owners of small residential rental property.

1. Interest

Interest is often a landlord's single biggest deductible expense. Common examples of interest that landlords can deduct include mortgage interest payments on loans used to acquire or improve rental property and interest on credit cards for goods or services used in a rental activity.

2. Depreciation

The actual cost of a house, apartment building, or other rental property is not fully deductible in the year in which you pay for it. Instead, landlords get back the cost of real estate through depreciation. This involves deducting a portion of the cost of the property over several years.

3. Repairs

The cost of repairs to rental property (provided the repairs are ordinary, necessary, and reasonable in amount) are fully deductible in the year in which they are incurred. Good examples of deductible repairs include repainting, fixing gutters or floors, fixing leaks, plastering, and replacing broken windows.

4. Local Travel

Landlords are entitled to a tax deduction whenever they drive anywhere for their rental activity. For example, when you drive to your rental building to deal with a tenant complaint or go to the hardware store to purchase a part for a repair, you can deduct your travel expenses.
If you drive a car, SUV, van, pickup, or panel truck for your rental activity (as most landlords do), you have two options for deducting your vehicle expenses. You can:

• deduct your actual expenses (gasoline, upkeep, repairs), or
• use the standard mileage rate (51 cents per mile for 2011; up from 50 cents per mile in 2010). To qualify for the standard mileage rate, you must use the standard mileage method the first year you use a car for your business activity. Moreover, you can't use the standard mileage rate if you have claimed accelerated depreciation deductions in prior years, or have taken a Section 179 deduction for the vehicle.

5. Long Distance Travel

If you travel overnight for your rental activity, you can deduct your airfare, hotel bills, meals, and other expenses. If you plan your trip carefully, you can even mix landlord business with pleasure and still take a deduction.
However, IRS auditors closely scrutinize deductions for overnight travel -- and many taxpayers get caught claiming these deductions without proper records to back them up. To stay within the law (and avoid unwanted attention from the IRS), you need to properly document your long distance travel expenses.

6. Home Office

Provided they meet certain minimal requirements, landlords may deduct their home office expenses from their taxable income. This deduction applies not only to space devoted to office work, but also to a workshop or any other home workspace you use for your rental business. This is true whether you own your home or apartment or are a renter.
For the ins and outs on taking the home office deduction, see Home Business Tax Deductions or Every Landlord's Tax Deduction Guide, both by Stephen Fishman (Nolo).

7. Employees and Independent Contractors

Whenever you hire anyone to perform services for your rental activity, you can deduct their wages as a rental business expense. This is so whether the worker is an employee (for example, a resident manager) or an independent contractor (for example, a repair person).

8. Casualty and Theft Losses

If your rental property is damaged or destroyed from a sudden event like a fire or flood, you may be able to obtain a tax deduction for all or part of your loss. These types of losses are called casualty losses. You usually won't be able to deduct the entire cost of property damaged or destroyed by a casualty. How much you may deduct depends on how much of your property was destroyed and whether the loss was covered by insurance.

9. Insurance

You can deduct the premiums you pay for almost any insurance for your rental activity. This includes fire, theft, and flood insurance for rental property, as well as landlord liability insurance. And if you have employees, you can deduct the cost of their health and workers' compensation insurance.

10. Legal and Professional Services

Finally, you can deduct fees that you pay to attorneys, accountants, property management companies, real estate investment advisors, and other professionals. You can deduct these fees as operating expenses as long as the fees are paid for work related to your rental activity.

Did You Know?

Did you know that:

• Landlords can greatly increase the depreciation deductions they receive the first few years they own rental property by using segmented depreciation.
• Careful planning can permit you to deduct, in a single year, the cost of improvements to rental property that you would otherwise have to deduct over 27.5 years.
• You can rent out a vacation home tax-free, in some cases.
• Most small landlords can deduct up to $25,000 in rental property losses each year.
• A special tax rule permits some landlords to deduct 100% of their rental property losses every year, no matter how much.
• People who rent property to their family or friends can lose virtually all of their tax deductions.

I can't sell my home in this market, should I consider renting it out?

A homeowner who is able to sell a property at the asking price has the potential to reap a profit, but what happens when an individual is having trouble unloading a property? In this case, it might make more sense for the homeowner to keep the home, but rent it out to cover the bills.

But wait. If you're considering renting out a property rather than getting rid of it, know that this isn't a quick-fix option. There are benefits to becoming a landlord, but there are also a number of very costly pitfalls. Read on to find out when it pays to rent out your property and how you can cash in.

The Benefits of Renting Your Abode: There are a number of reasons why a homeowner may prefer to rent out his or her home:

1. A Sluggish Economy: In a sluggish local economy, the odds that the homeowner will receive a bid close to the asking price are not likely. Renting out the home will provide the homeowner with supplemental income, while also providing some time in which housing prices may rebound. This would allow the homeowner to get a better price for the house when he or she finally does sell. 
2. Property Upgrades: If the property could use some improvements before it is sold, renting it out could provide the time and income to do this. Repairs are generally tax-deductible for rental property owners. 
3. Life Upgrades: Homeowners that own their homes outright (their mortgages are already paid off) may find that renting out a home in a slow real estate market can provide financing for another venture.
4. Market Timing: A homeowner might want to rent while holding out for a higher profit on the sale of the home. Suppose an owner would like to sell his home and could do so now for a small profit. But he thinks that six months down the line, the demand for property could increase dramatically, resulting in a higher selling price. In this instance, renting out the home for those months may help cover some or all of the mortgage and taxes, while providing the homeowner with a chance to sell at those later numbers.

In these instances, a renter provides income to cover the homeowner's mortgage while the property is being worked on, or until the economic cloud lifts. This way, the homeowner can reap the benefits both of renting and of selling the property.

The Drawbacks of Being a Landlord Renting a home isn't always as simple or as glorious as it sounds. In fact, there may be a few sticking points to consider. Some examples of renting negatives include:

• Having strangers in your home. Many people don't feel comfortable about this, and it will generally add stress to their lives.
• Being a full-fledged landlord isn't always an easy task. There will be regular maintenance that needs to be done on the property, and you (as the owner) are responsible for it.
• Some renters may not pay their rent on a timely basis - or at all - leaving you covering costs and payments in their absence.
• Property taxes tend to rise over the years, which could have an impact on profit.

Renting Your Home in Five Steps Despite the added work and stress, you may still want to bring on some renters. If so, let's take a look at a few tips that should help make the process easier and more profitable.

1. Study the Market: Check local newspapers and with local REALTORS to see what comparable homes/properties are renting for in the neighborhood. This should help you establish a fair rental price.
2. Prep the Home: Renters may not take care of the home or its furnishings; therefore, the owner might consider removing breakables and personal items so as to avoid damage and potential arguments.
3. Find a Renter: Consider advertising in local newspapers, in the brochures and bulletins found in supermarkets, and on website classifieds. The idea is to try to get as many people to view the rental details as possible, so that you are left choosing your renter, rather than having to go with the only renter who expresses interest in your place.
4. Interview: Consider meeting with the potential renter rather than simply dealing over the phone. Knowing who will inhabit your home may put your mind at ease and help you weed out unsuitable candidates.
5. Spell Out the Deal: You should consider contacting an attorney (particularly one that specializes in real estate) to help see you through the rental transaction. Hiring a Property Management company that deals with these transactions everyday would also be a great benefit as they are governed by laws, and rules, and ethics.   The lawyer/PM Company should be able to provide or help draft a rental agreement/contract. Consider any stipulations you want in the paperwork (like late fees, lease terms, payment due dates, etc.) and make sure that the attorney includes those items.

Bottom Line
When a homeowner is having trouble selling his or her home, there are many cases where it may make sense to simply rent out the property while waiting for conditions to change. However, when doing so, owners should do their homework and check going rental rates, prep the home for renters, and make sure they have a binding legal contract.

Hiring an expert in Proeprty Management

Once you have invested in a rental property, the responsibility of maintaining and running the property can quickly become overwhelming. For many landlords, the logical solution is to hire a property management company to oversee their rental property. But is this the right decision for you? Here are several issues to consider.

1. Do you have what it takes to run a rental property? If this is your first foray into property management, you could find yourself in over your head. Collecting rent may sound easy, but in reality, it can be more like a painful extraction. If you are not familiar with rent collection, you can quickly find that your tenants are taking advantage of your inexperience.
   In addition to rent collection, day-to-day maintenance of a rental property can be tiring. If you are not operating your property as a full-time job, you may not have the time to address tenant concerns and repairs in a timely manner. This may make hiring a property management company an excellent choice.
2. Where is your rental property located? If you have purchased a rental property near your home or place of business, you'll be able to keep an eye on the property. However, if your rental property is far away, you'll be loath to travel to it to deal with the inevitable problems that arise. If you're unable to check on the property on a regular basis and handle any issues that may arise, finding a local property management company can mitigate these concerns.
3. Does the property need frequent visits, repairs, or attention? If your rental property is a veritable money pit, you can find yourself spending more time there than at your regular job. If you're getting constant requests for repairs to a property, having someone who can devote the majority of their time to your property is very helpful. The more units you have, the more you can benefit from a professional maintenance worker or property management company.
4. What services do you need? If you're looking for a small amount of assistance, such as monthly rent collection, a full-service agency may be too much for your needs. Since you'll need to budget in the fees charged by a property management company, this will cut into your profit margin. Therefore, instead of hiring a full-service company, you may be better served by a part-time property manager or specialist who can handle the most frequent problems. On the other hand, if you do need a complete solution, make sure that the company can provide you with all the services you require. For example, if you need someone who is capable of light maintenance work in addition to rent collection, keep this in mind while you shop for a property management company.
5. Is the company trustworthy and friendly? Before hiring a property management company, do thorough research to ensure that it is reputable. If you are an absentee landlord, this is extremely important. You will be relying on this company to collect rent and represent you and you interests. Check references and talk to other landlords who have worked with this company. Make sure the representative of the property management company is level-headed and diplomatic. Just one bad interaction between tenant and rent collector can destroy goodwill that can take years to restore.

Hiring a property management company should result in more free time and less worry for you. If you hire a property management company and find that you are still constantly worrying about your property, you may need to restructure your schedule to spend more time at the property, or have more frequent communication with the property management company.

Welcome to eRealty Services!!

eRealty Services is a premier real estate business with over 15 years of combined experience managing residential property. We have the expertise to maximize your investment income and minimize vacancy periods. Whether your relocating for a new job, just purchased an investment property, or moving into a second home and leasing your existing property, WE CAN HELP.
Simply put, our business depends directly on the satisfaction of our clients. Our staff will provide you with the best customer service while keeping you informed of the process step of the way. Never disappointing, our team is ethical, honest, and dependable. eRealty Services will manage every aspect of leasing your property and take every measure necessary to reduce the time the property is vacant. As experienced investors, we know and understand first hand what’s required to manage, maintain and oversee your real estate investment.

Our company is a member of the Chamber of Commerce, an accredited business with the Better Business Bureau, and members of the Austin Board of Realtors.
We invite you to discover the key aspects of our property management company including our professional management and leasing services. Our company provides prompt, professional and courteous service.


Sincerely, The eRealty Services Team