All Forum Posts by: Jane A.

@Eamonn McElroy  In Midwest region if you have 75% mortgage on your rental and you invest in good area (not super cheap with high cashflow and high risks), your numbers may look like this: 50% of your cash goes to Mortgage -Insurance -Taxes, your interest, Ins and RE Taxes are tax deductible. 10% of cashflow may be you Property Management expenses, 10-20% may be your repairs and improvements.  Depreciation is about the full price you paid divided by 27.5 or so - this you could deduct each year as well.  So you taxable income depends mainly on your direct expenses - losses (vacancies, evictions and repairs/improvements). On tax return you could deduct some expenses during the same year or during 3-5 years or even longer, it give you some freedom.   After depreciation you may end up with some taxable income for rental part of your RE business, but I do not see that it could be 1/3 or 1/4 of cash flow.  You may pay high taxes only if you do not use the mortgage and if you would decide to not depreciate.   Rule of Thumb is that RE business gives you a lot of flexibility, your W2 gives you access to bank's money - you will love your job much more as you will start investing in RE :)  If you would invest in super cheap areas with high cash flow and less demand for improvements / renovations (slumlord business model) you may see higher taxes, but it means that you left with more cash in your pockets :)

Hold on, you are building equity at least, in NY area negative $100 is not too bad :) raise the rent and you will be even with growing equity.  As I remember, during the last crash NY area did not look bad at all (correct me if I am wrong), only CA, FL &  AR experienced 3 times fold.  Some areas were not so bad.  If you think that you (NY) is almost on the top of the cycle and you want to fix your profit - go for it and invest money in better cash flowing regions (my favorite is Kansas City Metro area :)   or just wait with cash for better prices in NY :)  there are a lot you could do with cash (buying property at actions is one of them).  It looks like you have pretty good job.  You may want to explore different ways to make money in Real Estate and think, what could work better within your life style.  You cash may look much better at your Roth IRA accounts which will be invested in RE (leveraged with non recourse mortgage if you are up to it).  You may want to think strategically before making any decisions.   There are a lot of strategies in RE - from very active to mostly passive.  Choose what will work better for you.

@Joseph DiFelice

I usually need help with tenants turn over - move out ins ection, renovation / repairs, finding new tenant, most of things coykd ne done remotely in our days, very few things may need personal touch like tenants turnover and big renocation.

Aaron, Thank you SO MUCH!  in my experience for PM company it takes much longer to fill the vacancy and run the renovation - some loss of income here as well on the top of standard PM fees

In similar cases, I am just super happy that this issue did not turn into much bigger :)))

Merry Christmas to everyone!

I have a question:

Does PM decrease the efficiency of your Rental business?

I mean, additional expenses connected with PM company?

Like longer vacancies, longer renovations, higher expenses for renovations, etc.

By the way, how do you measure the efficiency of your rental property management and how big is the difference between self-management and using the PM company in terms of money.

What are your key criteria for choosing the PM company?

Thank you!

J

@Wesley W.

I like this: "(m) You and/or your guests are not allowed on the roof at any time."

you never know how creative people could be :)))

@Wesley W.   AWESOME!  I will update my list :)))

Sure, Zelle is used by all major banks and transactions are FINAL!!! this is the key!  Almost all other payment systems could cancel the transaction, but Zelle is final, at least my banker promised this :))) and your bank account is not exposed to the tenant.  We used to collect checks in PO Box as well, but at some point turned all the transactions to effortless.  Some people use our deposit coupons and deposit the rent in the bank, some use their own online payment tools, some use Zelle, Cozy, ClearNow.  We do not care as long as payment gets to our bank account :))) 

Yes, I use COZY :)))

Historically happened this way, that some tenants use ClearNow to pay the rent, sometimes even PayPal :))) somebody uses their own apps to make payments.  I like Cozy because it is easier to sign up, free and tenants could use Credit Cards if they want.  I tried to use Buildium but found it is not friendly at set up stage, so I quit.

For listing I use only Zillow, no signs or Craigs List - a smaller volume of better quality prospects.  I plan to try Cosy for listing as well, hope it will send it directly to Zillow :)))

I use Quickbooks for tracking cash flow
Zillow is implementing tenants screening and payments, so they will dominate the market soon after they will add main features. 

For managing different legal entities and different accounts I found that www.rentmanager.com will work the best and has very reasonable price and almost unlimited functionality.

Regarding Cozy, it will be great if it will be able to manage different entities from one account, so I will be able to send rent from different properties to different accounts.  

Cozy definitely has potential, it feels user-friendly.  If you guys will be on the top of the main functionality for small landlords (up to 30 units or so), you will win the game in this segment.