All Forum Posts by: Account Closed

Depending on your State Law, some must live inside the rental for a year in order to sell it (flip it).  So check your state laws. 

Next, rental property is called a fixed asset.  You will want to list the property (purchase price (costs) of the property) as a fixed asset.  And any upgrades to it you will want to list as a fixed asset as well.  (but make it a sub-account of the property so that the expenses to fix up the property will be added to the total cost of the property in the fixed asset account of QuickBooks).  QuickBooks adds this to you automatically when you do this through the Fixed Asset Account in your Chart of Accounts and by listing your expenses as a sub-account. 

Then when you sell the property you will sell it as a Cost of Goods sold,  (General Journal Entry) which will deduct your expenses from the sale of the house, lowering the profit made from that house,

For Example:

Let's say you purchased a house for $35,000.00 and you fixed it up and the total amount of money you spent to fix it up was $7,000.00.  So far your expenses for this house equaled $42,000.00.  

You put it up for sale and sell it for $100,000.00.  Well, you really didn't make $100,000.00 on this house because you spent $42,000.00 to buy it and fix it up.  

By making the fixed asset now a Cost of Good Sold, QuickBooks deducts the $42,000.00 in expenses from the $100,000.00 (the selling price) leaving you with an actual profit of $58,000.00, which is what you will pay taxes on.  Not the $100,000.00.  So this is very crucial, because who wants to pay higher taxes when you really didn't make that much money at all.  Right?

Nancy Neville

Everything in the world is mastered by knowledge, but one must WANT to study it in order to achieve that knowledge.  

The same thing applies to investors being landlords.  Do we just jump in without a clue as to what being a Landlord involves?  Perhaps.  Most of us do and pay a hefty price for the lack of such knowledge.

Keeping track of our finances in this business is just as crucial as keeping tenants long term.  If we don't know where we stand financially any time of the day, then we are lost. and we end up being confused, and not knowing where to turn. 

Choosing a software program to keep track of our finances is a tough decision.  There are so many of them out there.  But there isn't any software program out there (except QuickBooks)  that will allow us to CUSTOMIZE it personally for our Industry, or for US personally.  And since most of us use a CPA or should in this business to do our taxes at the end of the year, we want a software program that will benefit us all through the year.  This makes it easier for us to give our CPA a clean Profit and Loss Report which in the end SAVES YOU MONEY!!!!! Because CPA's charge usually by the hour or how much work it takes to figure out your finances.  QuickBooks makes it easier for everyone and that is why CPA's LOVE QUICKBOOKS.

You say you have used QuickBooks, and hired others to use it and enter data for you but with no success. That's because not many people, who are OUTSIDE of our Industry know how to use QuickBooks and this is a very crucial part of why people don't have success with QuickBooks. 

There are QuickBooks Experts out there, next to none, but they are not experts in our field.  Our industry is like none they've ever seen.  So it takes a QuickBooks Landlord Expert to teach you how to use QuickBooks and show you how to customize it just for you.  I know QuickBooks inside out, but I couldn't just jump into a Retail Industry and teach them how to set up their company 100%, because I don't know how they operate 100%.  Or teach a medical facility how to set up their company because I don't know the language or terminology to teach them 100%.  What I could teach them would be basic, and that's what you get when you hire someone who is not a landlord expert. You'll just get the basics and nothing more and it's not their fault. 

The bottom line is this.  Whether you choose QuickBooks or some new kid on the block, you're going to have to learn how to use it, plain and simple.  

I hope this has helped.

Nancy Neville

It depends on your personality.  If you go into this as seeing your property as a tool of the trade, and not the love of your life, and expect damages and evictions and knowing you will have to fix it up every time a tenant moves out,  then you can make a nice living out of it. 

It also depends on the type of court system you have.  Are the Judges leaning more towards the tenant than to land-lords?  My properties were in Detroit and believe it or not, their court system was fair.  But we also had homes in the City of Inkster and they were the pits.  I could tell you nightmares that I faced dealing with that court.  The Judge there has since been fired.  Yahoo!  

If you can keep your cool, and let the courts and the legal system do their job, then you can do it. 

If you can be fair and balanced with your tenants, yet be stern and stick to your lease agreement, then you will make it. 

But if you get mad easily, then I say no way...... It takes a lot of practice, a lot of not responding right off the cuff when you have to deal with junk, but it does pay well if you can gain the respect of your tenants, and take care of their repairs whenever they call.  They will stay long term.  And that's what you want no matter what type of property or neighborhood our rentals may be in. 

I dealt with hard-nosed druggies.  (Couldn't prove it, but the neighborhood was known for it) and it was a hard to rent rental because of it.  I don't know if he was a dealer, I didn't ask.  But I was fair with him, but I expected my rent to be paid on time,  and at first I had to get on his butt to get him to pay on time, but he finally did, and he showed me respect despite of my not backing down,  and he lived there a long time.  He kept the place nice too.  He appreciated having a nice home to live in, even though it was in a rough neighborhood and had a reputation.  Police were never called there and he had a good job and kept to himself.  He was a big brut of a man, so I guess not too many people would challenge him, I suspect. He just wanted to be left alone. 

My husband and I didn't buy properties in bad neighborhoods, they just developed into them after several years had gone by.  But most of our rentals were still in good neighborhoods.  Low income neighborhoods, but good neighborhoods, which reminds me of a story about a tenant I had  who lived in one of our really nice 4plex apartment building.  (Judges used to live on that street).  

Well, we just put $100,000 into that property to fix it up and one the tenants started complaining about it being cold in the house during the winter.  When a tenant called, I immediately took care of their repair request.  But each time my husband and I went out to the property to take a look, we couldn't find out why it was cold in there.  (Their drapes were drawn and Venetian blinds closed shut.  I asked them if their windows were opened and they said no.  I couldn't imagine why it would be cold in their when we just spent an arm and a leg on all Anderson Windows in that home.  

About a week later he called the Building Inspector on us.  Of course, we passed because the building was just remodeled, and he didn't even call us first this time.   When we heard he called the building inspector on us my husband and I went over there right away and he and his wife stepped out on the porch and started yelling at us, calling us names, calling us a slum lord.  

Because he was a very large man and was getting out of control, I ran back to the car, grabbed my small tape recorder, shoved it  under his nose (I'm only 5'2") and told him if he had anything to say to speak into this.  Well his wife ran up the stairs crying as he started to stutter.  As he was stuttering I looked up at his apartment and I saw that all of his windows were opened.  With the recorder still on I said to him, well I see now why you're cold.  It would help if you CLOSED THE WINDOWS!  I took pictures of it, and he ran up the stairs yelling, we're moving!

Now, this guy had a great job, dressed in a suit all the time, but wasn't a very good tenant, was he?  So it just goes to show, that just because we may have properties in low rent areas doesn't mean that the tenants there are worse than the so-called respectable tenants because they happen to live in a better neighborhood.  

You see I didn't get mad, I just dealt with it in a different manner.  No sense in arguing.  He had a lot to say, so why not record it.  It certainly shut him up pretty quickly.  Funny how he couldn't think of a thing to say with that red button all lit up right under his nose. 

Nancy Neville

Jonathan does a lot of missionary work.  He may be in another country right now. 

The list above is somewhat hard to read.  Very small, but you can Google them and get an expanded version of the list.  But here is a list of my own that I put together a few years ago.

Here is a good list that I found online via Hud regarding words we can us and cannot use when we refer to our homes either in ads, or selling etc.  

Click on the screen shots in order to expand.

Nancy Neville

The Media vs. the Landlord

WARNING!!!

What you are about to read are some of the things that have happened to not only me, but to other landlords across America.

Please note that I don’t write this to scare you. I write what I write because these are things you need to know and to prepare for!!

You have invested tens of thousands of dollars into a rental home, some are over a hundred thousand that you have paid for a rental home, and I just can’t sit by and watch new investors invest that kind of money into a rental home and not know the things they really should know.

I have seen many new investors, invest tons of money into a rental property that couldn’t make it, and their marriages ended up in divorce and they lost their investments and all their money.

You may never see what I post in your life-time, but I guarantee you that you will be an extremely lucky person if you don’t see at least one thing that I show you in my photos.

I have rented to doctors and police officers and they have done damages just as bad as some of the tenants that were low income. Therefore, the photos I show you are not from any type of individual or income level. They just are from some tenants that just don’t care. (And these tenants were screened well, and Security Deposits were collected. But sometimes, even a Security Deposit doesn’t cover the damages that are done)

So, here we go.  (click on the photos to expand them)

 For years now I have been trying to educate the courts and the media as to who we (landlords) really are. When asked, most will respond by saying that Landlords are greedy people who care nothing about the tenant, but only cares about the money! In other words, they view us as the “Dastardly Landlord”

The courts, the media, and the tenants believe that landlords have rental properties that look like the following pictures.

CLICK ON THE SCREEN SHOT TO EXPAND IT

Here is a screen shot of my Tenant Billing.  Both my tenants and myself can see at a glance their move in date, their Security Deposit, their monthly rental amount, and when their lease expires.  

QuickBooks allows us to send our tenants these invoices via E-mail or snail mail.  

Lets see what else QuickBooks can do.   It will tell you when a tenant is late and how late they are just at a glance.

See the orange circles, the later the tenant gets the more red it gets and QuickBooks will tell you how many days their rent is over due.  

It just doesn't get any better than this. 

Nancy Neville

Whether you have one property or 100 you should have an ACCOUNTANT who will do your taxes (not your bookkeeping) at the end of the year. 

QuickBooks is what you need to handle and organize your bookkeeping records that you will give to your ACCOUNTANT at the end of the year.  You do not need to hire a bookkeeper.  You can do it yourself, and it will only take you a few minutes a day to enter your data.  The more organized you are, the easier it will be on your ACCOUNTANT and cheaper for you.  (the more work your accountant does for you the more you have to pay)

Because you will have an accountant to do your taxes and not you, (You never want to do your own taxes in this business, because chances are if you do, you may be audited more than someone who has an accountant) is because they know how to give the tax reduction breaks that you have no clue about.  They are the experts and not us.  

QuickBooks is cheap, its easy, most CPA's use it and recommend it, and its been around for a long time. It is also a write off or an expense account. 

Contrary to what people think, QuickBooks is easy to use, and it is your very best friend.  

Can anyone say they can buy a software program and jump right in and know everything it can do?  No, we have to play with it or read it, or hope someone else can teach us.  

Once you are shown the POWER OF QUICKBOOKS and how easy it is to use, you won't want to use another software program.  

You will be able to enter in everything about your properties you want to know.

You will be able to see how much money you spent on repairs for the building or for the unit and how much money you made for that unit, or that apartment, less expenses giving you your bottom profit or loss.  And you will be able to see your bottom line at any given time night or day.

You will be able to type in your land description, the year you purchased the property, when you sold it, whatever you want to see and know you can enter it into QuickBooks.

What I like the most about QuickBooks is that you can CUSTOMIZE it to fit YOU.  I don't know of any other program that will allow you to customize it.  

I have customized my invoices (I bill my tenants for rent.  I do this because I chose applicants who paid their bills on time.  when you treat rent as a bill, the tents view the rent as a bill and no longer as something that can be paid any time they want during the rental month).  On the Invoice I show what their monthly rent is, how much of a security deposit they paid, and the date they moved in.  This way there is never an argument about how much they paid as a security deposit, or when their rent is due. 

Once again QuickBooks is a power house, specially for the small amount of money you pay for it.

Nancy Neville

Chinmay, i didn't take your post as insulting me.  I appreciate your input.  

Nancy Neville