Archive for July, 2012

Attractive Nuisances – An Unattractive Nuisance

July 17th, 2012

Property owners these days must be even more careful not to attract law suits and compensation cases against them. More and more ways to claim money against a home owner are showing up, and since as a home owner, you have the equity to help you to pay up – prevention is the best antidote.

It may surprise you to learn that nowadays, instead of charging someone with trespassing when they wander onto your property, you may be faced with a charge to compensate them, even though you didn’t invite them to ‘visit’ you!

The good old North American tradition of not fencing your yard may be on the wane! There have been several cases where a child has hurt themselves in a yard, and parental responsibility has been superseded by the yard owner’s responsibility. This is because the owner (unwittingly, no doubt) had an ‘attractive nuisance’ in his yard!

No, this does not mean a dog – necessarily. It appears that it could mean almost anything. Cases have been fought involving a piece of sheet rock, a hole in the ground, stairways and even the family lawnmower!

You may think that it would seem reasonable to have a stairway or a lawnmower in your garden, but try getting that past the judge! In a three pronged attack you, the owner of the property, become responsible for any injury that happens when a young intruder is checking out an attractive nuisance! » Read more: Attractive Nuisances – An Unattractive Nuisance

Must Read for Future Property Owners-Managers of Apartment Buildings

July 17th, 2012

Now you have the property. Next step is to decide if you want to manage the property your self, or hire a property management company. If you want to manage the property your self, you should get training from your local apartment association. They have classes to help you. Also, you should read on property management. Don’t just jump in and start being a land lord and not know what you are getting your self into, and what demands/requirements are needed.

If you decide the you would like to get a property management they will take 5-10% leasing commission of annual rents. I suggest that you go to http://www.irem.org and find a property management company in your area. Once you have selected a group to call, ask them the following questions (or you can go to their web site and find answers to the questions below):

o How long have you been in business?

o What professional designations do you hold?

o What continuing education programs do you offer your employees?

o Can you call existing clients of theirs?

o What software do you use for managing property and why?

o Can you get a sample management agreement to review?

o What costs are included in the agreement and what is extra?

o How many employees?

o Who will be the main contact? How long have they been with the company?

o What cost saving techniques do you use?

Once you find a property management company, sign them for a 120 day contract to see how they perform. Assign maintenance issue on one of three levels of importance:

1. things that have to be done

2. things that should be done

3. those things that would be nice to have done

Once you find a property management, have the both of you brainstorm and ask figure out, “If some one were to buy your property today, what changes do we think they would make in the first 60 days”?

As soon as you control the property try to get a Cost Segregation Study.

Cost Segregation

The IRS has a ruling that allows commercial-property-owners to increase the amount of accelerated depreciation allowed in a tax year. These savings extend back to property acquired after 1986, and they apply to new or future construction. They also extend to existing buildings under renovation, expansion and leasehold improvements, as well as to property about to be acquired. It can also be used for financial accounting, insurance and property tax purposes. The primary goal of a cost segregation study is to identify all construction-related costs that qualify for accelerated income tax depreciation. Cost segregation is not a tax shelter and it is not tax evasion. » Read more: Must Read for Future Property Owners-Managers of Apartment Buildings