While renting property is a great source of income it does come with its challenges. Property management companies are hired to handle these challenges along with other responsibilities such as hiring vendors to handle services around the property.
Whether for an apartment high rise or a condo/housing community, property management companies strive to provide the very best services for residents. The services handled by the property manager vary from community to community but they are always paid for by the home owner’s association (HOA) dues and are executed by vendors. Property management companies seek out vendors using very specific requirements.
With the price of housing skyrocketing in many areas of the country, wages not keeping pace with the cost of living and high student loan debt among Millenials; not everyone can afford to get into the real estate market at all let alone purchase a rental property. For those who can afford to purchase a property for rental purposes, there is the potential to earn a healthy monthly income because of the high demand for rental housing. Still, choosing the right rental property to purchase is important. It is advisable to perform a valuation analysis of real estate rental properties before making a purchase.
When selling property on the open market, a real estate agent and legal team handle the property title transfer. When transferring a property title to a friend or family member without selling the property, however, there may not be the incentive to hire a real estate agent which means a necessary understanding of the process. Every state has its own specific variations for the process but the main rules remain the same across the board.
Real estate is one of the best-paying investments. It offers several advantages including:
- property appreciates in value over time along with rental income
- it can be a good source of passive income because daily or hands-on property management is not consistently required
- overhead expenses are low compared to returns
- housing is always in demand regardless of the state of the economy
- it is an investment that can be inherited by beneficiaries who can keep earning income
Condo association fees help pay for the upkeep of community spaces and siding/roofing. The list of services can vary widely and include everything from the doorman’s salary to pool maintenance, security and landscaping. With everyone’s money pooled together, the condo association can effectively maintain the property.
There are many questions regarding a homeowners association (HOA) when it comes to taxes. How does it file taxes? Does it need to pay taxes at all? Can the association file as a non-profit organization? With some research into federal tax rules for a homeowners association, the answers become clear.
Does my homeowners association have non-profit status?
When a pet owner is a tenant or owner in a property run by a homeowners association, there are often rules governing pets so that they don’t infringe on the rights of other owners and tenants. A homeowners association is responsible to handle pet problems within the homeowners association as quickly and efficiently as possible. The goal should be for everyone to get along rather than forcing the pet owner to give up their pet, whenever possible.
In today’s technology-driven era, there is software available that can make residential property management so much simpler. However, the person in charge of using the software needs to understand the basic accounting concepts used in the software.
Chart of accounts for residential property management
Residential property management offers several key cost savings to property owners. While the property owner gives up direct control of day to day management, in exchange, he or she can benefit from time savings, reduced repair, security and landscaping costs. Additionally, property owners will benefit from increased or maintained property values as the property is kept in good repair and appearance.