3 down, 8 to go. 11 clients and approximately $1000/month in income is at stake, not monumental but significant for a small property management company like ours. CA Franchise Tax Board has been playing around with the tax code, and it looks like our industry is next in line for their wrath.
The Franchise Tax Board enacted a revision to the tax code in February, retroactive to 1/1/09, making it the property manager's responsibility to withhold and remit 7% of rental payments sent to owners that reside out-of-state, and even more for those outside the U.S. Because there was little notice, there was no way to avoid this train wreck of a new law from affecting our clients. The withholding rule only applies once the landlord has earned $1500 in a calendar year, so it is awfully convenient that they passed the law in February retroactive to 1/1/09. Had we known about this last year, we could have taken steps to protect our clients from it's effects.
Like any new tax rule, this one has loopholes. The biggest of which- if the tenant pays rent direct to the landlord, no withholding is required. Great- now when we call our clients to tell them we are holding back 7% of their money, all they have to do to get out of further withholding is fire their property manager. So far, no one has taken that option, as they still recognize the importance of having someone local to address regular maintenance as well as emergencies.
The other loophole still adds significant work to our task list. If we pay all home related expenses (mortgage, utilities, property taxes, etc.) then we only have to remit 7% of what is left, and 7% of nothing is still nothing. In the interest of keeping our 11 out-of-state clients happy, we are offering free "bill-pay" for all home-related expenses. Anything we can legally do to keep our clients' money out of the hands of people that will only waste it (because isn't that what we've seen them do for years?) is worth the effort, in our opinion.
3 out of 11 clients have made the decision to stay with our company despite the new law. The remaining 8 are weighing their options, but we expect to lose at least 1-3 clients over this. It is going to be an interesting month.
Another rainy weekend here in Sacramento. The weekend was, by all accounts, supposed to be slow. My friends and family have this picture in their minds of property managers like me- usually it involves sitting with my feet up on a desk, greedily counting the rent money as it flows in, effortlessly and never-ending. If only that were the case....believe me, it's not.
Property Management can and does have it's perks- we are not as dependent on a good sales market and typically thrive in a downward cycle, though we do feel the economic pinch when our owners and tenants are laid off. We do not make the big commissions like our sales brethren, sacrificing the "feast or famine" pay scale in favor of a slower, steadier and more stable (usually) business model.
We certainly do get our surprises, however. This weekend was "supposed" to be slow. So far, we have handled 1 unscheduled move in (in order to accomodate a tenant that was being forced out of their previous rental due to foreclosure on the landlord), 2 emergency calls for heat and plumbing, and 1 unscheduled move out wherein a tenant (an inherited tenant that we did not place) was in the process of being deported, leaving the rental unit open and unattended.
Being a property manager means staying flexible, able to respond quickly and effectively regardless of the timing or situation. We were able to gain entry to the unit today, lock the unit to prevent further damages, and turned off the water to stop a leak that was costing the landlord money. The locksmith has been called to change locks, and our contractor will be there tomorrow to commence turnover repairs. This unit will be rent-ready again before this Friday.
A lot can and does happen over the weekend. If you employ a property manager, thank him or her for being on call 24/7. Ours is a complicated profession, not understood by many for the tangled web of responsibilities that it truly is.
Investors Choice Property Management (ICPM) manages 110 single-family units with the care and diligence our Landlord clients deserve, in a manner that has them referring their friends, co-workers and family members. With over 16 years professional property management experience, our business is 95% word-of-mouth referral, we do NO Sales, we do NOT markup repairs, and pay among the highest referral fees in the industry for management accounts. Visit our website at www.investorschoicepm.com today for more details, and find out what we mean when we say:
“Experience Property Management the Way it Should Be.”
We did it again. For the.....(pause while counting).....let's say "umpteenth" time, we managed to secure a fantastic applicant on one of our homes, even though ours was one of a dozen homes these people were calling on and we were NOT the cheapest rental.
How did we get the applicant over our competitors on Craigslist...what's our secret? It is nothing special, yet in this age of automation where everyone is so dependent on voice mail, perhaps it is somewhat unique. We answer the call. In this case, the caller was transferring here from the Bay Area, called on at least 12 other ads within the previous 24 hours, yet ours was the only company they could get through to, or get a call back from within 2 hours or less.
On this particular day (yesterday), we took the call live, scheduled the showing within the hour, met the applicants, collected their applications, and had them approved for tenancy this morning. Yes, this morning. That is secret #2- we work when there is work to do. We are one of the very few property management companies that will show and process move-ins on the weekend, to be as accommodating as possible for our incoming tenants.
This is just one area where personal, professional property management can really make the difference in a highly competitive market. We have consistently leased properties through superior service, shorter callback times and more flexible appointment scheduling.
I'd blog more, but have to get on the road. It is Saturday morning and we have a move-in to do for yet another satisfied client.
Investors Choice Property Management (ICPM) manages 110 single-family units with the care and diligence our Landlord clients deserve, in a manner that has them referring their friends, co-workers and family members. With over 16 years professional property management experience, our business is 95% word-of-mouth referral, we do NO Sales, we do NOT markup repairs, and pay among the highest referral fees in the industry for management accounts. Visit our website at www.investorschoicepm.com today for more details, and find out what we mean when we say:
“Experience Property Management the Way it Should Be.”
We caught another clone-scammer today. They had stolen one of our digital photos posted on Craigslist and duplicated our ad. 2 people reported getting responses back from what they thought was a landlord, asking them to send an application and "good faith" deposit. It is amazing how many cheats there are out there, but here a few tips for spotting them before they make a victim out of you:
1. Never rent a property unseen. Walk through the property with an agent, and get a business card.
2. Never place your trust in someone just because they "sound nice".
3. Scammers will often invoke religious undertones (we need to rent the home quickly because we are leaving to do missionary work). That is not to say everyone that mentions religion or god is a bad person, but it is often used as a tool to gain trust, so beware.
4. If a deal sounds too good to be true, it is. The clone scammer that we caught under priced our ad by $300, advertising a $1300 home for $1000.
5. Make sure the person you are dealing with is a legitimate party. Title companies can look up registered owners, as can many management companies (including ours). Check out property managers on the Department of Real Estate Website, or check local resources (citysearch.com, yelp.com, etc.).
We will never do away with all the scammers, but we can be better about identifying them. Good luck and safe web-browsing.
Has anyone else heard about this? The Franchise Tax Board has decided to revise a tax law effective 1/2009 making it a property manager's responsibility to collect and remit 7% of rents collected out-of-state landlords.
While there is some ambiguity in the explanation of the law as it pertains to residential tenants vs. commercial tenants, we are faced with a serious problem in that the law has one obvious loophole: If a landlord fires their property manager and collects the rent directly from the tenant, no withholding is required.
Fortunately, we are a small company that would only feel these effects on about 1 dozen clients, but that is still a significant loss. In our state's misguided efforts to fill coffers, they are dealing a serious blow to small business owners like us that will not be the legislature's tax collecting puppet.
Currently we are researching this issue (gathering info from the CA Apt. Assoc., CPAs, etc.) and will report back on any findings. In the meantime, if anyone out there has useful info on this, please do share it.
 |
|
|
Property Management in Sacramento, Rosevillle, Folsom. ICPM is the company for investors that value the quality service and skill that comes from dealing directly with a Broker. -NO Repair Markups-
In over 16 years as a property manager in Sacramento, I have worked with small companies and large ones, and have learned to appreciate the qualities of both. Many clients take comfort in the size of a large company, often overlooking their shortcomings with the rationale that "they are big....they must be good". In some aspects, a big company can be a safe haven for investors that want to hand their rental property over and trust that all will be handled well, having little or no involvement in the process. For others that prefer a more "hands on" approach, a smaller management company may be a better fit, where there is more time and care given to each rental.
One area where a large company may indeed fall short of the mark is in customer service. Overburdened with 2 to 3 times the number of rentals that anyone could manage effectively, the big company property manager is a master of juggling, spending only enough time with each client to keep them from leaving the company, but never keeping their clients truly satisfied. As a former participant in this type of management, I know just how much thought goes into managing 250-300 properties by yourself, and the answer is "not much". When I left big management, I vowed never again to compromise my standards of service, sacrificing profitability in exchange for a more meaningful, dedicated approach to my clients, their properties, and their often-overlooked tenants. It was a life-altering decision, and one of the best I have made in my career to date.
At present, ICPM proudly manages 110 properties with the skill and care our clients have come to expect, in a manner that keeps our clients referring their friends, neighbors and family members.
Our business is over 95% referral-based and we can name every client, their property and their tenants by name.
When we say "Experience Property Management the Way it Should Be", what do we mean by this? There is no short answer to that question, but read on and, if you like what you read, consider visiting our website for more information.
ICPM specializes in the exceptional management of single-family homes, duplexes and condominiums throughout the greater Sacramento area, including Roseville, Rocklin, Lincoln, Folsom, Natomas and Elk Grove.
As a proud member of NARPM (National Association of Residential Property Managers), as well as an affiliate member of SAR (Sacramento Association of Realtors), we are dedicated to upholding the highest standards of excellence within our industry. We attend ongoing classes to keep at the top of the learning curve, as well as to set a good example for our peers within the industry. Whether it's Fair Housing, ADA Compliance, Security Deposit Accounting, our clients have the benefit of dealing directly with a Broker that stays up to date on Tenant/Landlord issues affecting the greater Sacramento region.
ICPM charges NO MARKUP on Repairs, and receives NO KICKBACKS from vendors. Any savings we are able to secure from our vendors are passed on directly to our clients. Many companies mark up the cost of maintenance. Some of these profits are openly disclosed, others are concealed through clever wording on the contract. At ICPM, we strongly believe that properly maintained units are essential, but the maintenance is expensive enough without your management company "padding the bill". We are already being paid a management fee to manage our properties, and that includes maintenance coordination.
At ICPM, all properties are personally managed by a Licensed Broker that stays involved with our clients home(s). If you or someone you know is ready to stop being lost in the shuffle and start being managed effectively, we'd love to have your business. Once you experience property management the way it should be, you won't settle for anything less.
AGENTS: Did you know ICPM does NO SALES and pays one of the HIGHEST REFERRAL FEES? Call us anytime to find out more.
ICPM proudly manages in the following areas:
Property Management in Sacramento, Property Management in Natomas, Property Management in Elk Grove, Property Management in Citrus Heights, Property Management in Fair Oaks, Property Management in Carmichael, Property Management in Folsom, Property Management in Lincoln, Property Management in Roseville, Property Management in Rocklin, Property Management in Loomis, Property Management in Auburn
Property Management 95621, Property Management 95628, Property Management 95817, Property Management 95818, Property Management 95610, Property Management 95661, Property Management 95678, Property Management 95630, Property Management 95662, Property Management 95624, Property Management 95758, Property Management 95747, Property Management 95678, Property Management 95757, Property Management 95677, Property Management 95825, Property Management 95831, Property Management 95822, Property Management 95843, Property Management 95765, Property Management 95650, Property Management 95835, Property Management 95833, Property Management 95834, Property Management 95841, Property Management 95842, Property Management 95864, Property Management 95624, Property Management 95603, Property Management 95815, Property Management 95660, Property Management 95746, Property Management 95608, Property Management 95628, Property Management 95762, Property Management 95823, Property Management 95821, Property Management 95829, Property Management 95825, Property Management 95746
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
