Property Management
When you buy a rental property with a self-directed IRA (individual retirement account), it’s not just easier to rely on a Denver property management company.
It’s also the legal approach. According to an article by Forbes, the IRS expects a third-party property management company to oversee property owned as part of a self-directed IRA arrangement. Some investors have misconceptions because the term “self-directed,” conjures up a DIY approach. While you do decide which property to buy and who to hire as contractors and property managers, you can’t perform work yourself or live in the rental. In other words, you don’t put “sweat equity” into a rental you purchased through a retirement account.
- Understanding the advantages
Some of the advantages of buying an investment property in Denver with a self-directed IRA include having your asset grow tax-free and relying on others to do the manual labor and management. Another major advantage is the fact that using a self-directed IRA means you can make an all-cash purchase on an investment property. In many cases, a seller will offer a better price or terms for all-cash buyers. You can also tap the self-directed IRA to pay contractors and your property management company, which means no money out-of-pocket for you.
- Remembering the restrictions
The IRS is strict about rental properties purchased through an IRA. You can’t use the property as your vacation home or personal residence. You can’t allow your children, grandchildren or parents live in the home. According to a piece by Wealth Counsel, it’s important to talk to a tax attorney before forming a self-directed IRA. Since the housing decline, a lot of investors have misused the accounts by failing to comply with IRS rules.
Having a property manager for your rental property in Denver can provide peace of mind for most pre-retirees who want a good return on their investment. With the volatile stock market and financial uncertainty in the global financial markets, it makes sense to buy real estate in a booming market such as Denver. Using a self-directed IRA helps investors who have retirement savings but don’t want to dig into their emergency fund or paychecks.
At Legacy Properties-PM, we provide excellent property management services for investors in the Denver area. We belong to the NARPM, the National Association of Residential Property Managers. For more information of self-directed IRAs, please call 720.989.1996 or contact us.
Property Management
There are ups and downs with any real estate investment experience, but the eviction process is probably the hardest thing to deal with.
Landlords who have gone through this know that having a property management company on board from the beginning makes the eviction process much easier.
The biggest reason for evictions is a tenant who is late paying the rent. A property owner has to know the terms of the lease, which states exactly when rent is due, and if there is any grace period.
There are specific guidelines for the eviction process including:
Serving the tenant with a 3-day notice to “Pay or Quit”
How to serve the notice (whether it requires hand-delivery or via certified mail)
How to count the three days (the delivery day does not count, nor do weekends or holidays).
The eviction process requirements vary by state.
If the tenant will not leave, then you must go to your local court to start legal proceedings. You will be given a court date and will need to have the tenant summoned. When going to court bring any and all documentation to support your claim, including communication between you and the tenants, receipts, bounced checks, a copy of the lease, and proof of the 3-day notice. It may seem like an easy case, but this is where it gets complicated.
In Colorado, courts will decide in favor of the tenant
Since many tenants can’t deny they failed to pay the rent, they try to get out on a technicality. If you failed to complete any part of the eviction process or forgot to “dot an I or cross a T,” the court will decide in favor of the tenant. Then you have to start the process over.
The eviction process is complicated, time-consuming, and extremely stressful. The best thing you can do is partner with a property management company from the start, so there’s no need to panic when it gets to this point. They take care of all the legalities, including signing the lease and collecting the rent. If there is a problem, they know the eviction process and have the proof to go to court and win the eviction.
If you own investment property in the Denver area, contact us or call 720.989.1996 to take advantage of property management services. Legacy Properties-PM has the experience to find quality tenants so you probably won’t have to deal with an eviction in the first place, but if it comes to that, we know exactly how to handle it.
Property Management
Retirement looms before us all, and some of us have longer to wait than others. We all know we are supposed to be saving for retirement, but sometimes that seems difficult amidst current bills. If you think what you have saved for retirement is insufficient, property management in Denver or Aurora can help.
Saving for retirement is difficult no matter your age. If you’re in your 20’s you may find putting money aside for a house more pressing. Often in your 30’s or 40’s you have to deal with the expense of growing children, and eventually college expenses. Or, perhaps you are nearing retirement age, had worked very hard to put some money aside, and watched it disappear in the recession. No matter what stage of life you’re in, it’s hard to know exactly how much money you will need to live the way you would like in your golden years, so it’s always a good idea to save more if possible.
The best way to increase your retirement savings is to increase income, and set that money aside. We’ve found that one of the most effective ways to do that is investing in residential real estate. Making a wise purchase and renting it out will generate monthly income that can grow when placed in a retirement savings account. It will also give you the opportunity to gain equity in a property that can be put to use later on in life.
Legacy Properties-PM in the Denver, Aurora, Highlands Ranch, Littleton, Parker & more, specialize in helping people build their own legacies through real estate investment. We can help you find a property that is ideal for purchasing, and do just about all the work for you, from taking care of finding quality tenants, to collecting rent and handling maintenance issues. Because we can handle just about all the details, you don’t even have to live locally to invest in our very profitable rental market.
If you’re concerned about retirement savings, or the financial legacy you will eventually leave your children someday, investing in real estate can take your situation from concerning to confident. To find out more information on how we can help please call 720.989.1996, or contact us.
Property Management
Those who own investment properties know things come in waves. Sometimes all is quiet and you think this is the easiest gig ever, and other times you just want to throw your phone off the nearest bridge because it won’t stop ringing. Unfortunately it comes with the territory, and landlords may relate to a day like this:
The property owner woke up on a cold winter morning to a text message informing him that the heat wasn’t working in the downstairs unit. This 2-unit apartment has a double boiler system, and unfortunately, that one was at the end of its life. Knowing the time was approaching, the landlord had already purchased a boiler and had it in the basement and it was just a matter of installing it. So, after a call to a plumber, the landlord went off to his regular job, satisfied that the problem would be taken care of, even if the tenant still calls every hour to complain.
Mid-morning he gets a call from the upstairs tenant complaining about the downstairs tenant. It’s not about something important, such as an aggressive dog, or suspicion of drug activity. He’s complaining that she talks too loud when she’s on the phone and it’s interrupting his sleep. At 10AM. And this guy doesn’t work the night shift. After telling the guy to work it out himself, and a reminder that he will be stopping by at 5:00 for the rent that is past due, the landlord gets back to work.
5:00 arrives and the property owner leaves his regular job to stop at the apartment. The first task is to collect the late rent from the upstairs tenant who assured him he would have it ready. But despite a lot of knocking and phone calls, Mr. Upstairs is conveniently not home. Then, he heads to the basement to see the progress on the boiler job. He’s thankful to find out the plumber is just finishing up, but has a hefty bill for him due to the pricey materials needed to hook up the new system. As he shows him the work he has done they hear the shower turn on in the downstairs apartment and water starts to drain through the pipes. The landlord starts to write the plumber a check and as he’s signing it they hear an odd noise, turn to investigate and at that moment, the valve from the shower drain gives way, covering them both with dirty, soapy water.
If there was anything good from the situation, the plumber was already there and willing to fix it immediately. At that time, the landlord got a text message from the upstairs tenant saying his car broke down, and that is, of course, the reason he wasn’t there to pay the rent. The landlord heads home without the rent, another plumbing bill to pay, and the saga continues the next day.
This is a true story, of a landlord with just one 2-unit property. If this landlord had taken advantage of property management services, he wouldn’t have had to deal with any of this. Maintenance calls, rent collection, and finding better tenants to begin with are just a few of the perks that a property management company provides. If you own investment property in Denver, Aurora, Centennial, Parker, Littleton or Highlands Ranch area, don’t be like this landlord. To avoid hassles like this, please call Legacy Properties-PM @ 720.989.1996 or contact us.
Property Management
Investing in real estate in the Denver or Aurora area can surpass other financial strategies for supplementing your income whether you are starting out or retired. With tax time just around the corner, it’s time to consider the tax advantages of using reputable property management in Denver. Not only are the real estate services provided by a property manager tax-deductible, but your property manager can keep your records better organized. According to an article by the Houston Chronicle, people who own rental properties can’t usually take time away from their occupations to manage and maintain their properties. In addition to allowing you to continue working in a full-time career or enjoying retirement, hiring a property management company in gives you tax advantages.
According to the Houston Chronicle, you can deduct professional services such as property management. Typically, you can deduct the expenses of hiring a tax preparer as well. Using a property manager should lower your tax bill or increase your refund. Keep your invoices and statements for your tax preparer.
Some people have a shoe-box organization system, which means they bring a shoebox full of receipts to their tax preparer. By using a good property manager, you will likely have a well-organized record of the income you made from tenants as well as the expenses that went out to pay for maintenance and repairs. You won’t miss any tax deductions if bookkeeping is not your strong suit. Most property managers keep an electronic copy of records.
- Qualifying for depreciation
Owning a rental property also qualifies you for rental property depreciation. A publication by the IRS points out you can recover the cost of your rental property that generates you income by “depreciating the property.” To depreciate your property you have to own the property, use it as a rental property and expect the property to last for more than one year and have a useful life. When you make major improvements to your rental property, it often counts under depreciation whereas maintenance is a deduction. Your tax adviser can help you with any complicated figures to determine the correct amount.
At Legacy Properties-PM, we are members of the NARPM, the National Association of Residential Property Managers. For more information on the tax advantages of using property management in Denver, please call 720.989.1996 or contact us.
Free Property Assessment
[gravityform id="1" title="true" description="true" title="false"]
