Category Archive : Property Management

Most property management companies will offer a set maintenance limit upon initiating a new contract with a landlord. The majority of Las Vegas property management companies set this limit at $300 – 500. This means that at property manager can approve any repair to your home that is less than that amount without the landlord’s prior approval. For some landlords this is fine, but for the majority of landlords this amount is more than they are comfortable pre approving and this has been our experience here at Shelter Realty.  This has prompted some property management companies to find other solutions in order to make their clients confident in their ability to provide good property management services.

At Shelter Realty we feel a good property management company should be able to maintain a property with minimal repair limits, for instance limits of $250. They should have vendors who are willing to work with these lower limits and who are willing to make additional trips back to the property without charging additional fees (trip charges).

As most people have experienced, a lot of vendors these days upsell for commissions or heavily mark up the material’s. So a vendor with a high maintenance limit and pre-approvals might just take advantage of those situations and the landlord know none the better. Having lower maintenance limits helps to control these situations and discourages over charging . A good honest vendor will make the minor repair upon the initial visit and ensure it is under the approved limit. If a repair can truly not be completed for less, the vendor is happy to leave the property and provide the management company with an estimate. These vendors look forward to obtaining approval and visiting the property again to complete the repairs.

When your property management company can find vendors to accept this challenge and these types of terms, you have a property management company that has exhausted the search for honest vendors; a management company that goes the extra mile to ensure their landlords are happy and comfortable to have them oversee their investment property.

For more information about our Las Vegas property management services, give us a call at 702.376.7379, email us at info @ shelterrealty.com or complete the form to the right.

Living in Las Vegas and Henderson comes with many great things. Some may say one of those things includes Las Vegas Home Owners Associations or HOA’s.  They help to regulate the standards in our community’s which most home owners and landlords come to appreciate. They watch over the neighborhoods to ensure everyone is abiding by the rules and regulations that help to keep the communities safe and clean. After all, that’s what they were created for. The “Covenants, Conditions and Restrictions” or the “Rules and Regulations” aren’t too difficult to follow.  For example, we are not allowed to leave our trash cans out on the curb after a certain amount of time on trash days; we have to install our satellite dishes where they cannot be seen; our festive decorations and lights have to come down once the holidays have passed and so on and so forth.

One key factor for new home owners, families moving to Las Vegas from out of state and investors is to be very aware of HOA communities and their common laws.  Unfortunately, a vast majority is unaware of these rules, sign the closing documents and /or lease and then come to find out about some of the more unknown rules. Did you know that in some communities you are not allowed to have a company vehicle? Some don’t even allow you to park it in the driveway. Most company vehicles cannot fit into a garage. What service technician wants to park his or her work truck on a public street to have it burglarized of all their equipment?  Or, did you know that many communities do not allow any vehicles to park on the street.  Maybe you have a garage full of recreational items or equipment and cannot fit that third car into the drive way. Only until it’s too late and you have accrued a fine or had your vehicle towed does this come to light; contracts have been signed and now you are stuck.  This can be a very unfortunate situation as you can imagine

How do you as a new homeowner, landlord or tenant avoid these situations? Make sure you have a good Realtor and/or Las Vegas Property Management Company that have the knowledge and know how to research the association’s rules and regulations on your behalf in order to avoid the these types of situations before they happen. They are more common that you can imagine.

For more information about our Las Vegas property management services, give us a call at 702.376.7379, email us at info @ shelterrealty.com or complete the form to the right.

If You Can’t Sell Your Las Vegas Home, Rent it

Shelter Realty has been contacted over the last month by several Las Vegas homeowners about listing their property for rent. The message has been very similar, my home is not selling and now I just want to rent it.

The Las Vegas Real Estate Market is changing and homes are not selling as quickly as they were a year ago.  Las Vegas home prices are up over the same period from last year but homes sales are down.  With the increased real estate inventory, homes are not selling and subsequently are sitting on the market vacant for a longer period of time.  To make matters worse, we are entering the holiday season when homes sales traditionally slow down.

If you are a Las Vegas seller and your property has been on the market for sale for over 90 days, I would recommend looking into placing your home on the market for rent.  Shelter Realty manages over 600 residential properties and are vacancy rates are below 5%.  By placing a renter in your property, you can minimize out of pocket mortgage costs while you wait for the sales market to shift.

For more information about our Las Vegas property management services, give us a call at 702.376.7379 or complete the form to the right to see if renting your home makes financial sense.

Immediate opening for full time Las Vegas Residential Property Manager/Field Coordinator.

This is a field position consisting of move-ins, move-outs, make readies and inspections. You must have reliable transportation and drivers license.

You must possess a Real Estate License and Property Manager Permit.  If you do not possess a real estate license and permit, please do not submit your resume!

We are looking for a self-motivated team player with superior customer service skills, able to multi-task, well organized and does not require constant supervision.

Requirements:

• Minimum 4 years residential property management experience
• Ability to tactfully address, negotiate and resolve issues with owners, tenants, and vendors
• Good communication skills (verbal and written)
• Competent computer skills
• Attention to detail

Compensation:

• $16 – $18 an hour depending on experience
• Mileage

Benefits:

• Medical/Dental/Vision

If you are interested in this position, please email your resume to info(@)shelterrealty.com.

Shelter Realty, Inc. is an Equal Opportunity Employer.

I receive calls from Yelp at least once or twice a month to sign up for their ad program for Business Owners but I have yet to sign up and for very good reason. As many property managers know, managing rental properties is a thankless job. It’s very rare you receive phone calls from landlords or tenants stating how happy they are with your services. It’s usually a tenant calling to notify you of some type of repair that is necessary or a repair that wasn’t completed to their satisfaction.  Many tenants believe property managers are at their beck and call and if a repair isn’t handled quickly enough or to their satisfaction, they won’t hesitate to place a negative review of your company on Yelp or threaten to place a negative review.

Am I worried about the negative reviews we have received? Not at all, as I know almost all the negative reviews are inaccurate.

Shelter Realty currently manages over 600 rental properties and have rented to thousands of tenants over the years and only have a few negative comments. There are just some tenants that no matter what you do, you will never make them happy.

The problem I have with Yelp reviews is that almost all our positive reviews aren’t displayed. You have to click on the link that states “other reviews that are not currently recommended” to view all our positive reviews from landlords who have shared their experience with Shelter Realty as their property manager. I asked the representative from Yelp why these positive reviews don’t display and the only answer I received is that it has to do with the algorithm. So my response to Yelp is:

Why would I pay to use your ad program and have my target clients (landlords) only see negative comments from tenants but none of  the positive reviews from my landlords?

I will continue to ask my clients who have advised us of their happiness with our services to take the time and share on Yelp but I would not recommend to any colleagues to pay for Yelp’s ad program until they fix their algorithm issues.

I spoke with one of our property management clients today and he inquired about selling his Las Vegas home but he wanted to know if he had to wait till the tenant vacated the property before he could sell.  This was the second time I was asked this question in the last two weeks.  Any Nevada landlord has the right to sell their investment property whether the property is occupied by a tenant or not and the tenant is required to give the landlord reasonable access to show the property.

Usually, our tenants agree to cooperate with showings when they are notified the landlord has decided to sell the property but they do have numerous questions such as:

1. Do I have to move? No, you have a valid lease and the lease will transfer with the sale of the property.
2. Do I have to let people in to see the home?  Yes, our lease requires you to allow reasonable access to the property for showings to prospective buyers.
3. Am I required to have a lock box on the property? No, we understand that you don’t want strangers walking through your home when you aren’t present so all showings will be scheduled with you.
4. Can I buy the home?  Yes, as long as the owner accepts your purchase offer.

Occasionally we will get that tenant that states they don’t care if the owner wants to sell and they have the right to quiet enjoyment so they will not allow anyone access to the property.  At that point we will explain that their lease explicitly states they have to give the landlord reasonable access to show the property to prospective buyers.  Lastly, we will point out that NRS 118a.330 states the following:

A tenant shall not unreasonably withhold consent for the landlord peaceably to enter into the dwelling unit to exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workers, contractors or other persons with a bona fide interest in inspecting the premises.

If the tenant still refuses to give access to the property, we will post a 24 hour notice to enter the property during normal business hours.  Luckily, we have never had to post a 24 hour notice to show a property to a prospective buyer as most of our tenants understand the owner has the right to sell their property and cooperate.

If you have any questions about selling your Las Vegas investment property or are in need of a property manager, give me a call at 702.376.7379.

Many Nevada landlords are not aware they have a responsibility to provide the tenant with an itemized accounting of their deposit within 30 days of the termination of tenancy.  If the landlord fails to return the tenants entire deposit or an itemized accounting of the deposit within 30 days, the landlord could be held liable by the courts for up to the full amount of the security deposit.

NRS 118A.242 states the following:

Upon termination of the tenancy by either party for any reason, the landlord may claim of the security or surety bond, or a combination thereof, only such amounts as are reasonably necessary to remedy any default of the tenant in the payment of rent, to repair damages to the premises caused by the tenant other than normal wear and to pay the reasonable costs of cleaning the premises. The landlord shall provide the tenant with an itemized written accounting of the disposition of the security or surety bond, or a combination thereof, and return any remaining portion of the security to the tenant no later than 30 days after the termination of the tenancy by handing it to the tenant personally at the place where the rent is paid, or by mailing it to the tenant at the tenant’s present address or, if that address is unknown, at the tenant’s last known address.

If the tenant disputes the itemized accounting statement in writing within 30 days of receiving the statement, a landlord cannot send the outstanding balance owed to a collection agency unless you obtain a judgement against the tenant.  This is why it’s very important to have a move-in condition report completed at the time of tenancy along with pictures to compare with the move-out report and pictures.  Keep in mind, a landlord can only hold the tenant responsible for damages to the premises, cleaning and any unpaid expenses during tenancy such as rent.

Whether you are accidental landlord or an investor, not knowing Nevada law can get you in big trouble.  If you decide not to hire a knowledgeable property manager, it’s imperative you take the time to familiarize yourself with NRS 118A to minimize future legal issues.

Not knowing or understanding Nevada landlord/tenant law is another reason why hiring a property management company to handle the management of your investment property makes sense.  To discuss the management of your investment property, give Shelter Realty a call at 702.376.7379 or email us at info @ shelterrealty.com.

What’s The Difference Between IRS Forms 1099 and 1042-S?

DO YOU HAVE FOREIGN OWNERS/INVESTORS?

As a property manager, you are very much aware that by law, you must issue a 1099 form reporting gross rents to your property owners by 1/31 of every year.

However, there seems to be a great deal of confusion out there when it comes to property managers with owners that are citizens of foreign countries.  You see, foreign investors do not get issued a 1099.  What do they receive?  They get issued a 1042-S.

WHAT IS THE DIFFERENCE BETWEEN FORMS 1099 AND 1042-S?

A 1099 form is used to report miscellaneous income, such as gross rent, for US residents and businesses only, whereas a 1042-S (Foreign Person’s U.S. Source Income Subject to withholding) is used to report income paid to a non-resident regardless of whether the payment is taxable.  Unlike form 1099, form 1042-S is not due to be issued until March15th of every year.

I see way too many property managers issuing a 1099 form to a foreign citizen.  This will lead to serious audit problems in the future as the IRS is cracking down on property managers filing the incorrect form.

The function of form 1042-S is to let the IRS know that a foreign person has earned income in the USA.   For the purposes of the IRS, a foreign person includes a non-resident alien individual, a foreign corporation, a foreign partnership, a foreign trust, a foreign estate and any other person that is not a US person.  When a foreign person or entity has earned income in the USA they must file an annual non- resident tax return. The IRS uses the     1042-S as a means to monitor tax filing compliance on the part of a foreign person or entity.

MAKE SURE YOU ALSO HAVE FORM W-8ECI ON FILE FOR EVERY FOREIGN CLIENT

As a property manager, you would report the annual gross rents on the form and also report any federal taxes withheld.  This is an important note: If you do not have a form W-8ECI (Certificate of Foreign Person’s Claim that income is Effectively Connected With the Conduct of a Trade or Business in the United States) on file for your foreign client, you should have withheld and submitted to the IRS 30% of the gross rents of your client.  The IRS also uses form 1042-S to monitor your compliance with this.  Failure to be compliant with this law may result in the IRS going after your company for the taxes owed by your client.  Therefore the message is clear: Make sure that you have this form on file for every foreign client you have!  You also want to obtain an updated W-8ECI every 3 years but I would suggest making it part of your annual checklist when renewing the management contract.

FORM 1042-T

After you file your 1042-S with the IRS, you will also have to file an annual form 1042T (Annual Summary and Transmittal of Forms 1042-S)  which is a tax reporting form that reconciles all of the 1042-S forms and tax withholding deposits to all of your form 1042-S paperwork.  This form is also due to be issued by March 15th of every year.

GROSS RENTS BOX ON FORMS 1099 AND 1042-S

I have noticed that there seems to be some confusion as to what constitutes reportable annual rental income that should be listed under the Gross Rents boxes on forms1099 and 1042-S.

The second part of this article will help all property managers have a clear understanding of the tax rules that apply to this box.

The following are common types of income:

ADVANCE RENT

Advance rent is any amount you receive before the period that it covers.  Include advance rent in rental income in the year received regardless of the period covered or the method of accounting you use.

Example

• On May 15^th, 2011 you signed a 2 year lease to rent property.
• The tenant decides to prepay the entire lease.
• You receive $10,000 for the first year’s rent and $10,000 for the rent on the second year.
• The whole $20,000 must be reported on form 1099 in 2011.

CANCELING A LEASE

If tenant pays to cancel a lease, this payment is reported as rental income.  Include the amount on form 1099 in the year that it is received.

EXPENSES PAID BY THE TENANT

If tenant pays any of your rental expenses, the amount paid should be included in rental income and you would also deduct the expense.

Example

• If the furnace in the rental property stops working and the tenant pays for the necessary repairs and deducts the amount from the rent payment.  The amount paid by the tenant would be included in rental income and the repair would be deducted as an expense.

PROPERTY OR SERVICES

If you receive property or services as rent instead of money, include the fair market value of the property or services as rental income in the year received.

Example

• Your tenant is a house painter.  He offers to paint your rental property instead of paying two months rent.  You include in rental income the amount he would have paid for rent and deduct the same amount as an expense.

SECURITY DEPOSITS

This is the area where I see the most confusion.  Do not include a security deposit in rental income when you receive it if you plan to return the deposit to the tenant at the end of the lease.  If you keep part or all of a security deposit during the year because your tenant does not live up to the terms of the lease, include the amount you keep in rental income for the year.

If an amount called a security deposit is to be used as final payment of rent, it is advance rent and should be included in rental income in the year received.

I hope that this article gives clear direction on the IRS tax guidelines for what is reportable rental income, as well as helping all of you with foreign clients to establish a system within your office to remain compliant with the IRS and protect yourselves from costly audits!

__________________________

Guest article written by Richard Hart with Hart & Associates:

Richard Hart EA, CAA
President
Hart & Associates
Tax Consulting and Preparation Services
702-985-7148
www.hartassociate.com

Evicting a tenant is never pleasant (or easy), but for most landlords, it is unfortunately an unavoidable part of the job. Yet it’s one that the landlord must approach with caution, and a full awareness of all of the relevant state laws.

Tenancy termination laws vary from state to state, so before you proceed, know your state’s law. In most cases, before you can evict your tenant you must first legally terminate the tenancy with a written notice (often called a Notice for Termination with Cause) according to your state’s termination statute. If your tenant doesn’t “perform” (pay back rent or stop breaking the rules) or move, then you can file a lawsuit to evict.

Here I’m going to focus on how to write and deliver a Notice for Termination with Cause.  While the specific legal terminology varies from state to state, there are basically three types of these notices:

1. Pay Rent or Quit Notices. These notices are typically used when the tenant has not paid the rent. They give the tenant a few days (three to five in most states) to pay the rent or move out (“quit”). In Nevada, where I run a property management company, a landlord can choose to accept partial rent payment and then rewrite a new notice of rent owed.

2. Cure or Quit Notices. These are typically given after a tenant violates a term or condition of the lease or rental agreement, such as a no-pets or excessive noise clause. Usually, the tenant has a specific amount of time to “fix” the issue or violation. A tenant who fails to do so must move or face the possibility of eviction.

3. Unconditional Quit Notices. These are the hardest to issue because they order the tenant to vacate the premises with no chance to pay the rent or correct a lease or rental agreement violation. In most states, unconditional quit notices are allowed only when the tenant has:
• Repeatedly violated a significant lease or rental agreement clause
• Been late with the rent on more than one occasion
• Seriously damaged the premises
• Engaged in serious illegal activity, such as drug dealing on the premises

Unfortunately, some tenants won’t pay the back rent, fix the issue, or leave even after receiving a Pay Rent or Quit or Cure or Quit notice.  If they don’t, your next step is to begin an unlawful detainer lawsuit by properly serving the tenant with a summons and complaint for eviction.

As they should be, state laws are set up to protect tenants’ rights.  But oftentimes they make even lawful evictions complicated.  Yet staying on the right side of state lease laws is critical.  It’s another reason why hiring a property management company to handle the management of your investment property can make great sense.

I am thrilled to announce that Las Vegas real estate agent and property manager Atsuko Winston has joined the Shelter Realty team.

We are really excited to welcome Atsuko to the Shelter Realty family.  Fluent in Japanese and English, she brings invaluable expertise to our clients.  For eight years she has specialized in working with Japanese real estate investors (and others) looking to buy Las Vegas real estate.

Atsuko will also provide Shelter Realty’s professional property management services to our Japanese clients looking to invest in Las Vegas real estate.  Atsuko offers a truly complete real estate investment package for Japanese real estate investors.

To set up an appointment with Atsuko please call (702) 376-7379.

A tenant application is like applying for a job. Here, an applicant has to prove that they will be a good renter (pay on time, take care of the property, be considerate of neighbors). So how does a landlord (or the landlord’s property management company) know if they’ll be a good renter?  Same way a prospective employer would – by checking up on (and interviewing) the applicant.

At Shelter Realty, we have a 6-step Las Vegas tenant screening process that determines an applicants overall score.  Prospective renters must be cleared on all 6 steps and obtain a certain score before they can sign any lease.  Here’s what an applicant can expect during our tenant screening process:

Step 1: Credit check. Credit checks reveal the applicant’s financial history. We check to see if they have defaulted (failed to pay) on any loans (mortgage, car, school, etc…) or credit cards. If they have recent collections for utilities as this is an indicator that the applicant most likely won’t pay their rent on time.  If an eviction in the last 5 years is listed on their credit report, it’s an automatic denial.

Step 2: Criminal background check. We check to see if they have ever been arrested (any kind of criminal history may be a warning sign, especially felony arrests).  We want to protect our client’s property and the neighborhood.

Step 3: Employment verification. We check to make sure that the applicant is honest about their employment (and that they are in good standing at work). After all, a good employee usually makes a good tenant.

Step 4: Income verification. While a steady stream of income (employment) is critical, we also need to know how much an applicant makes – that they have enough income to cover the rent and their other expenses. We look at their current pay stubs and/or bank statements (factoring in additional obligations that take away from their income).

Step 5: Rental history verification. Does the applicant have a good history of paying on time or multiple late payments?  Did the applicant leave their last residence in good condition or was the landlord left with a large repair bill?

Step 6: One-on-one interview. We want to meet the applicant (usually in person, but on rare occurrences, over the phone) and get to know the applicant better than we could just based on the tenant application alone.  By meeting and discussing the results of the screening process, it allows us to verify the information obtained and sometimes discover discrepancies.

Of course, throughout the process we honor the fair housing laws and consider all of the information that we’ve been given.

At Shelter Realty, we have a full staff of property management professionals who can make the rental application process as smooth as possible. Call us today at (702) 376-7379 get started on the tenant application process or visit our website to see our huge selection of Las Vegas rental properties.

Las Vegas is the #1 market for rental property investors.  If you decide to take advantage of the rental property investment opportunity here, or if you already own a Las Vegas rental, how do you manage that property?  One option, of course, is to do it yourself.

DIY property management might save you the money you’d pay to a professional manager.  But property management can be a full-time sort of gig – and can present a host of legal complications and other headaches.  So is the hassle worth the potential savings?  Some points to consider as you think about whether to manage your Las Vegas rental property yourself or hire someone else to do it:

How much do you charge in rent? The amount you charge for rent should depend on comparable rents in the neighborhood your property is located in, the size of the home you’re renting, its condition, amenities, the other rental properties available – and any number of other factors.

How do you find quality renters? How will you connect with renters looking for Las Vegas homes to rent?  You can certainly put your own rental listing online, but does that give you access to the widest possible pool of the best quality renters?

You’ll maximize the income-generating potential of your rental property if you have great renters – ones who pay their rent on time, who stay in the property for the long term, and who don’t destroy the place.  But how can you tell, from the pool of potential renters, who are the great ones and who are the ones who will have wild and crazy parties then skip out on rent?

Do you know the ins and outs of Nevada lease laws? DIY property management is trickiest, in my opinion, because of the legal obligations you have as a landlord.  (There are over 50 provisions of Nevada state law addressing landlord and tenant rights.)  From the rental application (what can you ask?) to the lease agreement (what do you have to say?) to the eviction process (what are the tenant’s rights?) there is a host of laws you’ll have to walk within – all while protecting yourself legally and finically.

Are you going to do maintenance and repairs yourself or hire someone else to do it for you? Will you be the “handyman” for the rental property, or will you contract that job out?  If you contract it out, do you already know who you’ll hire?  (You want someone who will do the best job at the least cost.)  Even if you contract out the actual job of fixing the toilet, are you prepared for the 1 a.m. “the toilet’s plugged up again!” phone call?

Another alternative is to hire a professional property management company to take care of these issues for you. At Shelter Realty, we manage over 225 Las Vegas residential rental properties – so we know Las Vegas property management.  The associated fees might not be as high as you think (well worth it when you consider the difficulty associated with managing the property yourself).  It’s worth a phone call to explore the option, isn’t it?  Call (702) 376-7379 or contact us here.