Real estate investing Archives - Page 3 of 9

Landlord 101 class on Tuesday October 22 in Monroe

Our Landlord 101 class is coming to Monroe on Tuesday 10/22/2013. You can find more information here: https://tellusre.com/ai1ec_event/class-landlord-101/

If you want to see what the class is like you can even check out our videos here: https://tellusre.com/investment/landlord-101-class-video-first-steps/

Washington state has 15th highest foreclosure rate nationwide

We ended up cancelling our Buying Foreclosures and Shortsales class in Monroe because we didn’t have enough people signed up. But, I thought it would be good to share some of the information from the class. You can find the slides from a previous class here: Right way to buy foreclosures – Class Notes.

One of the things we cover in the class are foreclosure statistics. We use data from RealtyTrac.com, one of the places where you can register to get notified about upcoming foreclosures, in case you are interested in that kind of investment.

First thing we check for each class is where Washington State ranks for foreclosure rate, stated as foreclosures per number of homes. For the last few years, Washington has ranked just shy of top ten. In August 2013, the latest numbers available, Washington had the 15th highest foreclosure rate in the country. You can see the “top” ten here:

Now that we know where Washington ranks, it is important for our students and any clients considering investing in foreclosures to know which counties have the highest foreclosure rates. This tells them where the most opportunities for purchasing foreclosures are and it tells them how much flexibility lenders will likely show in negotiating prices (fewer foreclosures will usually mean less price flexibility). This heat map shows that King county has fewer foreclosures than Snohomish and Pierce counties, which have some of the highest rates in the state.

Its also useful to know where the trends are headed. If the trend is towards fewer foreclosures, then we can reasonably expect values to go up and we also know that as investors, we need to move a bit more quickly and not waste too much time hoping to find a ‘better’ deal. That doesn’t mean our investors shouldn’t shop carefully, but in a market that is improving, they may need to go with a deal that is ‘good enough’ instead of ‘perfect’. At the current time, in both King and Snohomish county, the foreclosure rates are falling with both the number of homes headed to auction and the number of homes already foreclosed falling:

If you would like more information about buying foreclosed properties, check the link to the class notes from our previous class, or give us a call or email, or ask us a question here.

NWMLS market report for May 2013

The Northwest MLS (NWMLS) released, last week, the sale and listing statistics for this past May. As most folks know, the news is no suprise .

Competition among home buyers “still fierce;” rising interest rates adding to fury
NWMLS, Kirkland, WA, June 5, 2013 – Well-priced homes continue to draw multiple offers and sell at a brisk pace around Western Washington as buyers react to increases in interest rates and asking prices.Northwest Multiple Listing Service reported double-digit gains in several key indicators it tracks for the 21 counties in its service area. Compared to a year ago, the number of new listings climbed 16 percent, pending sales increased about 10 percent, closed sales jumped nearly 22 percent, and prices rose more than 13 percent. Despite gains in listing activity, inventory remains tight.

Here is the full press release: http://www.nwmls.com/discover/index.cfm?SectionGroupsID=1&SectionListsID=1&PageID=6261

Dupre+Scott takes the mystery out of vacancy rates

The fine folks at Dupre+Scott are demystifying vacancy rates this past week. My takeaway from the info they’ve been sharing lately? Smaller units are a better investment than larger one (aka, for multifamily go 1-bedroom, not 3-bedroom). Of course, I’m sometimes accused of oversimplifying things. Check out the video (always entertaining):

Patagonia Vs. Apartments from Dupre + Scott Apartment Advisors on Vimeo.

Check out the article that goes with the video at the Dupre + Scott blog http://www.duprescott.com/productsservices/articleinfo.cfm?ArticleId=613

NWMLS market report for March 2013

The Northwest MLS (NWMLS) just released (late last week) sale and listing statistics for this past March. The news release definitely matches what is happening for my clients. Here is an excerpt from the news release…

Prices “spiking” as home buyers compete for scarce inventory
KIRKLAND, Wash. (April 4, 2013)… Northwest MLS figures show year-over-year prices jumped 14.9 percent for the 21 counties in its service area. The median price for last month’s closed sales of single family homes and condominiums (combined) was $258,500, rising from $225,000 for the same month a year ago. Twelve counties reported double-digit gains, led by Ferry (up 70.9 percent), San Juan (up 47.3 percent), and Island (up 36.1 percent).
Prices for single family homes increased 14.3 percent, while the median sales price for condos, which accounted for about 12 percent of sales, surged 19.6 percent. Two-thirds of last month’s condo sales were in King County; prices there leaped 28.6 percent, increasing from $175,000 to $225,000. The price of a single family home that sold in King County jumped from $330,000 to $392,000 (up 18.8 percent).
Brokers reported 5,745 closed sales last month for a 13.9 percent increase from the previous year when they tallied 5,044 completed transactions.

Here is the full press release: http://www.nwmls.com/discover/nwreporter.cfm?SectionListsID=25

Multifamily update from Dupre+Scott at RHA’s Spring Workshop

On Wednesday before last we helped sponsor RHA’s (http://www.rha-ps.com) Spring Workshop. One of the featured speakers was Mike Scott of Dupre + Scott (www.duprescott.com). This weeks’ update is a summary of his presentation.

Check out the article that goes with the video at the Dupre + Scott blog http://www.duprescott.com/productsservices/articleinfo.cfm?ArticleId=606

RHA Call to Action – Oppose B & O Tax on rental income

I thought I’d share this call to action from the Rental Housing Association. If you, like I, own rental properties in Washington State. It is important to fight this tax increase. If you are a renter, I think you should fight it also. In the end, these costs will get passed to you. Effectively, as a renter, you will be paying a property tax that homeowners don’t pay.

AT A GLANCE

Governor
Jay Inslee seeks to assess a new B&O tax against rental income

Contact Your State Legislators

Members can
find their legislative district and legislators’ contact information HERE.

Sample
Letter for submission to State Legislators.

Governor Inslee Contact Information:

Ph: 360-902-4111

Email Governor Inslee OPPOSING his B&O tax increase
proposal

***click here for online email submission form

Sample Letter
for submission to Governor Inslee

Mail:

Governor
Jay Inslee

Office of the
Governor

PO Box 40002

Olympia, WA
98504-0002

Rental Housing Association

2414 SW
Andover St, D207

Seattle, WA
98106

PLEASE CONTACT
YOUR STATE LEGISLATORS & GOVERNOR INSLEE IMMEDIATELY OPPOSING A
PROPOSAL TO ASSESS A NEW B&O TAX ON RENTAL INCOME

Governor Jay
Inslee’s newly released budget proposal includes a repeal of B&O
tax exemption for long-term rental of commercial real estate. Repeal of the
exemption would enact a new B&O tax at the service and other
activities rate on income derived from all long-term (30 days or more)
rentals of commercial real estate, including:

Rental of Apartments,
commercial buildings, mini-storage facilities, and leased
departments.

It is vital
that all RHA members contact their State Legislators and
Governor Inslee
and voice their opposition to enacting a new tax on rental housing. RHA
asks that you send in emails, and make phone calls to your legislators and
the Governor’s office, and encourage anyone else you know to do the
same in opposing the creation of a B&O tax on rental income.

Why does RHA oppose this proposal?

Rental Housing
Owners provide a precious asset to all communities; safe and affordable
housing. Increasing taxes on the rental housing industry would only
serve to increase costs and reduce affordability to tenants. Tax
increases in lieu of greater government efficiencies and effective
spending of current resources is ineffective and the wrong way to fund
our State’s budget. RHA opposes this proposal for the following
reasons:

Uniformity of taxation

RHA opposes taxes that
discriminate against rental housing, such as business taxes and
regulatory fees that are imposed on rental housing to raise
revenue. The State Constitution includes a uniformity clause,
which provides that “taxes shall be uniform upon the same class of
property within the territorial limits of the authority levying
the tax…All real estate shall constitute one class.” This means
that taxes must be the same on real property of the same market
value. Uniformity requires both an equal rate of tax and equality
in valuing the property taxed.
While other states have
differential tax rates or different value standards that depend
upon the separate classifications of property, such a system would
not be constitutional in Washington. A 1960 Washington State
Supreme Court ruling found the State Legislature’s 1959 extension
of the B&O tax to the rental of real estate was an
unconstitutional, non-uniform property tax.
Imposing a B&O tax
against properties already subject to local and state property
taxes amounts to double-taxation for the same services received by
other types of real property. This is discriminatory against
rental housing.

Increases the costs of housing

The practical impact of
increasing taxes on rental housing is that rents will increase to
cover the new costs imposed under Gov. Inslee’s proposal. Such a
tax increase would negatively impact those who can
least afford increased housing costs.

Sample letter to Legislature & Governor Inslee***PLEASE NOTE – personalized letters are strongly
recommended in lieu of using the sample provided below.

Honorable <insert name of legislator>,

I am writing
you to voice my strong opposition to the proposal within your budget
which would enact a new B&O tax against income generated by rental
housing.

In 1960 our
State Supreme Court ruled that an extension of the B&O tax to the
rental of real estate is an unconstitutional, non-uniform property tax.
I oppose taxation which discriminates against rental housing, and which
amounts to double-taxation of a property which receives no additional
benefits not received by other types of real property.

Additionally,
any tax increase upon rental housing will hit tenants in the form of
increased rents and other charges to cover the costs of operating
rental housing. Tenants represent a large population which can least afford
increased housing and living costs.

I respectively
ask that you withdraw your proposal to increase taxes upon rental
housing through the creation of a B&O tax on rental income.

Thank you for
your consideration.

Sincerely,

Tips for screening residential tenants in Washington State

In our Landlord 101 class we go over quite a few issues for new landlords. One of the most important is tenant screening. And, when doing your tenant screening it is really important to make sure you are screening the right person and not an identity thief.

Here are some tips to help with the screening process:

Make sure the application is filled out completely – This is my first screening criteria. I reject applicants who do not provide a complete application.
Check birthday, signature, and FULL name against photo ID — of course, this means you are requiring a photo ID.
Check SSN number on application and proof of SSN – typically social security card
Make sure paperwork like paystubs are originals or at least don’t look altered.

When checking their Washington Driver’s license you can also take some steps to make sure its a real/valid license. That is because there is a pattern to Washington Drivers’ license numbers. The WA driver’s license ID pattern is:

First five letters of person’s last name. If less than 5 letters, there areasterisks (*) in the remaining spaces.
First letter of first name
Middle initial
Subtract birth year from 100
State filing number (could be any digit)
Month of birth code (see below)
Date of birth code (see below)

Birth Month Code

B – January
C – February
D – March
J – April
K – May
L – June
M – July
N – August
O – September
P – October
Q – November
R – December

Birth date code

A – 1
B – 2
C – 3
D – 4
E – 5
F – 6
G – 7
H – 8
Z – 9
S – 10
J – 11
K – 12
L – 13
M – 14
N – 15
W – 16
P – 17
Q – 18
R – 19
O – 20
1 – 21
2 – 22
3 -23
4 – 24
5 – 25
6 – 26
7 – 27
8 – 28
9 – 29
T – 30
U – 31

Free expense tracking spreadsheet for your rentals – we’ve updated it

Spreadsheet is updated as of 12/18/2016!
Are you done putting together your tax paperwork? I just finished mine and my accountant liked the spreadsheet. In the process of using it I found, and fixed a few bugs, so if you tried it before… try it again. And, if you haven’t started your taxes yet, its a great time to do so.

Here is the original post with some information about the spreadsheet, and links to full instructions.

We’ve created this simple spreadsheet, that we use ourselves, to track our rental income and expenses, and to report information to our accountant. With it, you can create reports, including a Profit and Loss Statement (P&L) for each property or unit. You can also see how much you are spending by category. The spreadsheet is designed to do a lot of the basic work for you, while being customizable. You can add your own properties, expense categories, and income categories for use in tracking and reporting.

Download the spreadsheet here

You can find a full description, and simple instructions here….

License and instructions for Rental property P&L spreadsheet — License and Instructions

Property and unit list for Rental property P&L spreadsheet — Property and Unit List

Expense Categories list for Rental property P&L spreadsheet — Expense Categories

Income Categories list for Rental property P&L spreadsheet — Income Categories

Expense Entry tab for Rental property P&L spreadsheet — Expense Entry

Income entry tab for Rental property P&L spreadsheet — Income entry

Details section of property report for Rental property P&L spreadsheet — Property report – Details

Property report - Income and Expense by Category report for Rental property P&L spreadsheet — Property report – Income and Expense by Category

Property report - summary for P&L spreadsheet — Property report – summary

Portfolio Summary tab of P&L spreadsheet — Portfolio Summary

Category summary tab of P&L spreadsheet — Category summary

Multifamily update from Dupre+Scott (Feb 8, 2013)

Dupre + Scott (www.duprescott.com) has released their latest apartment update for the Puget Sound market. Check it out and let us know what you think. This week’s article is on expenses

Check out the article that goes with the video at the Dupre + Scott blog http://www.duprescott.com/productsservices/articleinfo.cfm?ArticleId=602