Property
Management for the
Investor (new or seasoned)
Information
& Tips for
Current Owners
Information
for
Visiting Landlords
|
"Property
Management is all we
do... Nothing else!... Well,
almost..."
Q&A!
» ARROGATE:
What did the President, the NC Governor & CDC do to
Landlords. What effect did this having on Landlords? What could a
Landlord have done to mitigate the damage? Can this happen again?
THIS
IS A HOT
TOPIC!
Answer»
Considering using
Professional Management?
Answer
»
Have a manager, but not
happy?
Answer
»
What is a Real
Estate IRA? Is it right for me?
Answer
»
How do I add
Rental Property to my portfolio? Just consider this... VFMR has been responsible for over
$3,000,000 in real property transfers. Just over 87% of these values
represent Rental Investors. The other 23% represents conversions from
Rental use to Owner-Occupant use. VFMR
is exactly where you need to be to grow/expand your rent portfolio or,
if contemplating adding rentals to your investment portfolio. We're IT!
Link below will give you some additional info...
Answer
»
I have a rental portfolio, but am looking
for more Property. Can VFMR
help me?
The answer is a no-brainer, but what are the facts backing up such a claim? VFMR has been responsible for over
$3,000,000 in real property transfers. Just over 87% of these values
represent Rental Investors. The other 23% represents conversions from
Rental use to Owner-Occupant use. VFMR
is exactly where you need to be to grow/expand your rent portfolio or,
if contemplating adding rentals to your investment portfolio. We're IT!
Link below will give you some additional info...
Answer
»
I can't sell my home for a reasonable
price. I am relocating. Can I rent to cover my
mortgage?
Answer
»
How can I cut
my
operating expenses to increase my rental property return?
Answer
»
Can I pass Schedule
C
losses against my 1040 Gross income?
Answer
» What I notice you have a Custom Search (for a rental/Lease) for site visitors? Do you have similiar for Landlords/Investors?
Answer
» I
am an Absentee Owner. What should I expect from my Property Manager
during and after a natural
disaster?
Answer
»
My Tenant has caused an unneeded/negligent
expense. When or
will I be reimbursed? [Info for VFMR
OWNERs]
Answer
»
I did
not get paid my rent with my last Monthly Statement.
What's going on and
what are you doing to correct this problem? [Info for VFMR
OWNERs]
Answer
»
I don't understand my Owner
Statement format. Can you assist me in understanding the
form? [Info for VFMR
OWNERs]
Answer
»
Do you schedule
regular inspections of my rental property? [Info
for VFMR
OWNERs and others]
Answer
»
Can I hire/procure VFMR to help me grow my rental portfolio?
Answer
The
following column contains periodic postings by Vernon Foster as well as
anchor links to the above topics. Feel free to scroll and read a few
items. If you would like to contribute your suggestions and ideas, do contact Vernon.
UPDATED
12/2020
2024 Hurricane Season begins June 1!
The
majority of our Owners are "good to go"! This means:
- Hazard Insurance for your rental leaseholds has
been in place for at least 30-days. Hazard
Insurance is normally not in effect for the first 30-days -and- Hazard
Insurance, if purchased
after a storm is "named", (usually) offers no protection
from the "named" storm. Usually, the 30-day wait is sufficient to be
the real problem if anything occurs in that first 30-days: fire, wind,
hail, etc (flood damage is excluded unless insured by
National Flood Insurance). Always review your Insurance Policy
Declarations page(s) and update or purchase as needed. VFMR
does not maintain/purchase/own your Hazard Insurance... That is OWNER's
responsibility. VFMR
only requires you carry General Liability Insurance protecting OWNER
(you) and this AGENT (VFMR)
against claim of liability (damage to person or property not owned by the Landlord).
IF
A NAMED STORM ADVERSELY AFFECTS
KINSTON AND SURROUNDING COUNTIES, THIS
WILL LIKELY RESULT IN LOSS OF SERVICES AND WIDE-SPREAD DAMAGE.
Please DO
NOT CALL or otherwise communicate asking " Have you seen my Property?" VFMR
will let you know if there is significant damage, I. E. - to the level
of any Insurance Claim, when
it can...
IF you
cannot wait for a notification, you may come to the
area ( when
it is safe) and conduct your own assessment.
If you
do visit/inspect your leasehold(s), communicate to the
Management Office
date/time/findings; and, avoid
interaction with your Tenant as it relates to Lease terms...
VFMR manages the terms as your
Exclusive Agent.
VFMR
job
description does not entail over-sight or management of repairs or
damage that will
exceed
the value of one-month's
rental for an
individual property. VFMR will assist by
calling the Insurance Agent on file for your Property to
report a claim (IMPORTANT:
Please BE
SURE your Insurance Agent will accept report of
damage/Claim from VFMR)
and/or referring the
Owner
(you) to a contractor appropriate
to the damage. REMEMBER: In the case of wide-spread damage, do
not call
VFMR. We
will contact you if/when
damage information is known.
If
VFMR
does not call you, don't be
concerned. |
|
POSTED
12/2020
Dumb Repair Expense
Ya gotta love it!
- NCGS §42 is pretty straight-forward...
 The
Landlord is required to fix "whatever" irrespective of the cause,
including, but not limited to error by the Tenant. For example: "Little
Johnny" tries to flush his toys and "Lo and Behold!" the toilet backs
up. "Mom" is clueless and reports a stoppage requesting service
(another way of saying, "I have no idea, but my commode is stopped-up
and overflowing! Help!") VFMR
recognizes there is the occasional "normal and necessary" repair
expense which we gladly manage for the Landlord. But, in an effort to
eliminate the Landlord having to "eat" needless expense, VFMR
created an online Tenant Service for reporting and requesting service for non-emergency issues. Prior to the implementation of this service, there was an inordinate time expense to weed out Dumb Repair Expense. The
webpage used by Tenants for this purpose was over six-months in design
and beta testing... And, it is continually updated and adjusted as new
situations arise. The WHOLE IDEA is to SAVE YOU the expense and aggravation of Dumb Repair Expense!
The cost of the design, implemetation and continual maintenance to the
Landlord? NOTHING! It is included with all other services provided our
represented Landlords. As always with our website and any new tools, VFMR does
seek comments and suggestions from the Landlords. Got a moment? Just
select the following link and use it just like your Tenant may do...
Try: Stopped up commode... What do you do? Just follow the page links
to report (if needed) the repair request. BTW, if you "go all the way"
with this, do edit the Subject of the email to include the words
"TEST-ONLY". You surely do not want VFMR to actually send a plumber! I don't think you would pay the charge-back for a Dumb Repair Expense! - Try it!
 REPAIR REQUEST - BTW... "If/When" a Tenant does receive service for a Dumb Repair request resulting in a Dumb Repair Expense against the Landlord's cash flow, VFMR does
conduct a charge-back against the Tenant's Ledger with Notification to
Tenant of its requirement (under the written Lease) to repay the
Landlord (thereby reversing the expense). Yep! We have to honor all
repair requests as well as pay for any repair. But, should the repair
be deemed Dumb, VFMR will
 be acting to protect Landlord's interests... In such case, affecting Tenant's Ledger and commanding payment of the subsequent charge-back.
|
ARCIVE from 12/2020
Update Info: Mixed Topics ("Interesting!")
|
Lenoir
County Tax Valuations Reflect Local Economic Conditions.
Lenoir County conducts
property tax reassessments at intervals of no less than 8-years.
Following is published on the internet.
Revaluation Information
Lenoir County's
last County Wide Revaluation was
completed January 1, 2017, in accordance with N.C.G.S. 105-286. The
next scheduled reappraisal is January 1, 2025. North Carolina General
Statute 105-283 requires that all property be valued at its "true
value" in money.
A
random search of the Lenoir County Tax Records does not reveal an
consistent approach as to which Property received tax valuation
increases... Sort of a "shotgun" approach, if you will. As a rule, the
valuation should reflect reasonable values established two (2) years
prior using comparable sales or the Income/Cost approach. The latter is
customary for rental investment leaseholds.
If
the valuation appears excessive (I would suggest you time/efforts would
necessarily be worth more that a 15 percent change in value), you can
appeal "the past" as it will affect "the future". Sorry... No refunds!
You can only affect "next years" assessment.
So,
how does that work?
The
following link is provided you and published by the North Carolina
Department of Revenue...
HOW TO APPEAL TAX ASSESSMENTS
This
document is rather long and detailed, BUT it IS the definitive
statement on this issue. REMEMBER
THE ADIGE... "If you ain't spent it, you made
it!" Just be sure to consider/weigh your
time and efforts versus potential tax savings.
For Assistance from
Vernon -> Call or
Text at (252)
468-0660 his VoIP number. Please enter the subject as "Property taxes".
Rental
Investor Forecast-Kinston/Lenoir County is VERY GOOD!
You
own Rental Income Producing Property in Kinston/Lenoir County... You
are exactly where you need to be with all or a portion of your
investments.
LENOIR COUNTY... in particular Kinston within the ETJ,
remains a "Rental Town". Families and Individuals have to have SHELTER
(If you don't, you are homeless!) You have heard me speak of Maslow's
Hierarchy (click the hyper-link for explanation). Along with FOOD and FUEL,
everyone
has to have SHELTER.
If
you are interested in expanding your rental base or you are
contemplating adding rentals as an income vehicle, we need to talk! Use the email link below and include subject as
"Rental Investment".
|
Archive 04/2018
R-22
SAY'S "GOOD-BYE"
It's now SOONER... not
LATER!
Some Properties with
Central HVAC are still operating on older R-22 Refrigerant Systems. IF
your rental leasehold(s) still utilize older R-22 HVAC systems... A
word of caution, "Save
Up Now" because the day will come when you will need to
replace, and NOT
repair. The cost of R-22
is climbing every
day!
EPA announced July 2015 the following:
"You may continue to have
your equipment containing
R-22 serviced.
The most important thing you can do is  to maintain
your unit properly. Appropriate servicing minimizes
potential environmental damage and maintenance
costs.
It is important to select a reliable service contractor.
Technicians must have EPA Section 608 certification
to service equipment containing R-22.
Request that service technicians locate and repair
leaks instead of “topping off” leaking systems. This
protects the ozone layer and saves you money by
optimizing performance of your existing equipment.
It is illegal to intentionally release any refrigerant
when making repairs. Technicians must use
refrigerant recovery equipment during service."
A
30 pound cylinder of R-22 is going for as much as $900! Prices will
continue to climb until 2020 when EPA is expected to ban importation of
R-22. Only recycled/reclaimed R-22 will be available. Don't count on
much or the quality of reclaimed refrigerant.
|
Bad Weather & Accidents. How's your Hazard
Insurance doing? |
Quick
Reminders:
1.
[Hazards Insurance] VFMR
does NOT
require you carry Hazard Insurance on your Investment Property. But, it
would be playing "Russian Roulette" to not have (at the very least)
NCJUA coverage. We ONLY require you carry Liability Coverage (by your
personal homeowner's policy or Business Liability Coverage).
2. [No Insurance?] You cannot
bind hazard insurance in less than 30-days. So, if Lenoir County is
threatened with a significant storm and your coverage is lapsed or
non-existant and the threat is less than 30-days away, you are out of
luck. You can only hope Kinston/Lenoir County does not get hit with a
Fran, Floyd or Irene level storm. BUT, an Atlantic Hurricane for this
area is like termites... Not a question of if,
only a question of when...
not the least of which, and more likely, plumbing damage or fire.
3. [Pirates and Thieves!] Liability
Insurance... This is required.
If you have changed insurance carriers or any other sort of change,
send this information to VFMR.
4. [Please READ each Monthly Statement!] "Why did I not receive funds this
month?" The
answer to that question and many more are contained within your
Month-Ending Statement. Before you raise concern, please be sure you
have reviewed your Statement as well as any attached Owner Note or Paid
Invoice... But, if you still have a question after having reviewed your
emailed Statement, do feel free to call or email your question.
5. COSTS OF REPAIR. Example... a sheet of OSB
has more than triples in price in the last 36-months! Labor costs have
easily doubled in the same period. I have no suggestion as to how to
manage this issue except, "Exercise your Right... VOTE (your pocketbook!). VF
6. DIRECT DEBIT for Rental
Receivables.
We are not there just yet... software support by Key Property
Management Systems (service provide for VFMR)
has co-authored with Wells-Fargo this tool, BUT it is neither free nor
inexpense. So, VFMR
continues to encourage your Tenant(s) to avail themselves of their
depository bank's Ofer this service, and so fanline
Billpay services. All of the commercial banks
ofr, it is free to customer checking.
For Assistance from
Vernon ->
Call or Text at
(252)
468-0660 his VoIP number. List
subject as "General Question".
|
Dateline
- December 2020
Ready
for Professional Management?
|
VFMR
is
ready for you. Here's what
the Property Manager considers:
1. VFMR
manages
'Rent-Ready'
Properties. If
your Property is needing significant repairs or renovations, please
know VFMR manages
tenable
Properties only. If your Property is
occupied/rented, it likely meets or exceeds minimum requirements
established by regulatory folks such as the local PHA, State and/or
Federal regs. If it's minor "touch-ups", we can handle it or, at the
very least, advise you. Let's do it!
2. "My Tenant
is
a problem. I'm tired
of the excuses!" Okay...
In 31-years as a professional Manager, I've been
presented with more than a few problem tenancies. You might think you
have to "clean up the mess" before you can hire VFMR. In most cases, that is not
necessary as VFMR is a seasoned Risk
Management
Agency. If the Tenant is the problem, you
are exactly where you need to
be. Waiting for the problem to be solved BEFORE bringing
VFMR on-board is contrary to
what VFMR can and will do for you +
You will likely waste/lose more of your money. Let's do
it!
3. VFMR is dedicated to your
success. To that extent and as one example... The Poster Campaign has
and continues to "brand" VFMR as THE go-to location
for quality residential housing...
The
"Broker from Hell!" story...
 "I have a broker
managing my Property, but I am not happy... He's more interested in
anything but my Property! What can I do?" That's easy... Fire him...
Hire VFMR."
There
is a LOT
that goes
into ethical, legal and professional Property Management. First of all,
someone who manages real property for another (in North Carolina) must
hold a valid Real Estate Broker's License. But, there's more to it than
just the licensure. I could fill page after page of all the intricacies
and details. BUT, you want your rental cash flow and without a bunch of
problems or other concerns. Count VFMR in on that! We want
EXACTLY what
you want. Let's do it!
"VFMR already manages a lot of
Property
for many Investors. Are you sure you have the resources, energy and
time for my Property?" Heck yes! VFMR is kinda like the Marine
Corps
recruiting matra: VFMR is always "looking for a few good
(Investor/Owners)". Let's do it!
"Okay. Nice words and
pitch, Vernon. Can you deliver?" That's simple.
If you want both
accountability and reliability in a Property Manager, you are exactly
where you need to be. There
is no other place, person or entity in this
service area that can truly say it and mean it. Let's do it!
For Assistance from
Vernon -> Call or Text at
(252)
468-0660 his VoIP number. List subject
as "Management
Inquiry".
|
Dateline
- December 2020
 Ready
to acquire
more? Looking
to trade? Time to par down a fixed asset?. |
There has been
discussions and planning for this Investor Tool. As with any initial
"build" (some call these types of things Testing
in Beta,
you input and
suggestions will be appreciated!
So how do you decide?
What makes a Property desirable to the Investor?
(YOU!)
1. Use
Your Formula. There are more than a few ways to determine
viability of a rental asset. Cash-On-Cash; Gross Rent Multiplier;
Capitalization... General Rule of Thumb - Requirement = positive
cash flow. As of the 1986 Tax Reform Act, a Landlord/Real Estate
Investor cannot use losses from a passive
income generator
(Rental Property) to reduce Adjusted Gross Income. Hey, I'm not a tax
professional! Ask your tax accountant/CPA if this is correct... Bet
he/she says "Yes".
Who the Heck enjoys paying taxes?
OR put another way...
How to reduce payouts to "Uncle Sugar", A.K.S. - IRS.
Hint: Following is all about Schedule C Income!
Are
you under
50-years old? [You ask yourself, "Why does Vernon ask
that?"... What was that movie title? No Country For Old Men?] If you own traditional IRAs, you are making practically
nothing on that money! Consider establishing a self-directed Real
Estate IRA. A few Investors represented by VFMR have done just that...
Remember, everyone needs a roof over their head; otherwise, they are
homeless! Using the right acquisition formula, and professional
management to keep you freed-up from the nuts and bolts so as to make
more $$ elsewhere, converting a portion of your retirement portfolio
into a Self-Directed Real Estate IRA can make a big and positive
difference. Check it out.
Go to Kiplinger's Online Info for this IRA.
Owner's Trading Post...
Yes! VFMR always has several Landlords who are
interested in entertaining a sale of certain real estate assets -OR- acquiring more. Let's
cut to the chase... Here is a current list of rental leaseholds offered FOR SALE.
Sorry... No Owner-Occupant Listings. If you need that kind of
brokerage, I can certainly refer you to the best... All efforts by VFMR
are directed at Landlords. I deal with folks that either
make money with rental leaseholds -OR- Seasoned/New Landlords who seek grow/expand or just jumping in.
Want more info? Got a question? I'm all about that. Just use the Email link below and send me your questions, comments or other!
|
Disclaimer:
I am not a CPA nor do I have degrees in accountancy. Since the Federal
Tax Code is more than a few volumes thick, you should already be using
a good and aggressive Certified Public Accountant to plan ways to
safely save your hard-earned money by avoiding needless taxes.
|
Dateline - July 24, 2015
Single-Property
Accounts with an Owner Reserve. |
There
have been several instances where there was an imminent need for funds,
e. g. - Tenant failed to pay the rental which required Superior Court
Filing Fee and Sheriff's Service Fee. In those instances where there
was no escrow, your Agent had previously been able to advance that
Owner Account by a transaction called "Due Agent"
(Agent took its own funds and deposited those into the Trust Account
covering the expense... which was repaid by the Tenant curing
Breach/Paying the fee, collected from the "former" Tenant's Security
Deposit or repaid upon direct request to the Owner). That practice has
been abolished by the Real Estate Commission as a form of co-mingling
(the mixing of personal/company funds with Trust funds). As much as we
consider that type of transaction to be kosher, it just cannot be
conducted.
An
email was sent in June (2015) to
all Owners of single-property accounts stating $200.00 would be held in
escrow (an Owner Reserve) so as to meet any immediate/eminent issue
which required funds. Now, one might simply say, "Hey, if you need some
funds for
this-or-that, just send me an email or give me a call." Sounds
simple, right? Wrong.
:( The need is always "right
now". It is impossible to hold up the entire calendar while an
Owner sends the necessary funds.
The
Owner Reserve is just
that... Owner funds held for emergency/gotta-do-it-now situations.
UPDATE 11/2017. Agreement for all Owner Accounts include the Owner
Reserve provision [was effective 01/2016].
For Assistance from
Vernon -> Call or Text at
(252)
468-0660
his VoIP number. List subject as
"Reserve/Escrow".
|
Generally speaking,
escrow for calamity or other shortfall is unncessary with Owner
Accounts containing multiple occupied leaseholds (as there is
normally an available cash flow if an
urgent need arose).
|
Dateline - July 24, 2015.
Market
Conditions for Kinston/Lenoir County Service area. |
There appears to be some
movement to
positive announcements of recent. You may have seen this news...
Kinston City Council
offers Lease to the Texas Rangers (MLB) farm
league program to commence with the 2017 Baseball season. The deal is
pending approval by the Carolina League who governs the "who and where"
of professional baseball in the Carolinas.
Lenoir Community College
announces expansion of its robotics program
(aimed at providing educational base for manufacturing jobs using
computer programming skills, i.e. - Robotics).
Rumors of Business
announcements exist... We are told there will
(hopefully) be an annoucement of a new manufacturing placement in
Lenoir County... We are also told the Dupont Sonora Plant is nearing
completion of a major facility expansion which should add a few more
jobs to the local economy.
Kinston/Lenoir County
needs meaningful jobs to bring in both capital
and resurgence of value to the local service area. One or both of the
latter means greater value for the Investment Property Owner's holdings
as well as a renewed opportunity to command higher rents. As changes
occur, you can look for your Property Manager to react
accordingly for
your interests.
For Assistance from
Vernon -> Call or Text at
(252)
468-0660 his VoIP number. List
subject as "Market Conditions". |
Dateline -
July 24, 2015.
"What
can I do or What should I NOT do?." |
There
is alway a good answer to an investment strategy. We are all
familiar with "Buy Low. Sell High" plan...
It's a good one, albeit a
rather simplistic approach that applies mainly to liquid assets (cash,
common stocks, etc). But, it does not adapt well when it comes to real
estate investments. Here's a quick take on several scenarios:
1. Property is held "in
fee" (don't owe a bank). Stay put! You are in
the "catbird's seat". If you cash out in this market climate, you will
most certainly be on the losing end of an investor sale... But for
argument's sake, you decide "What the heck, I'll just take the loss".
If you take the likely net proceeds and invest it in a non-real estate
vehicle, what kind of return would you likely get? 4% 7%? Maybe
9%? The odds are extremely good, your return would be
significantly LESS than providing a rental housing. Hey, remember...
Kinston's leaseholds are 66% rental! Kinston is a rental leasehold
community. THAT is very good for you.
2. Cash Flow is positive
(green). Same thoughts apply, even if you owe
a bank a monthly payment. If the investment is "working", best to
remain in the game.
3. Someone writes you a
letter "I'm buying houses/rentals, call
me". You can send me the letter and I'll respond for you... Your
Property is an actively managed leasehold. But, if this interests you,
reasonable value (to you) is very likely not available from this type
of solicitation. I do know of a few folks who are taking the "shotgun"
approach in Kinston and Lenoir County... What I mean by "shotgun"
approach is: If you put out enough hooks with worms, a fish will likely
bite. The "hooks and worms" are cheap to this type of speculator as the
only thing it takes is a little time searching tax records for absentee
ownership, a First Class postage stamp, copier (reasonable quality so
the letter looks personal) and someone to answer the phone. I
will say it, but in a different way... The ONLY reason to sell a
Property held "in fee" or otherwise showing a profit should be
characterized by the word "catastrophic" (the Owner/Seller has to have
money at any cost... which will always result in a very poor return).
4. The Tenant says "Can I
buy my house?" Your answer would be
either "yes" or "no". What do they say? Anything is for sale if the
price is right. We have this issue covered in our agreement... The
Property is not for sale, but if the Tenant approaches my office with
this question, I will certainly let you know. If the Tenant were to
contact you directly (which should not happen, but...) do not discuss
any potential terms or other particulars. I am your Property Manager
and I am a licensed Broker... The Laws and Rules governing real estate
contracts do not preclude a private Owner selling his or her
leasehold(s) without Broker representation. But, there are State
Statutes which do govern real estate transactions which can be unknown
or misunderstood by non-licensees. Regardless of the situation, I
represent your interests and anything outside of the normal monthly
management... You should not hesitate one-minute. Call me.
5. Property is not
producing a positive cash flow. Okay... On face,
this is not good. There is not a simple answer. Yes, a "green" cash
flow is the goal. Your CPA may be telling you, "Hey, your Schedule C
Property/Properties are doing well!"! Sometimes, the negative cash flow
works... But, a good Certified Public Accountant is the best judge for
the performance of your estate (Tax Laws are in constant flux, so even
if you think your investment portfolio is too small to justify a CPA's
fee, think again). The question begs, "What do we do to get from 'red'
to 'green'"? Generally speaking, vacancy loss and/or expenses would be
where to look. If you are looking at an average that would be a
deficit, you and I need to talk. I've been working with investors since
1984... Do the math. That's over 30-years. If I have not acquired a
reasonable amount of knowledge beneficial to your decisions, I've been
on another planet.
...These are a few topics
I wanted to share... if you have some other
items or ideas you think would be good to discuss and impart, let me
know... I will try to get some good information your way each quarter.
For Assistance from
Vernon -> Call or Text at
(252)
468-0660 his VoIP number. List
subject as "Planning & Strategy".
|
Archive from
July 24, 2015.
Some
"To Do's" for you. |
What do you see in your
mailbox near the end of August? Answer: Lenoir
County Tax Invoice. Someone once said, "If you ain't spent it, you made
it." So, let's talk about saving a few dollars which means increasing
your bottom-line.
If you are local to
eastern NC, Monday evening, June 1... If you were
watching 9 On Your Side, you may have seen Angie Foster and myself
addressing the Lenoir County Board of Commissioners. The Reporter did
not catch my words when I directly addressed Mike Jarman, the County
Manager... Mike had given a verbal report to the Commissioners the
previous week that Property Tax revenue was "flat". As I have observed
declining values since mid-2008, the market values continued a downward
spiral for the following 5-years. Historically, Property Tax values
(that is before 2008) have usually been below market value. What
happened pursuant to the mortgage melt-down and recession was a hard
and deep reversal of that old axiom.
So, what did Vernon say
to the County Manager and Commissioners? "Property
Tax
values are down. If we do the math, it has the potential to be a
significant loss to the City and County."
I can get more detailed, but anyone (that's YOU!) has the right to
present a challenge to the Valuation placed by the County. How? Value
is determined by one of two methods: Comparable sales -or- Income
Approach. But, the basis for the challenge must be from sales 2 to 3
years PRIOR to the current (2015) year. The valuation of your Property
was established BEFORE 2008 (unless you have already lodged a challenge
years prior). 2015 is the revaluation year. In 2012, values had been
"tanking" since mid-2008. If you assume a loss of vlaue by, say 25%,
this will add up. For example, your rental leasehold has a Tax Value of
$100,000 prior to 2008, and it LOST value by the 25%, that's $25,000
that you reasonably not pay be assessed taxes. Tax rate is
$1.49/hundred value for City+County. That comes to $372.50 net tax.
That's $372.50 you can use against other operating expenses. Otherwise,
that's $372.50 just tossed to the 4-winds! Again, if you don't spend
it, you've made it! Right?
The latter is an example
of what you could do to improve your
bottom-line... In some cases, that savings could be more... or it could
be less.
Now, if you are
interested in a possible reduction in your rental
property tax expense, you can do it by the INCOME APPROACH or (if they
can be found), good and proper comparable sales of similar investment
property. I'm willing to bet that over 80% of the rentals managed by my
office would qualify for some degree of reduction in tax basis. My
thought... Anything over 10% is worth the effort.
Let me know if you have
questions, I'll be glad to answer them.
HAZARD &
LIABILITY INSURANCES. Our Agreement does not require you
to own any hazard insurance (against fire, wind, rain, etc). It does
require you to own General Liability Insurance (against Clicker,
Clacker & Cloak suing you because the Tenant's friend tripped
over
a tree root in the yard of the rental property). Both are important
because you want to protect your investment as well as your own
personal estate. Regarding the latter, Lawyers go "after the deepest
pocket". Ask yourself: "If that tree root ended up in a Judgment for
$500,000 against my estate...". I don't have to finish that thought. It
would be horrible. This does not happen often (Thank
Goodness!).
But, it's kind of
like termites in the Southeastern US: It is not a question of "if",
but it is a matter of "when". Hint: That's why it is a very good idea
to have a Termite Bond on your rental structures. When it becomes
visible, a lot a damage has already been inflicted. Sorry... got
side-tracked by termites!
Back to insurance... Most
Owners have got their insurance Agents "trained"
:)... Each renewal period, they have their Insurance Agents fax or
email to my office a CERTIFICATE OF INSURANCE or written verification
of liability coverage through the Owner's Primary residence homeowner's
policy. Either one is acceptible. Neither is not... So, just call your
Insurance Agent and verify your Liablility Coverage and extend that
coverage to VFMR. Your Insurance Agent
gets its commission
with your renewal... Let them do a bit of leg-work for you with this
item. |
|
More
later... I'm a bit overboard, but that's me!
Shopping
for a Property Manager? You've come to the right place!
Revised 11/2017.
 QUESTION:
Why
do you need (this)
Property Manager? |
ANSWER:
Two primary
reasons.
* Resources. V F M R is not just Vernon Foster.
Vernon's a pretty big deal, but add to
the equation: Full-time/Knowledgeable Staff; Hand picked and seasoned
repair vendors (at prices the individual cannot command); "Insider"
contacts and influence; Dynamic exposure for your investment property;
A committment to constant and positive improvements in the management
of your Property; over 60-years of combined Property Management
experience and knowledge; accessibility (You have a question or need?
We are available to you.); Risk Management approach and more...
* Time.
What is your time
worth? What does it cost you to self-manage or be affiliated with a
"mixed agenda" service (remember, V F M R does not sell insurance,
provide
investment counceling (except when it comes to your property), build
houses or run a typical List/Sell brokerage. Also, consider your
"emotional equity" which can and does come into play dealing with
Tenant issues. V F M R will free up your time for
other productive
endeavors.
Consider This. For
the
period of September 2013 to March 2014, VFMR has procured (leased) over $30,000 in monthly
gross rents for
its Owners. This equates to "bankable" investment value of over $363,000 (Annual
Gross
Rent Role). The
numbers speak
volumes... this is just a two-quarter "run", folks. Vernon
Foster and VFMR want you to work with you. Email
or Call Vernon. He's glad to answer
your questions
and excited for the opportunity.
NEED TO
KNOW. It
is important for you to know, Property Management is a full-time
endeavour. This is the reason for the above statement. Collecting and
accounting to you for the rents due you is just a single-facet of the
mission. There are more: Availability
of the Manager and its Staff to both
Owner and Tenant Tenant's
confidence in the Manager and its Staff, constant
and proactive revision of management
methods and tools Maintaining,
nurturing and adding positive
relationships with any and all who affect the mission - City of
Kinston Customer Services, offices of Clerk of Court and specifice
Judges, the Sheriff and Police Departments and its key contacts, Repair
Vendors as true assets,North Carolina Real Estate Commission Legal
Staff, the Tenants themselves, and more Property
Manager's personal observations for each
and every rental Property Property
Manager's personal contact with the Tenants Anticipating
needs and potential risk of the
physical leaseholds as well as laws, rules and regulations affecting
risk Streamlining
of the information flow between all of
the above Understanding
of the Manager that the success of the
mission goes WELL beyond any idea of "9-5".
For Assistance from
Vernon -> Call or Text at
(252)
468-0660 his VoIP number. List
subject as "Management
Inquiry".
|
VFMR is
not the (typical) LIST-SELL BROKER. |
Successful
management offices "stay the course". If broker/manager is looking at
profit
centers unrelated
to your needs, I consider this to be a conflict
of
interest. Add
to this...
the broker/manager who has its own rental property mixed in with you
rental property... Now, that really is a conflict. Your needs and those
of your tenancies could take a back seat
to a particular Broker's goals. The dedicated management office is to
care for its Owners and their Tenants. Those interests must be first
-and- last. Property Management is a service-oriented profession. So,
Vernon Foster Management & Rentals, LLC "VFMR" is dedicated to "just you".
IF there will be any brokerage activity, it will be directly related to
the needs and goals of investment property, i.e. - 1031 exchange,
acquisition of new rental property by an Owner, divesting of existing
rental property, Contract for
Purchase in a management relationship.
One
other way to assess my reasoning, a
typical Sales Agent office that
"side-lines" some rentals would "water down" the ability to
effectively
manage... worse yet, not very experienced with the risk-management
required of a seasoned Property Manager.
When you call, we know why. We do not have line-extentions
saying "Press 1 for sales, 2 for insurance, 3 for 'Tom, Dick or Harry'."
You do
get "VFMR".
For Assistance from
Vernon -> Call or Text to
(252)
468-0660 his VoIP number. List
Subject as "Question for VF".
|
Approach? Short-term vs Long-term.
Each
Owner's approach to their
rental leaseholds varies. Some folks
check "every 'i' and cross every 't'", while others take more of a
"cash" approach to the investment. As your Property Manager, I will
assume the latter. Too little information is a problem... Too much
information is never a problem. Strategic planning is important. Older
structures do require more attention and planning for future
needs. Protecting the viability of the structure as an income producing
tool does allude to that dreaded word "expenses". It is inevitable that
paint peels and components wear. I will be periodically communincating
with each Owner as to scheduling and planning. This will reduce costs
in the long-run. Asset Management is not in the managers written job
description, but "Vernon Foster" is telling you now. it just got added!
LOSSES SUCK!
Key
Strategy... "Keep it Green". Who wants to show a loss (in any business
endeavor). Remember, as a Real Estate Investor (Landlord, if you will),
IRS automatically considers your Profits (or losses) to be the result
of "passive participation". It is my understanding, passive losses
cannot be passed to/against 1040 income [all this stuff has to do with
Sole Proprietorship (Ownership is not a LLC or corporation). The adage
"If it ain't green, it ain's worth it" has great merit. If you are
trying to figure out how to save paying taxes, that's a GOOD THING. If
you get a tax refund... OMG!!! If you are paying taxes, you are making
$$$. THAT'S a GOOD PROBLEM. Back to the question about "pass-though"...
I am not a tax authority, but someone told me if you have some level of
discretionary decision-making such as authorization of an expense
greater than $149.99, you can consider yourself as Active Participant
which would allow you to pass-through losses from Schedule C to your
1040 Gross Income (to reduce your overall tax burden). BUT AGAIN... No
one wants to use losses as a business model. This should be either
non-existent or exceptionally rare. How's it go? Be happy and pay Uncle
Sugar his due. :-)
For Assistance from
Vernon -> Call or Text at
(252)
468-0660 his VoIP number. List
subject as "Planning".
|
Revised
11/2017.
 Contractors
& Repair Expense. |
A lot
of contractors and associated repair services "love" to "hookup"
with a management company, for obvious reasons. There are specific
requirements of ANY such vendor dispatched to rental property, some of
which are: Contractor's Business Liability Insurance coverages, promise
of reduced or very competitive pricing, observation and initiative as
an additional layer
of risk management ("eyes
& ears"), "go when I say go", Contractor's
warranty of the finished job,
and more. As the vast majoirty of our Owners utilitze this service, do
know there is an agreed limit on VFMR's
discretionary actions. As always, repair instructions from you, the
Owner, is "fluid". At any time, you are certainly free to conduct these
types of repairs independent of VFMR
within the bounds of the Lease, HUD
HQS and/or governing law.
 You
pay this management company not
one extra penny for this service. It is
both prudent and reasonable to allow coverage for "normal and
necessary" incidents. If ever you have a question regarding any repair
or
its cost, I want to hear from you.
For Assistance from
Vernon -> Call or Text at
(252)
468-0660 his VoIP number. List
subject as "Repairs OR Cash Flow".
|
Revised 11/2017.
YOUR
SUGGESTIONS AND COMMENTS. |
Okay, by my own volition, "VFMR
is the best!" But,
being "top dog" requires
continuous learning and committment to the mission. Add to that, your
comments, observations, suggestions are needed to gauge the current
efforts as well as make good modifications..... Tenants are utilized
in the same fashion. So, periodically let me know. Also, I will
be sending you emails with ideas for your feed-back.
For Assistance from
Vernon -> Call or Text at
(252)
468-0660 his VoIP number. List
subject as "Feedback for You".
|
Archive from 11/2017
STATEMENT FORMAT and other changes. |
You
either love it or hate it! If you are reatively new to this reporting
method or just occasionally dig in a bit deeper, it is an Accountant's
style of reporting. Yep, takes a bit of getting acquainted, but it will
provide the Owner great tools for analysis of your rental property
performance.
Two recent issues/questions have come up:
1. Why are there two "CASH FLOW" lines, but the figures are different?
2. Why is MY deposited funds not the same as the (first
line) CASH FLOW?
It is a question of semantics. The use of the descriptive tilte CASH
FLOW in the two locations IS confusing.
The first CASH FLOW line represents not the actual flow of funds
between VFMR
and the Equity-Holder (real live person or entity), but PERFORMANCE.
This is ONLY stating the current month and year to date PERFORMANCE of
the Account. At this point (location on the Statement) we are NOT
talking about "cash".
The second CASH FLOW represents the actual/physical flow of "cash"
(funds, if you will) between VFMR
and the Equity-Holder (You... or the Entity you own). THIS CASH FLOW is
the amount paid from one Party to the other with the net monthly amount
being the actual cash/funds sent into the Equity-Holder's depository
bank account.
I have requested VFMR's
software provider make two line Title changes to clear up what is a bit
vague. This change should be effective with the November 2017 Monthly
"ACCOUNT" Statement.
For Assistance from
Vernon -> Call or Text at
(252)
468-0660 his VoIP number. List
subject as "Monthly Statement".
|
Archived from May 2018
DO NOT IGNORE THE "TAX
MAN"!
If
you have any
real property taxes unpaid/outstanding for any
prior tax year, it is VERY
important you understand the followings:
- Assessed
tax values were recently "hammered" (many reductions) as result of the
2017 Revaluation. An unfortunate reflection of Property Values which
were lowered resulting from the 2008 Recession... which still adversely
affects Lenoir County). This means LESS tax income for Lenoir County
and Kinston governments. This puts a LOT more emphasis on the
collection of past due taxes.
- The
recent Lenoir County election ballot presented voters with the option
to add a .05% tax increase to off-set the loss of Property Tax income.
This initiative was voted down... "No".
- A
sign of growth... or lack thereof... Lenoir County has been placed in
TIER 1 IMPOVERISHED Status by NC Department of Commerce. It means what
it means. This designation did/does open the door for State funds to be
received by Lenoir County for operation of the local government
(schools, essential services, etc.).
- VFMR is not responsible
for Owner's Real Property Taxes.
It is one of the Owner's cost of operation. Unfortunately, we have
recently seen several Owners get very concerning Notices from the
Lenoir County Tax Assessor. Do know, the "Tax Man's" Authority is both
wide and sweeping. It can cause a lot of problems. This is the first
year I have seen tax liens and garnishment letters for the preceding
year, and for amounts as little as $30+/-... If you were a few days
late and your tax received a penalty and/or minor interest, LOOK OUT!!
 You
can and will get hit with a Lien Notice, Garnishment of Wages,
Garnishment of Bank Accounts and/or the threat of Tax Foreclosure.
Guess what the County Attorney charges to write you a "nasty gram"? Try
$1,200 for an outstanding 2017 tax invoice. No friendly reminders... The
Lenoir County Tax Assessor is going through the alphabet... Looks like
they are on about the letter "G" as of a few days ago. Of course,
that's just supposition on my part.
- The
vast majority of these situations are simply innocent error, but like I
said, no more gentle reminders. Folks, it's HAMMER DOWN! The local
governments need the cash, so BE VERY CAREFUL and do NOT get hit with
penalty, interest, attorney fees or worse.
For Assistance from
Vernon -> Call or Text at
(252)
468-0660 his VoIP number. List
subject as "Lenoir County Taxes".
|
Revised
11/2017
ACH
& YOUR STATEMENT |
If you are
considering VFMR for Property Management,
I am really excited to be able to provide this serivce. The servicing
bank (Select Bank, Goldsboro, NC) has been really proactive in
supporting the ACH.
The availability of funds (for the owner) are now PDQ... no
"snail
mail" delay as well as faster access to deposited funds. Most of the
larger banks will be "second banking day", but you can check with your
bank for
their specific policy as to "funds availability". Your Statement
will also have attached any invoices for repairs. Those invoices will
be the scanned image. I suggest you make a folder on your computer and
name it "MONTHLY STATEMENTS". If something ever happens to your
computer files, not to worry as I will have the identical file archived
on my end.
For Assistance from
Vernon -> Call or Text at
(252)
468-0660 his VoIP number. List
subject as "Bank Deposits".
|
Posted 01/28/2021
Your Residential Leases: Fact, Fiction or Excuse
Vernon Foster, Property Manager
A message to Landlords considering management by VFMR as well as info to our represented Owners.
- If you are experiencing vacancy losses due to Covid-related claims, you are not alone. I have received calls from multiple Landlords (not in agency with VFMR) asking me what I am seeing and what can they do to "stop the bleed".
Short
Answer: "An once of prevention is worth a pound of cure." Just as the
case with the Mortgage market melt-down in 2008, the signs were there.
Those who "read the 'tea leaves'" saw that one coming. There's not a
tinker's d&*%$ anyone can do anything about valid claims. The election of 2020 is past and Executive Orders (Governing by fiat ) is the "flavor of the day".
- If you are one of VFMR's represented Landlords, you will be pleased to know that these edicts have affected only 1.5% of all the active tenancies managed by VFMR in behalf of its Owners/Landlords.
Why so few?
Folks, it all goes back to "An once of prevention~". Executive
Orders mandated by Governor Cooper as well as the Federal Government (through the CDC) are invitations for tenants to ignore the Lease terms, but providing no help or assistance to the Owner/Landlord, who cannot simply ignore  the
expenses and payments it must make shorting its other rental proceeds
or other reserves or worse yet, from its 1040 income. No assistance or consideration whatsoever is given the Owner/Landlord/Investor. You are expected to "take it on the chin"!
Please
do not misinterpret what I am saying. Yes, there will always be some
individuals who will need government assistance as they are incapable
of coping with life's challenges.
I am saying the (apparent)
willingness to surrender personal responsibility to "Big Brother" is a
mistake. That's a rather broad statement which can be applied to many
of our problems. But, the best way to consider this view?...... If you are not familiar with THE UNCOMMON MAN, by Dean Alfange (a 20th century academic Professor, and a democrat), do select the link to read the poem. You are welcome to share this link with any and all!
This will fully explain my attitude and position.
Not much else to add... Please know VFMR,
nor Vernon Foster, intend any political statement. We all have issues
and concerns to which we must give thoughtful consideration and then
respond based upon the best available information and facts in order to
adapt to any new environment. What's the USMC's matra? Improvise, Adapt and Overcome.
IF you are represented by VFMR, you are already in the right place. If you are self-managing or you have management who operates under the philosophy of "What happened?!", you are well advised to consider VFMR as your next best move.
- "People
can be divided into three groups: Those who make things happen, those
who watch things happen, and those who wonder what happened."
- John W. Newbern/ Nicholas Murray Butler
|
"Good Property rents
quickly! Please
do not delay!"
2803
W.
Vernon Ave., Suite D, Kinston NC 28504
VERNON FOSTER
MANAGEMENT
& RENTALS
Office: ( 252 ) 522-2803
Fax: ( 252 ) 558-1530
Hour of Operation:
Monday-Friday, 9-1 & 2-5
VERNON FOSTER
MANAGEMENT
& RENTALS,
L.L.C.
does business in
accordance with
FAIR
HOUSING LAWS and FAIR
CREDIT REPORTING
ACTS. 
VERNON FOSTER
MANAGEMENT
& RENTALS,
L.L.C. is LICENSED IN NORTH CAROLINA BY
THE
NORTH
CAROLINA REAL ESTATE COMMISSION; FIRM LICENSE NO. C23655;
BROKER-IN-CHARGE, VERNON F FOSTER, LICENSE NO. 90254.
This
site is under constant revision
so as to provide YOU with the
very best
Real Estate Rentals Services available for Kinston, Lenoir County and
neighboring counties. vernonfoster.com
and all contents
of
this URL are RESERVED
and
PROTECTED. Owner, Vernon F
Foster and Vernon
Foster
Management & Rentals, L.L.C. reserve all rights to text,
graphics and
images. You
may download for
personal use. Any
commercial use, in whole or in part of any text,
graphics or images
is
strictly forbidden.
Copyright
© 2012-2023
|
