Property Management and Investor Information: September 2008

The current tax law provides that a homeowner can rent their home out for less than 15 days per year tax free. This is a benefit that most tax accountants and most taxpayers do not know about or and don't take advantage of.

It should be noted that the taxpayer doing this cannot write off any expenses of doing this.

One strategy for a business owner is to rent their house out to their company for company events.  You might have an office dinner, a retreat, a monthly meeting, or have a business guest spend the night while visiting your business.  Your business could then pay rent to you.  The business writes the rent expense off and you, the homeowner, gets to keep the funds tax free.

Another strategy is to rent your home out during sporting events or during a busy summer rental season.  But you have to be in an area that has this need.

Be sure to check with your tax accountant!

If you own rental property you might want to keep it a secret from your relatives.  First, they will think you are rich and will start letting you pick up the entire check at dinner.  Second, they will want to rent from you. 

They will, of course, tell you that their credit is shot, they have a bad rental reference, and they just lost their job but have a new one in the pipeline.  Oh, and they don't want to pay for a credit report since they told you they had bad credit.

If you run your rentals like a business, you must treat all prospects the same and run their credit, check out their rental references, and verify their income.  

There are worse things than evicting a relative, but it does make Thanksgiving Dinner a bit uncomfortable.

In the 3rd Quarter of 2008 Elk Grove single family dwellings have continued to rent out at a strong pace.  Elk Grove covers a large area and three zip codes:  95624 (old Elk Grove east of Hiway 99), 95757 and 95758 (Laguna and Laguna West).

Rents in Elk Grove for a three bedroom home ranged in price from $1000-$1800.00.  The average was $1368.00 and a total of 63 homes were on the market during our survey day.  The underlying price is pretty close to $1.00 a square foot, but does vary based on location and condition of the home. 

Rents in Elk Grove for a four or five bedroom home ranged from $1360.00-$1980.00.  The average was $1646.00 and a total of 52 such homes were on the market on our survey day.  Again, the underlying price is close to $1.00 a square foot. 

Keep in mind that the bigger the home the less per square foot in rent.  As a landlord you never want to be the most expensive rental in a zip code, that is a recipe for a long vacancy.

If you need help pricing your rental in Elk Grove or anywhere in the greater Sacramento region, give us a call or email.

www.HomePointe.com

Alexandra Machado has joined HomePointe as our newest property manager.  Alex has a lifetime of experience watching her father (me) run the business for over 25 years.

She recently relocated from New York City after having worked for a large real estate company in Brooklyn the past year.  Prior to that she graduated from the University of Arizona with a degree in Marketing from the business school.

Alex is managing a portfolio of properties in Natomas, West Sacramento, midtown Sacramento, Land Park, South Land Park, Greenhaven,  Pocket, and Elk Grove. 

Alex is my daughter and I am very proud to have her join the company.  She was only six years old when I took her to my office one afternoon many years ago.  She sat in my chair and put her feet on the desk and proclaimed, "One day this will all be mine".  Well, it appears that day is getting much closer!

If you need a property manager you can contact Alex at amachado@HomePointe.com or at 916-429-1205 x 700.

www.HomePointe.com