Tired of being a residential Landlord, but like the rental income?

Isn’t it great to receive that rental check on time every month and not have to lift a finger? You have the perfect tenant, never calls, maintains your property as if it’s their own and always sends the rent in on time every month like clock work. Your only job is to pay the property tax bill twice a year.

If that’s not your experience, and you are tired of the constant turn over of renters, the handyman request calls, handling neighbor complaints or collecting late rents, but you like the income and property value appreciation, perhaps you should consider a different type of property.

You can exchange your residential income property for a small retail property with a quality triple net lease tenant, such as Walgreens, MacDonald’s or a bank.

A triple net lease (NNN) means the tenant pays the property tax, insurance and building maintenance. All you do is receive the rent payments. A 1031 exchange means you defer your capital gains tax from selling your residential income property. All the proceeds from the sale can be used to purchase your new retail property.

If this sounds like something for you, give me a call for a no obligation consultation.

Make Your Rental Properties Smoke-Free

Why would a landlord want to prohibit smoking?

In addition to the important health benefits of reducing exposure to secondhand smoke, prohibiting smoking can decrease the risk of accidental fires and may even reduce fire insurance premiums. Landlords also will avoid complaints from non-smoking tenants and may see a significant reduction in maintenance and turnover costs. Cleaning and refurbishing a smoker’s unit can require additional time and effort to repaint and to replace carpets and drapes. By prohibiting smoking in a unit, landlords can minimize or eliminate these expenses altogether.

Is it legal for a landlord to prohibit smoking?

Yes. Effective January 1, 2012, California Civil Code 1947.5 provides that a landlord has the right to prohibit the smoking anywhere on their property, including common areas and individual units. This right applies to new tenants who enter into lease.  For existing tenants, a new smoking restriction constitutes a change in terms of tenancy. The terms may be modified with reasonable notice and in compliance with all state and local laws for month-to-month tenants. For tenants on a lease, the landlord cannot change the terms during the lease period without the tenant’s consent.  In this case the landlord will need to wait until the end of the lease period to add the restriction.

U.S. Department of Housing and Urban Development (HUD)

HUD has recently launched a set of tools to encourage landlords to adopt smoke-free policies to protect tenants from the dangers of secondhand smoke and to reduce property maintenance costs. The kit includes:

• ·      Going Smoke Free – Steps for Landlords
• ·      A Landlords Guide to –No-Smoking Policies
• ·      Sample Letter to Tenants
• ·      Sample Lease Addendum
• ·      Legal and Health Information
• ·      Frequently Asked Questions
• ·      and more 

Download yours today at: 

Smoke Free Housing / A Toolkit for Owners ... - HUD

How much is your investment property worth?

As rents increase, so does the value of your residential income property.  Investors typically use an income capitalization approach to determine the value of rental property. Higher income equates to a higher property value.

Rents in the bay are at an all-time high. According to RealFacts, the average rent in our area for the first quarter of 2014 was $2,043, up 10% from 2013.

In response, over the past two years, apartment building construction has been booming, bringing an estimated 9,000 new units to the south bay alone, according to the SJ Mercury News. As inventory increases, rents may begin to level off somewhat in, which in turn will slow down the appreciation in income property values. If you have been considering liquidating your income property, 2015 may be a good time.

Help Your Tenants Reduce Water Consumption in 2014

If you are considering updating any of your rental units, be sure to take advantage of some of the water conservation rebate programs being offered during our drought. Here are several that I came across:

Santa Clara Water District: http://www.valleywater.org/programs/rebates.aspx

The Santa Clara Valley Water District is offering rebates to Santa Clara County residents, businesses, and agencies for the following:

·       Installing qualifying High Efficiency Toilets (HETs) that save, water, energy, and money

·       The Landscape Rebate Program is available for Santa Clara County residents, businesses, and institutions that convert qualifying high water using landscape to water efficient landscape and/ or upgrade to qualifying irrigation hardware that results in water savings. In order to qualify, you must participate in a pre-inspection survey prior to applying for the program.

·       Purchase and install a qualifying high-efficiency clothes washer and you may be eligible to receive either up to $200 for a combined Water Agency and PG&E Rebate on an Energy Star® Most Efficient Qualifying Clothes Washer.

For San Mateo County, Bay Area Water Supply & Conservation Agency (BAWSCA) is offering similar rebates to its member agencies

BAWSCA: http://bawsca.org/water-conservation/

List of participating agencies: http://bawsca.org/docs/HET_participants_July%202013.pdf

·       Rebates of up to $100 per toilet if you replace a toilet that uses 3.5 gallons per flush (GPF) or more with an EPA WaterSense Labeled HET.

·       The Bay Area Water Supply and Conservation Agency (BAWSCA) Lawn Be Gone! Program provides rebates to approved customers that convert water-thirsty lawns to water-efficient landscapes. 

Through a partnership with PG&E, BAWSCA and participating member agencies are offering combined water and energy rebates of up to $200 per washing machine if you purchase a qualifying efficient clothes washer.

2014 New Smoke Detector Law for Landlords

Starting January 1, 2014, Health and Safety Code 13114 and 13113.7 states that battery operated smoke detectors must be manufactured with non-removable, non-replaceable, 10-year life batteries and several other features.  All smoke alarms installed in residential rental units must be on the State Fire Marshal’s list of approved devices. In order to be on the list of approved devices, the smoke detector must:

1.     Display the date of manufacture on the device

2.     Provide a place on the device where the date of installation can be written

3.     Incorporate a hush feature

4.     Incorporate an end-of-life feature that provides notice that the device needs to be replaced

5.     Contain a non-replaceable, non-removable battery that is capable of powering the smoke alarm for a minimum of 10 years (this last requirement applies only if the device is battery operated)

Currently only landlords of multi-unit dwellings are responsible for testing and maintaining smoke detectors. Starting January 1^st, landlords of both single family and multi-family units will be responsible for annual testing and maintaining smoke detectors in all units.

In order to facilitate the owner’s obligation to test and maintain the devices, owners or their agents are permitted to enter the unit for the purposes of installing, repairing, testing, and/or maintaining the devices. However, owners are required to provide tenants with reasonable notice, in writing, of their intent to enter the unit prior to going in. Reasonable notice is generally considered to be 24 hours in advance of entering.

When performing your next annual test, rather than replacing batteries, it may be wise to replace the devices with the new 10-year battery equipped detectors.  Also, when putting a new tenant into a unit, take the opportunity to update the smoke detectors.

If you apply for any type of building permit for work exceeding $1,000, you will need to demonstrate that your smoke detectors are on the Fire Marshalls list of approved devices. Failure to comply with the law can result in a fine of $200 per violation.