Archive for June, 2011
How Landlords Get a Bad Rap
You’re a good landlord. You’re out there working your tail off trying to provide a nice product to your great tenants.
Then wham! Along comes some tenants that have been trained how to be bad tenants by bad landlords. They’ve been taught that it’s okay to pay the rent late. It’s okay to party and disregard the quiet enjoyment of their neighbors, etc. Heck, that bad landlord might even have paid the bad tenants cash to get out of the last apartment instead of doing an eviction. The bad tenant has been rewarded for his bad behavior by bad landlords, and thinks bad behavior is the way to get ahead. [You always get what you reward!]
Here’s an example: I recently got some great new tenants that moved to one of my apartments because their last landlord would not take action to stop the all-night-long heavy traffic and partying going on in the apartment upstairs from them. Their last landlord just let my new tenants out of their lease instead. Now that former landlord has bad tenants upstairs from a vacant apartment he’s trying to rent! Where’s the logic in that?
I don’t have any of that kind of crap going on in my units. All of my tenants know that I have an evil twin…and none of them want to meet her. 😉 There’s a sort of “ethics presence” in knowing that I have the will to confront bad tenants if I have to, and that I intend to protect the quiet enjoyment of my good tenants. Consequently, I rarely have to bring out my evil twin. [Perish the thought!] More…
“For Landlords, This Could Be The Perfect Storm”
My son and investment partner, Josh Mettle, publishes an exceptional Mortgage Blog as well as a print newsletter. In the Spring issue of his print newsletter, he said something very important for landlords that I want to share here:
“…I should mention that rental properties are about as good a hedge against inflation as you can possibly get. I’m personally getting pretty nervous about the money printing and inflationary actions of the Federal Reserve. One of the first things that goes up in an inflationary environment is rent and, as a landlord, you have the benefit of making your fixed mortgage payment as you steadily keep raising rents to keep up with inflation.
We also have a very unique and pro-landlord situation brewing today as many people’s credit has been damaged and many others have just been convinced by the media that it might just be better to rent. I personally think that is a bad decision, but for landlords this could be the perfect storm. More…
Ordinary Income vs. Capital Gains
It often pays to “venture” outside of your area of expertise and inspect the thoughts of other professionals. Fred Wilson is an investor, venture capitalist and professional blogger living in NYC. On May 2, 2011, he posted a blog about the difference between ordinary income vs. capital gains which is really worth reading for income property investors:
“Today, I’d like to talk about ordinary income vs capital gains. This is not tax advice. I am not a tax lawyer or a tax accountant. I hope both tax lawyers and tax accountants show up in the comments as this is important and complicated stuff.
When you think about the various ways you can make money, two ways predominate. You can provide services to others and get paid for those services. That is ordinary income. And you can invest in something; shares of stock, a building, a domain, and then sell it later for more. That is a capital gain.
The distinction is important, at least in the US, because these two kinds of income are taxed differently. Ordinary income is taxed at the full federal, state, and local tax rates. We live in NYC and according to our accountants, we pay a marginal fully loaded tax rate of 47.62%. That means we keep about half of the ordinary income [my wife] and I generate. More…
Money Quote on Entrepreneurs
Fred Wilson [investor, venture capitalist, blogger]"Entrepreneurs don’t need degrees like lawyers and doctors do. They are credentialed by virtue of their track record."