I was reading through the latest issue of Personal Real Estate Investor Magazine and came across an article about companies that offer "house staging" services. This is a service for people who are selling or renting a home and want it to move quickly or for more money (and who doesn't want that?) These companies come in and redecorate the entire house or just a couple rooms in a neutral but inviting way so that potential buyers or renters will feel at home. It's also useful if your house has an odd shaped room, such as a triangular room. If such a room was empty, viewers might wonder how they could furnish it and, not having any ideas, that room could turn into a negative selling point. But if the house is staged, the viewer can see an idea of how to furnish it, easing their fears.
If your house is empty, the company will bring in furniture, paintings, window dressings, etc. If your house is furnished, they will modify your decor so that it reflects less of "you" and more of a "generic homey feeling."
The article didn't mention prices, but they claim customers get a 40% return on their investment. One person interviewed for the article said he got a 300% return. I don't think I'll do this on the house I am currently fixing up, simply because I've already put more money into it that I wanted, but I will keep this in mind for future houses. I think a service like this would help most when an investor is selling a house they fixed up, since those homes are typically empty.
Are You Collecting Sales Tax On Your Rentals?
This article in my local newspaper highlights an important issue with landlords: many are not aware they are supposed to be collecting city sales tax on their rental income. In addition to the sales tax, I discovered you also need to register the property as a rental property with the county. What happens if you don't do this? Penalties vary by city, but you could face fines of up to 25% of the value of back taxes owed, plus a fine of $1,000 for not registering the property as a rental property. Lack of manpower meant that, in the past, you could fail to do these things and manage to escape detection fairly easily. However, with the real estate boom and the large increase in the number of rental properties, cities have realized this is now a huge source of revenue they are missing out on and are starting to throw resources at it. Chandler, Arizona hired an ASU grad student to search through real estate and utility records looking for mismatches, which may indicate rental units. So far, they've collected $33,000.
When I first got my rental property, I didn't know I needed to collect tax until my CPA mentioned it. It wasn't a big deal, but it did mean I had to pay $20 a month in sales tax, plus about $50 a year for a sales tax collection license. Had I known I needed to collect tax, I would have included it in the rent I charged my tenant. Instead, I had to take a drop in my cashflow of $20 a month.
When I first got my rental property, I didn't know I needed to collect tax until my CPA mentioned it. It wasn't a big deal, but it did mean I had to pay $20 a month in sales tax, plus about $50 a year for a sales tax collection license. Had I known I needed to collect tax, I would have included it in the rent I charged my tenant. Instead, I had to take a drop in my cashflow of $20 a month.
Countertop Installer Called
I spoke with the countertop installer today and he's going to check the place out on Saturday. I asked if he would still be able to get the job done by the 15th, like the cabinet guy told me, and he says he thinks so. Apparently, it's just a one day job. He might be able to install sinks and plumbing at the bathroom vanities as well, but he's not sure. He said if he could get it done in one day, he would like to, since he likes the extra money, but he's not sure until he sees the job. So I'm going to plan on him not installing them.
Joe Returns
I got a call from Joe, the old cabinet guy today. He wanted to send me a fax. The fax at the number he currently has is out of ink and apparently, it's not accepting new faxes. He first asked me for another fax number so he could fax me some paperwork. I told him I was done dealing with him and refused to give him a number. He said ok and hung up.
About 30 seconds later, he called me back and told me the owner of the trailer wants to know where the trailer is. I told Joe I did what I told him I was going to do in my fax. Joe is claiming he was out of town and didn't get my fax until just now and he was going to fax me his plane tickets to prove it. I told him I have been telling him for at least a month that I wanted the trailer gone and I asked Joe why he hadn't hauled it away in all that time. He never answered that question. Joe said the owner was going to report the trailer stolen. I explained that, since Joe was not returning my phone calls or faxes and that the trailer had been sitting on my property for months, it was an abandoned vehicle and I had spoken with the city and they told me I could do what I wanted with it. I also told Joe I was done talking to him and hung up.
About 30 seconds later, he called me back and told me the owner of the trailer wants to know where the trailer is. I told Joe I did what I told him I was going to do in my fax. Joe is claiming he was out of town and didn't get my fax until just now and he was going to fax me his plane tickets to prove it. I told him I have been telling him for at least a month that I wanted the trailer gone and I asked Joe why he hadn't hauled it away in all that time. He never answered that question. Joe said the owner was going to report the trailer stolen. I explained that, since Joe was not returning my phone calls or faxes and that the trailer had been sitting on my property for months, it was an abandoned vehicle and I had spoken with the city and they told me I could do what I wanted with it. I also told Joe I was done talking to him and hung up.
Trailer Gone And New Cabinets Moving Forward
I got a call from the new cabinet guy last night. He's faxed his drawing to the countertop guy who will need to visit the house and make a template. He (Countertop Guy) thinks he can get this done by the 15th, so that's pretty good - only two weeks, and one of those days is a holiday. Cabinet Guy thinks he can be done by then as well - good when you consider he's leaving on a 1 week vacation today. I don't have a quote yet, but I'm told it will be fair. Countertop Guy will be calling me to get instructions on entering the house sometime soon so he can make his template.
I also swung by the place yesterday and confirmed the trailer was taken away, along with the trash on it. Yay! The property looks better already!
Relating to the trailer - I had about 100 responses to the offer I posted on craigslist come in within an hour. I responded to the first 10, telling them I was offering it to people in the order their responses were received. I gave each person 24 hours to go check out the trailer and haul it away. The first responder didn't get to it in time, so I offered it to the second, who took it. Once I confirmed it was taken, I then spent about 1.5 hours emailing all 90+ people telling them the trailer was no longer available. This was about 48 hours after I posted the offer. I got many responses back from people thanking me for following up but one idiot actually complained that I didn't respond fast enough to suit him! He accused me of leaving him hanging, proceeded to call me names, and said I probably didn't go in order, but sold the trailer to whoever offered me money for it. He said he responded within minutes of my ad going up and apparently he couldn't comprehend that he wasn't fast enough. (He was the 53rd responder.) And no one offered me money for the trailer. Anyway, I'm just appalled that some people can get so snotty when someone offers them something for free!
I also swung by the place yesterday and confirmed the trailer was taken away, along with the trash on it. Yay! The property looks better already!
Relating to the trailer - I had about 100 responses to the offer I posted on craigslist come in within an hour. I responded to the first 10, telling them I was offering it to people in the order their responses were received. I gave each person 24 hours to go check out the trailer and haul it away. The first responder didn't get to it in time, so I offered it to the second, who took it. Once I confirmed it was taken, I then spent about 1.5 hours emailing all 90+ people telling them the trailer was no longer available. This was about 48 hours after I posted the offer. I got many responses back from people thanking me for following up but one idiot actually complained that I didn't respond fast enough to suit him! He accused me of leaving him hanging, proceeded to call me names, and said I probably didn't go in order, but sold the trailer to whoever offered me money for it. He said he responded within minutes of my ad going up and apparently he couldn't comprehend that he wasn't fast enough. (He was the 53rd responder.) And no one offered me money for the trailer. Anyway, I'm just appalled that some people can get so snotty when someone offers them something for free!
