CT Real Estate Today - March 2021 Edition by CT Real Estate Today

March Madness! Many proposed Bills impacting housing are leaving both tenants and landlords worried!

Calendar View contains upcoming information on proposed housing bills. March Edition

The EPA is hosting two free interactive webinars on lead! Find out more on page 5!

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FEATURED ARTICLES Page: News & Views From The Capitol: The Housing Committee held a Public Hearing Agenda on Thursday, March 4th. Are you aware of what bills were up for debate?

Realtor Report - Booming Real Estate Market Drained Connecticut’s Inventory in 2020, Increased Prices: A dwindling inventory of available housing is driving prices through the roof and appears to be staying hot into 2021.

Insurance Insights - Tips For Controlling Your Insurance Costs: Having insurance is a must but it can get expensive fast! Here are some tips on controlling your insurance costs without sacrificing how much your policy covers.

Property Management Tools, Tips & Techniques - 5 Ways To Keep Your Best Tenants From Leaving: Every minute that your unit sits empty costs you money. Here are some helpful tips on keeping your best tenants from moving on to a new rental property.

Page: Financially Speaking - 4 Things Landlords Should Know To Save Big During Tax Season: Deducting the cost of personal and real property used in rental activities is a great deal for landlords. It’s crucial you understand how to calculate and take these deductions. Find out more in this article!

Vendor Spotlight - Farm River Property Management: Matthew Hughes is the broker/owner of Farm River Property Management LLC. Matthew works with landlords and property owners to create value in today’s competitive real estate market.

Get Energy Efficient - Eversource Gas Delivery Rate Change: Eversource customers are going to be seeing a change in their delivery rate starting March 1. Check out this article to learn more about what to expect with the increased cost.

The Legal Corner - Legal Tips For First Time Landlords: Becoming a first time landlord can be a lot of work, but it can also be a very lucrative business with a bit of luck and proper planning. Here are some tips for first time landlords to make things a bit easier on themselves.

Publisher’s Message “ Helping Property Owners Since 1994” - Bob De Cosmo, President

Bob DeCosmo began purchasing and managing rental real estate in 1982 and is a strong advocate for private property ownership right's in Connecticut.

Published by CTPOA Our goals; Educate our members on “Best Practices” for maximum efficiency. Increase profitability by lowering operating expenses via vendor discounts. Provide access to “Core Services” needed to better manage and maintain properties.

Our Team: Carmine DeCosmo Melissa DeCosmo Paul Jenney

There is a lot of very scary proposed legislation coming up in the Housing Committee th is year. We need to keep our eyes on these Bills so we can review and oppose the ones that are going to negatively effect housing in our state. A lot is at stake here. Tenant advocates have outworked, out-fund ed and out-maneuvered landlords along every step of the way since Covid has h it. We need to present a united front now more than ever to protect our business interests. Many of these Bills WILL have dramatic consequences on you, your tenants, and your staff if they are signed into law. Together we can make a difference! I hope you are all staying safe!

CTPOA Presid ent Bob DeCosmo

Thursday, March 11, 2021 2:00-2:30 PM EST Click Here to Register Thursday, March 25, 2021 10:00-10:30 AM EST Click Here to Register

The Bills from the second Housing Committee Public Hearing Agenda from March 4th, 2021

Please look through the Bills that are being considered. Committee will decide which bills move forward on March 16th. I. BILLS FOR REVIEW 1. S.B. No. 48 (COMM) AN ACT CONCERNING ADDITIONAL HOUSING PROTECTIONS FOR VICTIMS OF FAMILY VIOLENCE OR SEXUAL ASSAULT. (HSG) 2. S.B. No. 49 (COMM) AN ACT INCREASING OPPORTUNITIES FOR WORKFORCE HOUSING DEVELOPMENT IN THE STATE. (HSG) 3. S.B. No. 87 (COMM) AN ACT CONCERNING CERTAIN PROTECTIONS FOR GROUP AND FAMILY CHILD CARE HOMES. (HSG) 4. S.B. No. 194 (COMM) AN ACT ESTABLISHING A RIGHT TO HOUSING. (HSG)

5. S.B. No. 355 (COMM) AN ACT CONCERNING A LANDLORD'S ABILITY TO CONSIDER THE CRIMINAL RECORD OF PROSPECTIVE TENANTS. (HSG) 6. S.B. No. 356 (COMM) AN ACT ESTABLISHING AN ENERGY EFFICIENCY RETROFIT GRANT PROGRAM FOR AFFORDABLE HOUSING. (HSG) 7. S.B. No. 874 (RAISED) AN ACT CONCERNING THE PERMITTING AND SAFETY OF RENTAL UNITS. (HSG)

8. S.B. No. 875 (RAISED) AN ACT CONCERNING THE RISK OF HOMELESSNESS FOR THOSE RELEASED FROM THE CUSTODY OF THE DEPARTMENT OF CORRECTION. (HSG) 9. S.B. No. 876 (RAISED) AN ACT CONCERNING BONDS OF BOARD MEMBERS AND OTHER EMPLOYEES OF THE CONNECTICUT HOUSING FINANCE AUTHORITY. (HSG) 10. S.B. No. 877 (RAISED) AN ACT CONCERNING TRANSPARENCY OF RENTAL RATES FOR TENANTS RECEIVING RENTAL ASSISTANCE. (HSG) 11. S.B. No. 880 (RAISED) AN ACT CONCERNING PAYMENTS IN LIEU OF TAXES TO MUNICIPALITIES FOR HOUSING AUTHORITIES. (HSG) 12. S.B. No. 935 (RAISED) AN ACT CONCERNING HOUSING. (HSG) 13. S.B. No. 944 (RAISED) AN ACT CONCERNING STORAGE OF A TENANT'S POSSESSIONS AND USE AND OCCUPANCY PAYMENTS. (HSG) 14. H.B. No. 6521 (RAISED) AN ACT CONCERNING CHANGES TO ZONING AND AFFORDABLE HOUSING REQUIREMENTS CONCERNING ACCESSORY DWELLING UNITS AND PROHIBITING LIST-BACK AGREEMENTS. (HSG) 15. H.B. No. 6528 (RAISED) AN ACT CONCERNING THE SEALING OF EVICTION RECORDS. (HSG) 16. H.B. No. 6529 (RAISED) AN ACT CONCERNING HOUSING AUTHORITIES AND ESTABLISHING AN OFFICE OF THE HOUSING ADVOCATE. (HSG) 17. H.B. No. 6530 (RAISED) AN ACT CONCERNING THE DEPARTMENT OF HOUSING. (HSG) 18. H.B. No. 6531 (RAISED) AN ACT CONCERNING THE RIGHT TO COUNSEL IN EVICTION PROCEEDINGS. (HSG) 19. H.B. No. 6532 (RAISED) AN ACT APPROPRIATING STATE FUNDS FOR MENTAL HEALTH SERVICES AND HOUSING. (HSG) 20. H.B. No. 6533 (RAISED) AN ACT REQUIRING A STUDY OF METHODS TO PROVIDE HOUSING ASSISTANCE DURING THE COVID-19 PANDEMIC. (HSG) 7

Booming Real Estate Market Drained Connecticut’s Inventory in 2020, Increased Prices By: Will Herring from ctnewsjunkie.com A rise in real estate activity across the state in 2020 led to increased demand for homes in Connecticut’s largest markets and steep price increases, according to industry experts.

She said the county saw 1,815 single family homes, condos, and multi-family properties sold in Aug. 2020, versus 1,301 in 2019. Hartford County saw a 17.52% increase in the same period.

Diane McAdams, president of the Greater Hartford Association of Realtors, says that a dwindling inventory of available housing is creating high demand, coming from a mixture of anxiety and people seeking larger homes in the face of the COVID19 pandemic. She also said that an influx of out-of-state buyers, combined with their changing preferences, has homes in Connecticut spending considerably less time on the market.

Britt Miglietta, a Realtor with Berkshire Hathaway in Glastonbury, says the pandemic has lowered inventory to the point that homes that normally would not sell are selling. Miglietta says a combination of low interest rates and buyers’ willingness to pay more for a finished home has shifted inventory to unusual lows. The Greater Hartford Association of Realtors reported the number of single-family homes available in Sept. 2020 has decreased 56% in one year.

Fairfield County saw a 39.5% increase in the number of homes sold in the month of Aug. 2020 over Aug. 2019, according to Vikktoria Cooper, president of the Stamford Board of Realtors.

This upward trend in sales has been reflected in the change of price. According to the Greater Hartford Association of Realtors, the median sales price of a single-family home in the Hartford area has increased by

14.17%, from $254,000 to $290,000. The coronavirus has been driving residents out of urban areas, with many moving to suburban towns. Residents of New York City have seen Connecticut as a convenient escape from the crowded metropolitan area. According to a WFSB report in July, US Postal Service data says that over 10,000 New Yorkers changed their addresses to Connecticut from March through June. This compares to just 1,200 over the same period in 2019. This happened as businesses transitioned to a style of remote work that makes rural parts of the state more attractive to buyers. According to McAdams, as the demand in rural Connecticut rises and buyers look for more space, prices in those areas will rise as well.

The use of personal protective equipment, virtual tours, and limited open houses has meant a change in the approach to bringing prospective buyers to homes.

Meanwhile, the pandemic has reshaped how buyers approach a As the pandemic has changed over the purchase as well. last several months, buyers’ preferences have also appeared to “In terms of sale, this is a terrific change. Individuals are looking for opportunity to make sure buyers are a extra space in their homes for work and real buyer,” Cooper said, adding that school. Larger yards with swimming sellers have more confidence that the pools are popular, benefitting the real buyers viewing their homes have done estate markets in rural parts of their research into the house before Connecticut. McAdams says that the scheduling a tour. need for more space has increased activity in this part of the market, and The market appears to be staying hot that we are likely seeing prices rise as in 2021, as the Greater Hartford a reflection of that trend. Association of Realtors reported last week that December’s closed sales of Realtors and sellers also have had to single-family homes in greater Hartford take new precautionary measures to had increased by more than 50% over protect themselves and their clients. December 2019.

Tips For Controlling Your Insurance Costs By: Julie Prewitt from nreig.com Following the trends of 2017 and 2018 (which saw five of the 15 costliest catastrophes in history), 2019 continued to see property and liability rates rise, and more stringent underwriting requirements. Some insurers’ once strong appetites for risk in the habitational insurance market are waning. Investors with properties in catastrophe-prone areas are likely to continue to feel this rate pressure into 2020, particularly those in areas susceptible to windstorms, flooding, and fire.

So, how do you control your insurance costs without jeopardizing coverage? If you find yourself experiencing increases in your property rates, or are just looking for ways to maximize ROI of your property portfolio, consider some of the following ways to control your insurance costs:

Shop your rates with multiple carriers.

may have a very different approach to the risk in question consider your property. Carefully review the differences between the cost options presented to you, as cheaper is not always better. Know what is and is not covered, and what you are giving up for a lower rate. Never jeopardize coverage and peace of mind to save a few bucks. Be sure you know what type of loss settlement method you will be subject to in the event of a loss – Replacement Cost or Actual Cash Value. Replacement Cost can be a 20-25% higher rate but provides you the opportunity to recover depreciation. Consider your plan for the property in the event of a total loss. If you would choose not to rebuild, you would be overpaying with Replacement Cost coverage. Just be sure you are adhering to any requirements from your lending institution.

Consider a higher deductible. Have you ever considered your deductible to be self-insurance? That’s exactly what it is, and the more you self-insure, the lower your insurance rate. Increasing your property deductible from $1,000 to $5,000 could save you as much as 25%.

Work with an independent agent who is contracted with several carriers and programs AND understands your unique needs as an For a good gauge on the deductible you may be investor. This means several different carriers that comfortable with, consider the minimum claim you

would turn in, then double it. Look also at opportunities to increase the deductible on certain perils, such as Wind/Hail or Water Damage, especially if you have past claims for these types of losses.

Where not to cut corners

loss.

What other coverage you should consider.

While property damage represents more controllable or “known” expenses, do not skimp on Liability coverage, where potential losses are unknown. Carry as much as you can afford with a minimum of Carefully consider what claims you file. A property $1,000,000 per occurrence and $2,000,000 claim (regardless of size) can increase your premium for as much as five years following a loss. aggregate annually. Lower limits save little money You may pay more in increased premiums over time and can leave you and your business dangerously exposed in the event of a serious liability suit. than just paying out-of-pocket for a $500 or $1,000 loss. If your policy has co-insurance, don’t be tempted to insure your property to a lower value to save on Save on insurance costs by making insurance costs. This can come back to bite you in a loss. your property more resistant to a

By properly managing your investment properties you may be able to avoid preventable losses and demonstrate to your insurer that you are serious about risk management. Many carriers will provide credits on their rates for working hardwired smoke detectors, central station burglar alarms and sprinkler systems. Install Carbon Monoxide detectors and fire extinguishers. Upgrade old electrical systems, furnace and HVACs. Be sure that you or your property manager are regularly visiting the property to perform routine inspections and maintenance. Provide your agent with as much ammunition as you can to assist in reducing costs.

Require all tenants to carry renters insurance. Many rental property owners have a clause in their lease requiring the tenant to carry renters insurance. This is a plus for your tenant, but also helps you save money in the long run. Tenants do negligent things. Having a renters policy in force means the insurance company representing the negligent party pays for a tenant-caused loss. This will assist in stabilizing your property rates long-term.

Cyber crimes like social engineering, hacking and wire fraud increasingly target small and mid-size businesses. Landlords, property managers, and lenders are exposed to cyber risk every time you send or receive an email, collect rent online, use an online tenant screening tool, and nearly any digital activity. Cyber insurance can provide coverage for the cost to respond and recover from a data breach, including business interruption.

Following the 9/11 attacks, insurers increasingly began excluding acts of terrorism from a standard commercial insurance policy. Many are now offering this coverage as a standalone policy, primarily for property damage and business interruption. If you own a large number of properties in a concentrated geographic area, Terrorism coverage may be a consideration for you. Depending on the location of your rental properties, consider additional endorsements for excluded natural disasters. Flooding is the number one natural disaster risk in the United States; and the risk is increasing. Earthquakes and sinkholes are also excluded perils you may consider a separate policy for, though not always available in all states.

By: Andrea Collatz from mysmartmove.com

According to the National Center for Housing Management, 54% of apartments turn over every year. Each tenant turnover comes with expenses that range from cleaning costs to possible repairs. Lost rent (especially significant when you rely on rental income to pay the mortgage), utilities, and advertising fees can all add up the longer the unit is vacant. Every minute that your unit sits empty it’s costing you money, and the expenses can run up to thousands of dollars. 12

Tenant turnover will cost you time, effort, and money. Reducing or eliminating your turnover expenses by keeping good tenants longer can help you to be a more profitable landlord. There are many advantages to keeping tenants longer: Avoiding or reducing unit turnover expenses • Having consistent rental income • Spending less time and effort preparing the unit for rent (cleaning, property showings, advertising, etc.) • Avoiding the uncertainty of a new tenant •

How to Keep Tenants Longer Considering the monetary and other benefits to keeping a tenant in your unit for as long as possible, it's well worth it to find ways to increase the appeal for your tenant stay put. In many cases, the incentives you offer your tenant potentially will cost much less than the expense to carry a vacant unit. Even better, not all motivating factors will cost you money. Here are five primary ways to keep tenants longer:

1. STAY ON TOP OF MAINTENANCE. Keep your tenant happy by being proactive with property maintenance and routinely performing property inspections. Few things are more frustrating for a tenant than having unaddressed maintenance requests. Being proactive with maintenance helps keep your tenant happy (no one wants to live with a clogged sink), and shows them that you want to give them a nice place to live. This can be a big deciding factor when your tenant is considering a renewal. Incentives like carpet cleaning or a deep cleaning by a maid service could be very attractive to long-term renters and make them feel appreciated, without breaking the bank. Additionally, keeping up with maintenance and addressing issues quickly will help you spend less time on repairs when you do have to turn over the unit. Regularly inspecting the unit's condition will help you stay on top of maintenance items that need to be addressed (that the tenant may not have noticed) and can help keep smaller maintenance tasks from turning into larger issues. 13

2. BE A GOOD LANDLORD You shouldn’t underestimate the importance of the human factor when it comes to tenants. Your renters will be more likely to want to stay if you’re a good landlord. Be timely with your responses and make it easy for the tenant to contact you. Maintain open communication to reduce misunderstandings and create a better overall tenant-landlord relationship. Being courteous and respectful goes a long way to make a tenant feel comfortable in the unit. For example, if you have to make repairs on the unit, consider having workers come while your tenants are at work so that you don’t disturb their peace and quiet. After all, the more a place feels like home, the longer a good tenant is likely to stay. A cooperative attitude also sets the expectation of how you want to be treated in return, which makes it more likely that your tenants will respect you and your property.

If you make certain promises, be sure to keep your end of the bargain. Did you promise a new appliance when they moved in? It’s important to keep your word. Breaking a tenant's trust may have them looking for another place.

3. KNOW WHAT TENANTS WANT MOST It’s important to know what factors tenants look for in a rental property so you can cater to their needs. 14

For many tenants, especially younger Americans, lifestyle quality is a major factor in whether they decide to stay or go. You may own the property, but the tenant should be able to consider it their home. There are ways you can promote this atmosphere, and in doing so, encourage your tenants to stay longer. Offering features that tenants care about most will help you attract better long-term tenants and serve as an incentive for them to renew their lease. Strategic upgrades like stainless steel appliances, hardwood flooring, and central air conditioning are features that can make a house feel like home. These upgrades can potentially be good investments if you want to encourage tenants to stay longer.

You may also want to consider renovations in the kitchen and bathroom, which are especially appealing to tenants. Even simple upgrades like a new kitchen backsplash or updated cabinet hardware can make a big impact. While there is an upfront cost to new appliances and renovations, it may be worthwhile when you consider the high expense of tenant turnover.

4. BE PROACTIVE WITH RENEWALS Reach out to your tenant 90 days before the lease is up to ask them if they want to renew. Even if you don't get a response right away, it might get them thinking about their plans early so they can give you more notice. That way, you can get a jump on advertising before the tenant moves out and perhaps have someone lined up to take their place without losing even a month of rent. Offer a rent increase that is less than your usual jump (or even no increase) for the upcoming year if they renew for another year. If they seem hesitant about renewing, then ask them what it would take to get them to stay. 15

This is another reason to have a good landlord-tenant relationship. The better your communication with a tenant, the more likely they are to open up and tell you what incentives are most meaningful to them. They may request some home maintenance upgrades or a break on rent. See if you can negotiate a deal that makes sense for both of you. You may find that fulfilling a tenant's request may turn out to be less of an expense for you than turning over the unit and a taking a risk on a new tenant.

5. ENCOURAGE A LONGER LEASE Consider asking the tenant to sign a longer term lease at a reduced rate. If they renew every six months, extend the lease to a year. If they renew yearly, consider extending the lease to two years at a reduced rate. While this method could mean you lose out on the profit from rent increases, it could be worth it to keep a reliable, rent-paying tenant longer. Make sure you properly crunch your numbers so you know what option is best for you.

Conclusion Retaining reliable, rent-paying tenants is good for your rental business. By encouraging good tenants to renew their leases, you'll avoid the costs associated with vacancy and have the peace of mind that comes with keeping tenants who you already know will pay their rent on time and will respect your property.

4 Things Landlords Should Know to landlord. Save Big During Tax Season By Andrea Collatz from mysmartmove.com

Tax season is upon us, and if you own rental real estate, then you may have a federal tax responsibility to report all rental income on your tax return. The IRS defines rental income as “any payment you receive for the use or occupation of property”, and may include:

It’s been an eventful year for landlords, to say the least. With eviction moratoriums and other monetary fallout from the global pandemic, it’s important to find ways to save on your taxes and take advantage of deductions.

1. Top Tax Deductions for Landlords

Don’t pay more taxes on your rental income than you need to. Landlords can claim a variety of IRS deductions on • Normal rent payments their taxes. NOLO’s article “Top Ten Tax • Advance rent payments Deductions for Landlords” goes through essential deductions you should keep in • Security deposits • Tenant payment for canceling a lease mind when filing taxes. • Tenant-paid expenses • Property or services received, instead of money, as rent Tax time can be confusing for the firsttime and seasoned landlords alike, as there are several requirements you must meet when filing taxes as a

Let’s take a closer look at three of these deductions Depreciation for Rental Real-estate Property You may be able to recoup some of the cost of your real estate investment through depreciation. Landlords are allowed to deduct a portion of the total cost of their property over several years. Learn more about deducting long-term assets here. •

Insurance Did you know that you can deduct the premiums paid for many types of insurance you’ve purchased for your rental property? From flood insurance to landlord liability insurance, landlords generally are allowed to deduct some of the costs of insurance coverage. •

Repairs As a landlord, caused by both. Fortunately, the costs of rental property repairs can be deductible for the year in which they are completed. •

It’s important to note that the repairs must be ordinary, necessary, and reasonable in amount. A few examples of applicable repairs include:

• • •

Repainting your rental property Replacing broken windows Repairing gutters

These are just a few of the deductions you can claim for your rental business. Take a look at this post in full and note any deductions you may be missing.

2. COVID Resources It’s been a tumultuous year for landlords and tenants alike. Rental property owners have been challenged to shift their landlord practices in the age of social distancing. From transitioning to virtual property showings to wading through moratorium regulations, there’s been plenty to keep track of in the past year. Fortunately, there are key resources that can help you make the most of your tax return and determine what kind of aid may be available to property owners. The latest COVID-19 relief package offers $25 billion for rental assistance, allowing landlords to apply for funds on behalf of their tenants. Benefits.gov provides a key list of helpful resources for landlords in the wake of COVID-19. Their resources page includes helpful webinars, editorial articles, forms, and news sources regarding the hurdles landlords have faced in 2020 and the start of 2021.

3. Records Landlords Need During Tax Season As a landlord, it’s important to keep accurate records—especially if you plan to claim any of the deductions discussed above.

Maintaining organized records can help to ease the stress of tax season. If your rental documents are organized, then you can more easily find receipts, track any deductible expenses, and prepare your tax returns. TheBalanceSMB.com gives a great rundown on landlord recordkeeping.

reports required for the property • Any type of permit you have taken out on the property • Any records that pertain to your business entity • Insurance policies • Loan documents • Tax records from the past years • Real estate investment papers, including property titles or deeds

Keep the following records organized:

Landlords also need to consider their short-term records. These are documents related to income or expenses from the given tax year.

All tenant leases or rental agreements, for all your properties • All legal documents, including any court appearances, fines, or inspection •

These may include:

4. What Landlords Should Know About the Tax Cuts and Jobs Act

Rental property advertising and listing costs • Mortgage interest • Rental business credit cards • Legal or professional fees for lawyers, etc. • Receipts for repairs • Receipts for rent payments • If applicable, receipts for utility costs

The Tax Cuts and Jobs Act (TCJA) implemented key changes, some of which affect rental property owners. Fortunately, many of these changes work in a landlord’s favor. NOLO broke down some of the ways this law affects landlords. Here are some of the most noteworthy changes:

•

There’s plenty to keep track of, but it may be worth the effort. Having these important documents on-hand could help reduce stress and streamline your tax filing process. to learn more tips on landlord record-keeping.

Change #1: Individual Tax Rates Are Lower Many residential landlords are likely required to pay income tax on their rental profits at their individual tax rates. Before the Tax Cuts and Jobs Act, tax rates were as follows:

The TCJA reduces these individual rates. As of 2021, the individual tax rates are as follows: Key Takeaway: Landlords might benefit from lower income tax rates.

Change #2: There’s a New Pass-Through Tax Deduction Prior to TCJA, if you received net taxable income from one of the following pass-through business entities, that net income was taxed at your personal tax rates. • • • • •

Following TCJA, you might be able to take advantage of a new pass-through tax deduction, depending on your overall income level. If your rental activity qualifies as a business for tax Sole Proprietorship purposes, you may be able to deduct up LLC treated as a Sole Proprietorship to 20% of your net rental income. Partnership LLC treated as a Partnership Key takeaway: Landlords that qualify S Corporation for this deduction could see their tax burden eased.

Change #3: Section 179 Expensing Limit Has Increased Section 179 allows rental business owners to deduct the cost of personal property used in their rental business, such as appliances, laundry equipment, or furniture.

Rental Property Owned Individually If you own the rental property by yourself: You can file IRS Schedule E, Supplemental Income and Loss, to report your rental income and expenses. •

If you own the rental property with a co-owner: Each co-owner should report his or her share of income and deductions from the rental property on his or her own tax return, using Schedule E. If you have a partner, each owner’s share should be based on ownership interest (which you can find Key takeaway: Before TCJA, rental listed on the property deed). property owners couldn’t deduct the Rental Property Owned through a cost of personal property used in Business Entity residential rental units. Following 2018, If you own your property through a this restriction is no longer in effect. business entity, then you should report To learn more about how TCJA might your income and deductions from the affect your taxes as a landlord this year. property using IRS Form 8825, Rental Real Estate Income and Expenses of a How to File Your Taxes Based on Partnership or an S Corporation. Ownership Status Depending on the type of business entity, there are additional filing How you file your taxes depends on requirements. how you own your rental property. The article “Filing Your Taxes When You’re a Landlord” from NOLO explains how landlords should file their taxes based on rental property ownership: TCJA expanded and increased this expensing level from $500,000 to $1,000,000. This is applicable for property purchased and placed into rental service from September 27, 2017 through December 31, 2022.

•

Farm River Property Management By: Matthew Hughes

Are you licensed? In the state of Connecticut a property manager, working on behalf of a third party, must be a licensed real estate broker. At Farm River Property Management, Matt Hughes, is a licensed real estate broker with years of experience. He is also a member of various trade organizations. Utilizing a licensed real estate broker is one of the safest approaches to operating a property. We have seen eviction suits prolonged because the tenant raised the point that the landlord was utilizing an unlicensed individual to manage the property and collect rents. This is a classic example of a budget minded landlord cutting corners and actually costing more money. Checking the license status is as simple as looking on the state of Connecticut website. Also it’s important to realize that certain types of property — condos for example— require further licensing

How many properties are you currently managing and what type? At Farm River Property Management we have extensive experience in the residential leasing market. We have managed single family properties all the way up to apartment complexes. We have worked with in state landlords and out of country landlords. We also have experience with commercial and mixed use properties through out the New Haven area. Each property has its own challenges and we have the know how and infrastructure to manage them. Knowledge of the different types of challenges that each property presents is crucial to success.

What is your fee structure? This is a big one. Most management companies charge a percent of the monthly income in addition to other fees such as leasing and maintenance. At Farm River Property Management we provide customizable services and our fee structure is transparent and part of the written contract between landlord and management. We are not the cheapest option and we have no intention on being the budget provider. . In our experience, from soliciting bids for work on properties that we manage, the budget provider usually costs more in the long run. Many of our clients have come to us looking for prompt and responsive service, after having experienced the inherent issues with a budget provider.

What is communication like between manager and landlord? At Farm River Property Management we have a simple policy: If the landlord doesn’t hear back from us by the end of the day during which they called, then lunch is on Farm River Property Management. We believe that responsiveness is a core value in our business.

How is the financial reporting handled? At Farm River Property Management we provide computerized reporting customized to our clients needs. Our bookkeeper, Kathy, is always available to go over the reporting and answer any detailed questions you may have. We provide monthly and year end statements to all of our clients. At Farm River Property Management, our primary goal is to create value for our clients, and this makes it paramount that financial records are provided often and easy to access. Also making our team available to answer any questions is vitality important and a service that we freely provide.

How are tenants screened? The most important factor to landlord success is to have good tenants. We utilize extensive screening that utilizes credit, criminal, background, income verification and reference verification. At Farm River Property Management we believe that trading a vacant property for a bad tenant, doesn’t solve a problem it merely creates a new one. There is no excuse for not vetting tenants as Connecticut has an elaborate eviction process.

How is maintenance handled? We have a 24/7 call center dedicated to the tenant experience. Emergency issues are handled promptly and other issues are handled as soon as mutually convenient. We have long term relationships with vendors throughout the greater New Haven area and beyond, and make sure that all of our vendors pass rigorous screening. Making sure that a tenant is safe and comfortable in their unit is key to long term success as it cuts down on vacancy, leasing, and turn over costs — improving the tenant experience is key to Improving the landlord’s bottom line.

Do you have references? Any manager in the business should be able to provide references from past clients. They should also have sturdy relationships with vendors, realtors, and attorneys. At Farm River Property Management we have a page on our website that is dedicated to our outstanding testimonials from long term clients.

Cancellation policy? Each company has different approaches to their contract. Some companies may insist on a one year commitment, while others may allow a month to month commitment. It is important to read and fully understand the term and the renewal periods under the agreement. However, in the real world, things don’t always go according to plan; to accommodate this most companies have a cancellation policy. It is important to understand the cancellation policy as it may contain penalties or may require notice. At Farm River Property Management our goal is to provide long term value to all of our customers.Even though we provide a flexible cancellation clause within our contract, we have never had a client cancel the policy because of dissatisfaction with our comprehensive services.

Do you personally have real estate investments? This is not a make or break question, however it does give the client some insight into the managers experience and approach. While many people are attracted to real estate because of the passive income potential, somebody that is a manager and landlord has a better understanding of the hard work required to earn money the income. At Farm River Property Management, our broker/ owner has direct and passive real estate interests as a landlord. This has given Farm River Property Management unique and relevant experience in the industry — while we understand that owning a property is full of surprises, the long term ownership benefits create ample opportunities.

Matthew Hughes is the broker/ owner of Farm River Property Management LLC. Matthew works with landlords and property owners to create value in today’s competitive real estate market. His business provides full services property management, brokerage and leasing services He has personally marketed over 160 properties in Greater New Haven area. His website is www.frpmllc.com.

In 2018, the Connecticut Public Utilities Regulatory Authority (PURA) approved our application to increase natural gas delivery rates over a three-year period. We submitted this request so we could continue our work replacing aging castiron and bare-steel natural gas pipes. In accordance with that request, Eversource’s natural gas delivery rate was set to be effective Jan. 1, 2021, however Eversource requested that the rate adjustment be delayed to March 1, 2021. This delay was to help alleviate bill increases for customers during the primary winter heating months. Customers will start seeing this increase on their March natural gas bills. Overall, the total average annual bill increase associated with this rate change, by customer class, including System Expansion (SE) customers, are as follows:

Residential Customers: Rate 1 (Residential Non-Heating) = 3.45% Rate 2 (Residential Heating) = 2.30% Rate 3 (Residential Multi-Dwelling) = 1.67%

Business Customers: Rate 10 (Small C&I) = 2.18% Rate 20 (Medium C&I) = 1.84% Rate 30 (Large C&I) = 1.58% 28

What you need to know 1. Your total bill costs depend on your energy usage, rate category and weather conditions. 2. The average residential Rate 2 heating customer using 100 Ccf in March, will experience a $4.61 increase due solely to the rate change which equates to 2.8% on a total bill basis. 3. Customers may experience smaller or larger bill changes, month to month, based on variables such as individual dwelling size, age of structure and number of people and gas appliances in the household.

Ways to lower your bills and programs to help 1. Take advantage of energy-saving tips, rebates on energy-saving products, and sign up for a no-cost Home Energy Assessment at Eversource.com. 2. Call us at 800-438-2278. You may be eligible for a payment plan of up to 24 months or special programs that help customers reduce their past due balance. Being on a payment plan will prevent disconnection. 3. For more information on the components of you bill and how it is calculated, visit the Understanding My Gas Bill Section on Eversource.com. We know any rate increase is difficult especially when people are using more energy working and studying from home. We’re always here to help.

Legal Tips for First Time Landlords From: rocketlawyer.com Becoming a first time landlord can be a lot of work, but there’s also the promise of a lucrative business (and regular rent checks). When you’re first starting out, beyond the basics of getting the property purchased and ready to rent out, remember that setting yourself up for success also means having the proper legal protections in place—and being proactive with legal issues could save you from big legal bills and hassles down the road. Here are some guidelines to help protect yourself when you’re starting out as a new landlord.

Put it in writing. It seems simple, but putting everything in writing can be the smartest thing you ever do as a landlord. The most important item to put in writing is the Lease Agreement between you and the tenant. If you ever have problems with the tenant, the Lease Agreement protects you and gives you legal rights that would be more difficult to prove without documentation. It also makes it clear that both parties have agreed to specific terms that you can both reference later if there is a dispute.

Get a security deposit.

Collecting a security deposit communicates to the new tenant that you care about the condition in which the tenant keeps your property. It also gives the tenant motivation to keep the property in the

same condition in which it was first rented. If the tenant doesn’t keep the property in good condition or damages it, you may be able to keep a portion or all of the deposit to pay for repairs or additional cleaning. Make sure you have the tenant fill out a Renter’s Inspection Worksheet when the tenant first moves in to reduce disputes about the initial condition of the apartment.

Know the tenant financially. It’s your responsibility to vet your potential tenants. Start by having them complete a Rental Application, which will help you collect the information you need to screen your potential tenants. Next, take the time to verify their good credit and their employment, which will help you determine their ability to pay the rent. Keep in mind that it’s much easier to find another potential tenant than it would be to evict a tenant who can’t pay the rent. Of course, you also need to follow any laws that protect tenants against housing discrimination, but the inability to pay the rent generally can be used to disqualify a potential tenant. You may also use a Letter to Request a Credit Reference to verify the prospective tenant's good credit, and/or ask the tenant's employer for a Salary Verification Letter.

Understand key lease terms, like rent, maintenance, utilities, etc. Make sure you know and follow the terms of the lease you’ve signed. If you create a document and then flaunt the terms, your tenant could take you to small claims court and you could be found liable. You could also get in trouble with local housing authorities. In addition, if you don’t follow the lease terms (by not maintaining the property, for example), it makes it harder to enforce regulations of the lease that you do want the tenant to follow—like paying the rent on time.

Understand your rights as a landlord. Although the renter has rights, so does the landlord. For example, you should be able to enter the property when necessary for maintenance with the appropriate amount of notice given to the tenant. You also have the right to evict a tenant if they are not upholding their end of the lease. You can use an Eviction Worksheet in this case, but before you get in this situation, it’s smart to understand the legal process for evicting a tenant in your city and state, since it varies by locality.

Understand the Tenant's rights, and your obligations to protect them. Familiarize yourself with your state’s laws that protect the tenant’s rights, and any applicable city or county laws that might affect you. Consult the Hud.gov Tenant Rights resources by stateto find out more about the laws in your area. This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

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