Tax Deductible Info

The Rental Housing Alliance Oregon is a 501(c) (6) corporation. As such, we are allowed to lobby to influence legislation. A portion of the annual dues are utilized for lobbying activities on behalf of our members.

Your membership dues payments may be tax deductible as a necessary trade or business expense. The portion of your dues utilized for lobbying activities is not deductible.

Dues paid to the Rental Housing Alliance Oregon are not deductible as a charitable contribution but may be deductible as a business expense; however, the RHA Oregon estimates that 15.87% of the dues payment is not deductible as a business expense because of RHA Oregon’s lobbying activities on behalf of its members. The figure shown above represents the portion of your 2020 dues utilized for lobbying activities at both the state and local level.

Please consult with your tax advisor regarding the proper treatment of your dues for income tax purposes.

by the Editors of the Rental Housing Journal

One of the most crucial aspects in tenant screening is that of checking your prospective tenant’s landlord references. Unfortunately, some tenants have been known to make up references or list friends or family members as previous landlords. There are even companies that hire themselves out to pose as landlords. As a property manager, you are bound to receive landlord references day in and day out. Some are beautifully written testaments to the incredible nature of these individuals looking to rent, while others are simply fake, with bogus testimonials about the tenants. Here are five ways in which you can spot fake references.

No. 1- Call the references Yourself

For starters, on most landlord references, they will provide a phone number. One of the first things you can do to tell if the reference is a fake is to call the number inquiring about a rental. If it is fake, the number either won’t work or will lead to a completely different person or place. In rare instances, a fake number does lead to an individual, but they may seem to be either untruthful or not detailed in their answers.

No. 2- Check on the Name

Go online and Google the reference’s name and look them up on social-media platforms. Check to see if this person is tied to the potential tenant through tagged pictures and /or posts. If there is a lot of overlap in the peoples profiles, these individuals may have a personal relationship and not a tenant landlord relationship.

No.3-Look at Tax Records

The tax records for all property owners are in the public domain. All you have to do is look up the records for the address where the applicant claims to have lived. The name on the tax record should match the name you’ve been given. Double-check that the property hasn’t been sold, but otherwise, this is a great way to spot a fake.

No. 4-Analyze a Reference’s Answers

It’s best to always fall back on your knowledge as a landlord and analyze the answers that the potentially fake landlord reference has given you. If their answers are vague and don’t have details, then it’s likely that they aren’t a real landlord and are instead a friend or family member of the person who is trying to rent from you.

No.5-Ask for Advice

Landlords tend to have the same frustrations, interest and problems. It wouldn’t be at all unusual for you, as a property manager, to ask for some advice from another landlord while calling for a reference. Ask for their procedure for getting rid of a tenant who doesn’t pay, for instance, A real landlord will have an actual answer, even if they’re not interested in spending much time on the phone with you. A fake, on the other hand, will likely have nothing specific to say. This can help you further determine whether the person on the other line is a real landlord or someone just posing as such.

In Conclusion

As a property manager, a significant part of your job involves filling properties with quality, long-term tenants. Including thorough reference verification as part of your screening process such as the strategies above, can help you avoid costly mistakes and keep you a few steps ahead of the game.

Permission to reprint by-The RentalHousingJournal.com is an interactive community of multifamily investors, independent rental home owners, residential property management professionals and other rental housing and real estate professionals. It is the most comprehensive source of news and information for the rental housing industry. Their website features exclusive articles and blogs on real estate investing, apartment market trends, property management best practices, landlord tenant laws, apartment marketing, maintenance and more.

Amazon Unlocks Potential CONTINUED FROM PAGE 5

do not pay out dividends or monthly income. Instead, they produce value through appreciation at the exit or sale of the investment.

Amazon as a 1031 Exchange DST Property

Through these passive investing strategies, individual investors can access high quality, institutional grade assets—which brings us back to the Amazon Effect. While these strategies are not exclusive to Amazon, they are an opportunity for investors to take advantage of the industrial bull market. One of the strategies to consider is a 1031 Exchange using a Delaware Statutory Trust to own Amazon Net Lease properties as a 1031 replacement property. This strategy offers the tax deferral benefits of a 1031 Exchange coupled with the passive management benefits of a DST and the stable income potential of Amazon industrial properties.

How a Delaware Statutory Trust Works

Since 2004, DST investments have qualified as a replacement property in a 1031 exchange. Although this exchange lets owners shift their business model from direct to fractional ownership, all of the 1031 exchange basics are the same. The seller has 45 days to identify a replacement property, in this case, one or more DSTs, once they sell an asset. The identified replacement property must adhere to one of the three allowable identification methods: the 3 property approach, 200% approach or 95% approach. The transaction must close in 180 days from the original sale of the property. Like a standard exchange, investors can defer capital gains taxes through this transaction.

There are a number of DST investments from reliable sponsors with a successful history. DST sponsors will structure the trust, which includes property inspection and due diligence, securing debt if needed and structuring the DST offering in compliance with SEC regulations. All of these costs are included in the official offering.

For Amazon-occupied properties, investors should look for industrial DST offerings. Per SEC regulations, DST sponsors cannot publicly advertise current offerings. To find an offering that fits your goals, research reputable sponsors consult a licensed 1031 Exchange Advisor.

Delaware Statutory Trust Pros & Cons

There are tremendous benefits to investing in a DST through a tax-deferred 1031 exchange. Exchanging out of direct ownership eliminates the work of daily property management. DSTs also have low minimum investments – typically $100,000 – allowing investors to diversify their exchange across multiple DST properties.

Because DST investments are typically institutional-grade assets, like an Amazon net leased property, they can potentially deliver higher monthly income and appreciation than direct ownership—depending on the asset of course.

Of course, like any investment, there is also a downside. Lack of liquidity and timing of exit are primary DST risks. DST properties are typically held for 3 to 10 years and early exits are typically not possible. While one of the benefits of a DST is hands-off management, it also means that investors do not have any voice in management decisions. For this reason, it is imperative that you choose a strong sponsor with a proven track record when investing in DST real estate. Leveraged DST properties can also pose a risk. High leverage—at 80%, for example—can significantly reduce monthly cash flow because the majority of the profits will be used to pay the debt service on the asset. Most DSTs use leverage between 50% – 58% so as to not take on undue risk. When considering a DST property, conduct thorough due diligence before investing.

Learn more about Delaware Statutory Trusts

If you are considering a Delaware Statutory Trust for your 1031 Exchange and have questions, contact Real Estate Transition Solutions to schedule a complimentary consultation with one of our licensed 1031 Exchange Advisors. Our free consultations can be done over the phone, via web meeting, or in person at our offices located in Mercer Island, WA, Portland, OR, or in San Francisco, CA. To schedule your free consultation, call 206-686-2211, email info@re-transition.com, or visit www.re-transition.com/free-1031-consultation.

Austin Bowlin, CPA is a Partner at Real Estate Transition Solutions and leads the firm’s team of 1031 Exchange Advisors & Analysts. Austin advises on tax liability, deferral strategies, legal entity structuring, co-ownership arrangements, 1031 Exchange options, and Delaware Statutory Trusts. About Real Estate Transition Solutions Navigating the Exchange process successfully can be challenging and complex. For over 20 years, Real Estate Transition Solutions has helped investment property owners navigate and execute tax-deferred 1031 Exchanges, Delaware Statutory Trusts (DSTs), complex real estate investments, and tax planning strategies. Our team of licensed 1031 Exchange Advisors will help you select and acquire Exchange properties that are carefully designed to help meet your objectives. To learn more about Real Estate Transition Solutions, visit our website at www.re-transition.com. This is for informational purposes only, does not constitute as individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potentially adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Potential cash flows/returns/ appreciation are not guaranteed and could be lower than anticipated. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk. DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney. Because investor situations and objectives vary this information is not intended to indicate suitability for any individual investor. A REIT is a security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate. There are risks associated with these types of investments and include but are not limited to the following: Typically no secondary market exists for the security listed above. Potential difficulty discerning between routine interest payments and principal repayment. Redemption price of a REIT may be worth more or less than the original price paid. Value of the shares in the trust will fluctuate with the portfolio of underlying real estate. Involves risks such as refinancing in the real estate industry, interest rates, availability of mortgage funds, operating expenses, cost of insurance, lease terminations, potential economic and regulatory changes. This is neither an offer to sell nor a solicitation or an offer to buy the securities described herein. The offering is made only by the Prospectus. Real Estate Transition Solutions offers securities through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services through Concorde Asset Management, LLC (CAM), an SEC-registered investment adviser. Real Estate Transition Solutions is independent of CIS and CAM.