As a property manager, our ultimate goal is to make investment property ownership a stress-free and profitable experience for the property owners we work with. There are many ways we do that and we are constantly striving to find new ways to meet the needs of our property owners.
One of the many services we offer are video inspections. This includes a recorded walk through of the apartment prior to a new tenant moving in as well as a recorded work through of the apartment when the tenant moves out. Video inspections are also provided when large repairs or improvements are being recommended.
We have found the use of video inspections to be beneficial for both us and the property owners we work with. When a property owner decides to work with a property manager, there is a certain level of trust that has to grow in order for that relationship to work.
For example, when a manager contacts the owner to let them know about repairs needed to the property that will cost the owner money, the owner has two options:
One thing we do to eliminate the potential for an awkward situation and to build that trust with the owners is to conduct video inspections. This is effective in several ways. You can see a lot more detail in a video that you can in photo, and it allows us to zoom in on areas of damage while still providing perspective on where the damage is within the property.
A video can also provide a better overall view of the property. This can be especially helpful when comparing the condition of the property when a tenant moves in compared to the condition of the property when the tenant moves out.
Limitations of video inspections
Video inspections can be limited in that it creates a sometimes long process; particularly if you have to look through an entire video just to find one area of damage. However, we mitigate that limitation by using the video inspections in conjunction with a written inspection report.
For example, if a property has exterior damage that needs to be addressed, we can provide a written report detailing the damage, repairs needed, and expected cost along with a video of the damaged area. In this respect, the video will enhance the information provided in the written report.
Interior video inspections while a tenant is living there are sometimes difficult to get due to valid privacy issues for the tenant. However, this particular limitation can be addressed on a case-by-case basis.
Benefits of Video Inspections
By providing the video inspections along with inspection reports we are building trust between us and the property owner while eliminating a possible awkward situation of the property owner feeling the need to ask for verification of property damage and repair estimates.
Videos are also helpful when a case goes to court. We have found that video is significantly more effective when a tenant needs to be evicted or taken to court and there is property damage involved. Getting a video tour of the damage has a greater emotional impact than photos. The videos can also be used to show a clearer before and after condition of the property in court.
If a deposit is withheld due to damages and the former tenant argues that they deserve all or part of their deposit back, it is the property owner’s responsibility to prove the damages were legitimate and caused by the tenant. This is when before and after videos are most useful.
Video can also be used to lease properties faster and more effectively. How to leverage the power of video to promote your properties will be covered in How to Use Video to Lease Your Property Faster.
I’d like to give you some information about corporate entity strategy in order for you to be able to better protect your assets. Even if you find this information useful, remember to always consult your attorney and your certified public accountant before you make any important decisions.
Let’s begin with taxes. Here at RTS we issue 1099s as required for most of our owners based on gross income received by us, when it is received by us. Your money comes directly to us, and when it does, IRS considers that money is becoming yours at that point. So, it’s not the net income you receive after it owner pay out, it’s the gross income we receive in your name. After we receive it, you can use our statements and deduct any expenses off your taxes from that 1099.
If you have a property that is in an LLC, you have certain level of choice in regard to the way you file it. This means you can basically choose how your LLC will be looked at by the IRS. You can file you LLC as a S corporation, C corporation, or a pass-through sole proprietorship. This means that the LLC lets all income and expenses pass through directly to the owning entity, whether it’s a person or another corporation.
Usually, if you have several properties, each with their own special LLCs we recommend to take them and turn them into sole proprietorships, passing all of the income and expenses directly to the owning entity. This allows you to reduce accounting expenses, since you will be doing fewer filings and movements for these properties. This is in general terms what we’ve seen most of our clients that own several properties do (as well as myself), but there could be other advantages or disadvantages related to doing this, depending on the amount of money and context that are being taken into consideration. Either way, always check with your legal advisor and accountant in order to know what’s best for you.