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Here’s Where You Could Get a Break By Clare Trapasso May 16, 2022 A year ago, the great majority of American home buyers despaired over the state of the housing market. Prices had hit record highs. There were so few homes for sale that lines for open houses stretched for blocks, and move-in-ready places in desirable areas were receiving dozens of offers, prompting soul-crushing bidding wars. It couldn’t possibly get any worse, right? Wrong! Fast-forward a year, and there are even fewer homes for sale, prices have continued their upward trajectory, and mortgage interest rates are shooting up at a breakneck pace. The result: The real costs of homeownership—the actual payments buyers need to make each month, made up primarily by mortgage and principal costs, along with property tax and insurance—are skyrocketing. And this has severely diminished the buying power of most wannabe homeowners. Someone purchasing the same home today will spend about 1.5 times more on their mortgage bills than they would have just one year earlier. To be clear, home prices alone haven’t risen anywhere near that high. And sellers generally aren’t pocketing that much extra cash through bidding wars. What’s happening is that the higher home prices and rising rates have inflated monthly mortgage payments by about 50% in just one year. Take that increase, then add in the highest inflation rates in 40 years—pushing up the price of gas and just about everything else—and steep drops in the stock and cryptocurrency markets, and many homebuyers are hurting. It’s causing a paradigm shift. Most buyers have traditionally focused on the sticker price of a home (and how much extra they’ll have to offer to get it). But higher mortgage rates can significantly boost the amount homeowners will fork over to their lender. For example, nationally, mortgage payments are about $1,882 a month, not including property taxes or homeowners' insurance. A year ago, they were roughly $1,249. The exact amount depends on where buyers live. That’s why Realtor.com® looked at the increase in mortgage payments in the nation’s 15 largest metropolitan areas. In the Miami metro, buyers’ mortgage payments are 83% higher than they were just one year ago. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.) On the other end of the spectrum, mortgage payments in Detroit were up a still bruising but far less devastating 19%. “We’re already comparing [2022] to a year that was extremely competitive,” says George Ratiu, manager of economic research at Realtor.com. “For first-time buyers, this part is challenging. First-time buyers tend to face much bigger hurdles, from coming up with down payments to being able to qualify for mortgages, all the while still competing with all-cash buyers, investors, and existing homeowners who have more cash to bring to the table.” Oh, by the way. If you know someone who is looking to rent, sell, or buy a property, please call or email us with their information, and we’ll take good care of them!  

Trinity Team Property Management has been pleased with the rental assistance program provided by the state. We have been able to direct several of our tenants to the proper information in order for them to secure funds for monthly rent during their time of need. The Colorado Emergency Rental Assistance Program can help cover rent as far back as April 2020. COVID-19 has caused many tenants to fall behind or be unable to pay rent. Tenants who have been unable to pay rent due to financial hardship caused by COVID-19 may be eligible for rental assistance from their state or county. Help can include past due, current, and two additional months of rent up to a maximum of 15 months of assistance. The landlord or the tenant can start the application process, but receiving assistance requires documentation from both the tenant and the landlord. The Trinity Team has been proactive in reaching out to the tenants who were unaware of these programs. This has kept our tenants and their families in the property and has provided our owners with the income they rely on. Oh, by the way. If you know someone who is looking to rent, sell, or buy a property, please call or email us with their information, and we’ll take good care of them! As always, thank you for your business and continued support! [email protected]

Here are a couple of points regarding pre-paid/advance rent. We get these questions frequently, so we thought we would share why this is included in your 1099. This information derives directly from the IRS website. Advance Rent Advance rent is any amount you receive before the period that it covers. Include advance rent in your rental income in the year you receive it, regardless of the period covered or the method of accounting you use. Example. On March 18, 2020, you signed a 10-year lease to rent your property. During 2020, you received $9,600 for the first year’s rent and $9,600 as rent for the last year of the lease. You must include $19,200 in your rental income in 2020. Example #2. On December 31, 2021, your tenant pays rent for January 2022. This is advance rent and must be included in your 1099 for fiscal year 2021. Additional updates: A residential landlord (property manager) may not charge a late fee until the rent is late by at least 7 calendar days. The late fee is now capped at $50, or 5% of the amount of the past due rent payment, whichever is greater. This also means we can no longer collect daily late fees. Oh, by the way. If you know someone who is looking to rent, sell, or buy a property, please call or email us with their information, and we’ll take good care of them! As always, thank you for your business and continued support! [email protected] *Trinity Team Property Management is not a tax attorney/accountant, and we’re not offering tax advice.

Are You Looking to Expand Your Investment Portfolio to Commercial Real Estate? NOW ANNOUNCING Trinity Team’s new Investment Advisory Division and Investment Club! The Investment Advisory Division is a boutique-style, highly customized service dedicated to maximizing value for commercial real estate investors. Members of the Investment Club will be able to learn, network, and build wealth with Commercial Real Estate. The Inaugural Event will be on Saturday, February 12, 2022, from 9 am to 12 pm, and meetings will be held on the 2nd Saturday of every month. Register today! Oh, by the way. If you know someone who is looking to rent, sell, or buy a property, please call or email us with their information, and we’ll take good care of them!

There are numerous options for investing your money. Owning a rental property in addition to your primary residence can be a way for you to build wealth. You may ask yourself, “What makes real estate a money-making machine?” Let’s talk about everyone’s favorite topic first. Cash Flow Rental income is real money, and it comes in the form of monthly rent. There are, of course, several things to consider when calculating money going into your pocket. It’s not quite as simple as collecting monthly rent and depositing it into your account, unless you own the property free and clear. Here’s an example: Let's say rent is $1500. The PITI is $900. If we subtract $900 from $1500, there’s a profit of $600. Pretty good, right? A great start, but remember a landlord should be prepared to pay for vacancies and maintenance issues. A good rule of thumb is to sock away 5% for vacancy and 5% for maintenance each month. So in this case, the landlord would save $150 per month, bringing the $600 profit down to $450. Property Appreciation Appreciation is another way to make money in real estate. Real estate appreciation is the increase in the investment property’s value over time. A rental property can appreciate while at the same time creating cash flow. Investors need to hold on to the property for approximately 10 years to see significant appreciation. At that time, they have the option to sell and make a notable profit. Keep in mind that location, inventory, and mortgage rates also affect appreciation. You’re the Decision Maker Most people find being the boss an exciting benefit of owning rental property. You alone get to decide which property is a good fit for you, where and how much to spend on a rental property, how much to charge each month, who will live in your property, how to handle maintenance issues, and who will manage the property if not you! Tax Deductions When in doubt, hire a professional who knows accounting with a focus on real estate investing. Preferably, one who invests in real estate themselves. Every expense associated with rental properties is deductible. Keeping a detailed expense report is of the utmost importance, including records of interest on your mortgage, insurance, interest on credit cards used for property purchases, property taxes, maintenance, repairs, and professional fees. You may also be able to deduct travel to and from the rental property, your home office, and legal services. See Nolo.com for a comprehensive list: NOLO Tenants Will Pay Down the Mortgage With every year of owning a rental property, the tenants are paying down the amount you owe on the property. The longer you hold the property, the more of the loan principal your tenants are paying down and the more wealth you are creating for yourself. Take the standard 30-year loan. The entire 30-year loan will have an interest rate that stays the same. At the beginning of the loan, significantly more money is paid to interest than to principal, but by year 15, it is nearly a 50/50 split.  

Is It Better to Sell by Owner or a Realtor? Or maybe the better question is, is it worth doing for sale by owner? The Denver Metro is one of the hottest real estate markets in the country right now. So, with it being such a hot seller’s market, you might be asking yourself if you even need a real estate agent. Well, there is not really a straight answer to this, as there are so many different circumstances that factor into the outcome. I am writing this to help you understand what the best decision is for you based on your situation. Although selling your home by yourself without using a listing agent may seem like the perfect way to save money on commission fees, the statistics show us that most FSBO sellers will ultimately end up regretting this decision. According to the National Association of Realtors (NAR), FSBO sales accounted for only 9% of all home sales in 2020. FSBO sales seem to have been declining over the past decade from a 2004 peak of only 14%. Bottom line, the FSBO Market Share is shrinking. Now, let us discuss some of the more critical aspects of what it takes to sell your home in today’s market. How to Determine the True Market Value of Your Home? With all the apps and websites available to us today, it can be easy to go online and see what other homes nearby have sold for, but are you aware of how a detailed comparative market analysis is accomplished by a professional real estate agent, or more importantly, a licensed appraiser? An experienced Realtor can conduct a unique market analysis that considers not only your home’s location, size, condition, and any improvements you have made, but can also produce an up-to-the-minute indication of how the current market condition affects the sale price of your property. How to Market Your House to Prospective Buyers? Most FSBO sellers believe that all you need to do is put a “FOR SALE” sign in the yard, list the house on Zillow, and the buyers will follow. Unfortunately, the sign just does not work in today’s tech-fueled housing market, and even though you listed online with Zillow, your house is still not really on the market. The FSBO market is more like a wholesale market and will be treated as such. When a licensed agent puts your house on the MLS and syndicates it to hundreds of websites, you are now on the retail market. This is where you will get the greatest amount of visibility to active, interested, and qualified buyers. Should I Hire a Real Estate Agent or Sell Myself? I will say that some FSBO sellers do end up selling their homes on their own. If you are thinking of selling your home on your own, consider a few things, as discussed above, pricing and marketing are important, yet there is so much more. Today, we must consider the health and safety of ourselves and any potential buyers who enter your home. The paperwork, sure, you can attempt this on your own as well, but do you know what it takes to protect that contract and make sure that you get to the closing table? Negotiations, maybe you are in sales, and you are confident, an experienced agent is a consultant, not a salesperson. An agent’s job is to protect your interests and has a fiduciary responsibility to get you the best possible outcome using transparency and integrity along the way as they help you accomplish your goals. Protecting your interests and equity is our highest priority. I can go on and on. By the way, once your home is put on the wholesale market as FSBO, just be aware that most of the calls that you will be fielding are from, yep, you guessed it, real estate agents. This can be a viable source of business for real estate agents as the vast majority of FSBO sellers end up listing with an agent after a fair amount of frustration and lost time. Whatever you decide to do is fine by me, just be prepared. Okay, I am almost done. If you started down this path of for-sale-by-owner, I am sure your intentions were good. You simply wanted to save money, right? Or do you want to net as much money as possible at the end of the day? The data does not lie; FSBO sellers have historically sold for significantly less than similar homes sold on the retail market. If you want to get the highest possible price for your home in a reasonable time frame based upon our current market conditions, give me a call, and I will help you make the best decision for you and your situation. It can put more money in your pocket. If you need to sell your home to buy your next home or not, my team and I can provide you with direction. Consultations are free of charge. Cheers and have a great day! Author: Joe Chavez

“When it rains, look for rainbows; when it’s dark, look for stars.” — Oscar Wilde Ah, love. It’s hopeful, excited, and full of potential. And it’s on full display every February 14th. But when pandemic protocol makes a romantic night (or day) out challenging, there are still plenty of ways to enjoy Valentine’s Day in and around Denver while staying safe and distancing from the masses. Here are five ways to enjoy a virtual, yet romantic, Valentine’s Day with your sweetheart. Bake a Piñata Cake Denver-based Chefate is hosting a virtual cake stuffing party, where participants can connect online as they create culinary masterpieces (or something close). Perfect for couples who enjoy chemistry in the kitchen, it’s also a great opportunity for those flying solo to make virtual friends as they show off their pastry prowess. Or you can attend without your mate to create a tasty surprise for Valentine’s Day. Chefate’s founder, Chef Nakia, notes on her website that a non-perishable food item will be donated for each person who attends the Surprise Your Sweetie event. Sign up here for the event, which occurs Saturday, Feb. 13th at 9 am MST. Watch a Show Littleton’s Town Hall Arts Center is offering a streaming version of Almost, Maine, “a vignette of nine short plays that explore the love and loss in a remote almost-town called Almost, Maine.” Tickets are just $15 and can be purchased here. The show will run Friday and Saturday, Feb. 12th and 13th, at 7:30 pm MST. Enjoy the Opera Pittsburgh Festival Opera’s “Some Enchanted Evening” will feature performances from classic operas including La Boheme, Pagliacci, and Samson and Delilah, with additional selections from The Phantom of the Opera, West Side Story, and South Pacific. At just $10 for an online download, it’s an economical way to get your special someone in the Valentine’s Day mood. The event will occur at 7:30 pm EST (that’s 5:30 p.m. Colorado time), and tickets can be purchased here. Paint a Masterpiece Or something close. LoDo’s Painting with a Twist is offering several in-person classes on Valentine’s Day, but for those couples who want or need to stay in, there are at-home kits designed to foster shared creativity and fun. Choose the whimsical “Adorned Llamas” set or the moody “A View For Two” set, which includes online video instruction. Pick up on site. Prices start at around $70 per set (which includes materials for two). Check out your options here and note that there are even Daddy (or Mommy) and Me sets for a family-friendly Vday experience. Give (and Get) a Massage. Enjoy a spa day at home with a massage. Cryptotherapy UK’s Nathan offers a free video teaching you how to Give Your Partner the Perfect Massage for Valentine’s Day. Create your ambiance with a few scented candles, mood lighting, and soft music, and don’t forget a soothing massage oil. Following the video, you can give and receive a lovely massage in less than an hour. Check it out here.

Winterizing your sprinklers is an important task that Trinity Team Management will coordinate for its owners. Here in Colorado, we generally schedule blowouts for the first week in October. We hire professionals to complete the job to ensure the pipes do not freeze. If you forget to winterize your sprinklers, you run the risk that water will freeze in the irrigation valves, pipes, and sprinkler heads. When water freezes, it expands, causing the parts of your system to burst and destroying your sprinkler system The cost is approximate (generally a $75-90 charge for our companies to take care of winterization). Some of the smaller vendors use a compressor that is not large enough, but they are less expensive. This runs the risk of breaking the blow-off valve/vacuum breaker if the compressor they use is not large enough. All the companies we use will use the correct size compressor. Hence, the old saying, you get what you pay for.

Ultimately, the decision is up to you, the owner. In our experience, we have found that 80% of applicants have a pet. When you’re renting out a single-family home, as opposed to a townhouse or condo, dogs are typically part of the equation. If you decide not to allow pets, it may take longer to find a tenant, but it is possible. There are a few things to consider when accepting pets: Service and Support animals are legally not considered pets. They are an extension of their owner, who needs their help for day-to-day activities. You can not deny them rental status or charge them a pet fee. Pay attention to zoning laws. Some cities do not allow pit bulls, and some do. Does your tenant want to keep chickens in the backyard? Does that HOA allow chickens? Trinity Team uses PetScreening.com. We collect information regarding the pet, and the website gives us a FIDO score (so cute). This score lets us know how we feel about accepting the dog. We learn about shot records, past aggressiveness, age, breed, etc. The Trinity Team typically does not accept cats. Be sure to implement a pet agreement and collect extra money each month for “pet rent.” With so much to think about, it’s comforting to know that Trinity Team Management has your back. We have the knowledge and experience to do this kind of thinking for you!  

What is the most difficult aspect of managing your property? We at the Trinity Team believe it’s the landlord/tenant relationship. As a landlord, we want to start the relationship off on the right foot, and we take pride in our rental property. Generally speaking, new landlords are overly trusting when meeting potential renters. They want to see the best in them, believe in them, and go the extra mile for them. The truth is that the landlord/tenant relationship is the most challenging, yet most critical aspect of successful property management. It’s crucial to follow Colorado state laws and legalities as well as Fair Housing and HUD guidelines. The best way to reduce risk when finding a tenant is to be choosy, but do it legally. Business decisions must be based on facts and not on instinct alone. You may feel connected to an applicant if they were referred to you, and skip the verification process altogether. You may take their word about credit, income verification, past rental experience, current employment, and criminal history. This is a big mistake; objective rental criteria must be developed and applied to everyone equally, regardless of how you feel about them personally. Understandably, it’s faster and more convenient to skip this process and take the tenant at their word. Why do landlords fall into this pit of deception? They simply don’t have the tools, time, or training. When the landlord is inundated with applications all at the same time, they feel a simple conversation is sufficient to move forward in the process. Failing to follow fair and legal rental criteria is a potential liability. Trinity Team has been managing commercial and residential properties since 2008, and we take the screening of potential tenants very seriously. We do have the time, tools, and experience to avoid the red flags you may not recognize. If you’re ready to find a management company that can properly screen your tenants, give us a call!