Podcast Host, Andrew Schultz, goes over what passed at the state level for real estate investors as a result of the 2020 election.
Also in this episode, Andrew discusses how long to keep old tenant files before discarding them. Should you keep old tenant files forever?
Next, what happens when a tenant signs their lease and hands over their security deposit in advance? Should you give the tenant early access to the rental?
Last, but not least, how much notice should you give a tenant for inspection? Find out by listening in.
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Andrew Schultz: (00:00)
Hi, everyone. Welcome back to another episode of the Rent Prep for Landlords podcast. This is episode number 339. And I’m your host, Andrew Schultz. On today’s episode, we’re going to be talking about election results. What did this election mean for real estate investors at the state level? What do you do with old tenant files? When should you give a tenant early access to a rental and how to properly notify a tenant before an inspection? We’ll get to all that right after this.
Voice Over: (00:27)
Welcome to the Rent Prep for Landlords podcast. Now your host, Andrew Schultz.
Andrew Schultz: (00:32)
Jump into today’s episode. Don’t forget to check out the Rent Prep for Landlords Facebook group. It’s a great free resource for you to network with housing providers from around the country. And if you have a question or a situation that you’ve never dealt with, chances are someone in the group has been there before and can lend a helping hand. As of this recording. We’re at 11,840 members, and we need your help in the push to 12,000. Check it out today, over at facebook.com/groups/rentprep. Don’t forget to mention the podcast when answering the questions so we know how you found us. So I think we can all agree that 2020 has been an absolutely crazy year by anyone’s standards, but there’s been so much drama surrounding the election. That a lot of the stuff that happened at the state level got passed right over. There were several pieces of legislation that were passed at a state level that will have an impact on the real estate markets and things like that going forward.
Andrew Schultz: (01:20)
And I wanted to take a little bit of time to emphasize that stuff. This article from housing wire seems to do just that this was actually published right after the election on November 10th. And it was written by Tim Glaze again, over at housing wire. The title of the article is “Real estate on the ballot: Here’s what passed at the state level. Let’s jump right in several state-level, real estate initiatives and urban development policies were voted on in the November 3rd general election, including issues involving tax credits for veterans widows and longtime homeowners. Here’s a state by state real estate ballot breakdown. That was a tongue twister from California, at Georgia, Nebraska, and others. We’re going to start with California proposition 19 passes the passing of proposition 19 in California, overhauls proposition 13, which slashed property taxes by almost 60% in 1978. Now eligible homeowners may transfer their tax assessments anywhere within the state, including the ability to transfer tax assessments to a more expensive home with an upward adjustment people 55 years or older with disabilities can also transfer their tax assessments.
Andrew Schultz: (02:22)
This yes vote means that inherited homes not used as a principal residence may be reassessed at market value. When transfer moving on to Colorado of Ben muddy passes, the passing of amendment be repealed. The Gallagher amendment of 1982, which set a residential and non-residential property tax assessment rate in the Colorado state constitution. This means that the state legislature can freeze property tax assessment rates at its current rate 7.15% for residential property and 29% for non-residential property. In comparison, homeowners paid 21% in Texas in the eighties in the future, the state can also provide future property tax assessment rate decreases moving on to Florida amendment five passes a 2008 ruling made the save our homes benefit cap, portable, allowing people to transfer their homestead exemption up to $50,000 from one property to another. The passing of amendment five extends the transfer period from two years to three years.
Andrew Schultz: (03:20)
Also in Florida, we have amendment six passing amendment six transfers, a disabled veterans tax benefits to a surviving spouse who can keep the tax benefit until they sell the home remarry, or pass away. Moving onto Georgia referendum, a passes, the passing of referendum, a exempts habitat for humanity and similar charities in Georgia from paying taxes on parcels, under development. If the purchasers received interest-free loans, the yes vote also helps habitat for humanity itself. Allowing the company to save on operating costs while funneling money toward renovation projects and adds to the local tax revenue. Moving on to Louisiana amendment six passes the passage of amendment six means that seniors veterans and those with disabilities can make up to a hundred thousand dollars a year, beginning in 2026 while retaining their homestead benefits. As long as no major improvements are made to the home. The income cap previously was $77,000.
Andrew Schultz: (04:13)
Moving on to Nebraska amendment two passes with an ion development in poorer areas of the state, the passing of Nebraska amendment two increases the repayment period for tax increment financing from 15 to 20 years in areas with an average unemployment rate at 200% or more of the state level and poverty tax rates of more than 20% and last but not least moving into New Jersey public question two passes in passing public question to peacetime veterans and their spouses are now extended. The state’s $250 property tax deduction in 100% property tax exemption benefits previously afforded only to veterans who saw military combat.
Andrew Schultz: (04:55)
So there you have it folks, a state-by-state breakdown of all of the various ballot measures that were passed across the country this year, having to do with real estate. If you have no of anything that we didn’t cover here, please let us know. Especially if it’s at a state level or at a larger Metro, something along those lines we’d like to kind of report on this stuff and make sure that we’re trying to keep as many people as possible current on what might be happening in their state that they may not be hearing about. So if you know of anything like this, feel free to pass it on to us. You can drop us a message email@example.com. There’s a contact form down at the bottom of that page. Just send us a link to whatever you happen to have, and you may find it featured on an upcoming episode of the podcast,
Voice Over: (05:32)
Water cooler wisdom, expert advice from real estate pros.
Andrew Schultz: (05:41)
Managing your property records can become a cumbersome task, especially as you grow over the course of time. How long should you actually hold on to some of those paperwork after you’ve disposed of a property? That’s the topic of today’s water cooler wisdom. This one comes to us from the Rent Prep for Landlords Facebook group. And we’re going to jump right in here. I’ve owned a rental property since 2010 and up until three years ago, I go, when I went electronic with my leases, I’ve printed out leases bills, et cetera. How long do you keep old tenant files before shredding them? I’m trying to clean out and start 2020 all electronic in every aspect. And again, this one comes to us from the Rent Prep for Landlords Facebook group. So the safe answer here is hold on to anything until the statute of limitations runs out.
Andrew Schultz: (06:23)
So for instance, in New York state there’s a the six-year statute of limitations on collection of rents on contracts and on debt collection. And there’s a 20-year statute of limitations on recovery of a judgment. So for instance, if you were to take a tenant to small claims court and you were to get that money judgment against them after an eviction, or because they caused a bunch of damage or something like that in New York state, you’re going to want to hold onto that paperwork for 20 years. And I believe most areas in the state, it’s a, it’s initially 10 years, and then you have to get another ten-year extension on top of that, but that’s potentially 20 years that you’re going to have to hold on to that type of paperwork. Most paperwork doesn’t need to be held onto anywhere near that. Long in checking the IRS website, I found that they recommend typically about seven years for most paperwork, seven years from the date that the taxes were paid.
Andrew Schultz: (07:11)
So if you, for instance, didn’t pay your 2020 taxes until 2022. For instance, you’re going to want to hold that paperwork until 2029, essentially. So that was the quick recommendation off of the IRS website. And they have a breakdown of some other dates for, for how long you should hold on to things. But beyond that, in terms of how long should you hold on everything. I tend to hoard my data, especially when it’s digital because I can always buy another hard drive and I don’t have to worry about, you know, mounds and mounds of paperwork or whatever, but I love having access to reference data from the past. So I tend to hold on to things forever. All of that being said, there’s some stuff that you should hold onto for as long as possible. Things like your deed, your survey, your mortgage release, things like that.
Andrew Schultz: (08:00)
Don’t let stuff like that. Go here. Definitely don’t want to hold onto that stuff for as long as you own the property and something like a mortgage release, I would just hold on to it indefinitely. Because you never know when something like that might pop up and you might have to prove that that mortgage was successfully paid off and discharged and everything else. So other paperwork that I would definitely recommend holding onto, I would hold onto this stuff while you own it. And then for maybe a period of a couple of years after you close the closing statement from when you purchase the property, the capital improvement, logs, any sort of permits that you had pulled when you were doing work on the property, any signs of any types of warranties that were included on any work that you had done. If you had a certificate of occupancy, that’s definitely something that you should hold onto.
Andrew Schultz: (08:46)
You know, there’s a lot of paperwork here that you should be holding onto for an extended period of time. And my recommendation to most people is going to be, you know, hold onto it for as long as you can tolerate holding onto it. If you can digitize, it that’s even better. But realistically speaking for most paperwork here, it seems like seven years is going to be a pretty good length of time to hold on to stuff. You may find that there is paperwork you want to hold on to longer than that though. Just kind of keep that in mind. If you, if you think something might be important or you think something might come back down the road and there might be a question on it, paper, doesn’t take up that much space at the end of the day. So that’s my recommendation.
Andrew Schultz: (09:22)
Generally speaking, the safe answer is until the statute of limitations runs out. The second safest answer is provided by the internal revenue service. And it seems to be seven years from the date a tax was paid. And beyond that, there’s some stuff that I would just keep forever for the sake of holding onto it. Don’t forget historic data can have a lot of value when you’re analyzing deals in the future, or you need to pull up something from the past and compare it to something. Now having access to that older data sometimes is really, really valuable. And from a business standpoint, it’s, it’s really valuable because it helps you to be able to take a look into the past in order to kind of forecast the future. One of the more common things that we are referencing older data for constantly is looking up, what did we pay for something, you know, three years ago versus what are we paying for that same thing. Now that’s one of those things that really helps you to see trends in pricing and things like that. It’s, it’s incredibly helpful to have access to that data. So that is my thoughts on it. I would hold on everything for as long as possible. That’s just me personally. And then obviously now you have some guidelines as to how long you absolutely have to hold on to things.
Voice Over: (10:34)
Forum quorum, where we scour the internet for ridiculous posts from landlords and tenants.
Andrew Schultz: (10:43)
Forum quorum also comes to us from the Rent Prep for Landlords Facebook group. This one is with regards to accessing a tentative apartment, okay. Fellow New York landlords. We sent our tenant a notice of inspection via email, and he responded that he has received it, but will not be home. Are we allowed to enter the premises? So I’m going to preface this by saying, you definitely need to check the laws in your state and in your municipality with regards to accessing a tenant-occupied apartment. And the reason I say that is because even here in New York, we have two different sets of guidelines. So the state guideline is that a housing provider can enter an apartment or a rental house to provide necessary repairs in accordance with the terms of the lease or to show the apartment. However, the landlord has to give reasonable notice and here in the state of New York, reasonable notice is found to be 24 hours.
Andrew Schultz: (11:34)
That seems to be pretty much universally accepted. And actually, the attorney General’s office here in the state of New York seems to use that as the standard for reasonable notice, beyond that, if there’s an emergency a fire or a flood, or, you know, you think that there might be somebody injured inside of the apartment, you can use an emergency entrance procedure and basically knock and walk-in. Obviously, you’re going to want to limit that to very extreme situations where you know, that there’s an emergency. It makes sense that they would have that sort of an exclusion in there for emergencies. But it’s definitely not something that you’re going to want to sit there and abuse either. So, while I was looking into this, I found out that New York City actually has a stricter piece of legislation in place that says that if you’re doing a, an inspection, you have to give a 24-hour notice, but if you’re doing a repair, you have to give a week notice.
Andrew Schultz: (12:24)
So that’s actually something that I just learned while doing the research for the segment. Since we don’t operate in New York City, that’s not something that was really floating around in my head. But if you are operating in New York City, that’s definitely something that you’re going to want to know. So going back to my original point, definitely made sure that you’re checking your state and local legislation before you make a determination as to whether or not you can just walk into somebody’s apartment. That said, it sounds to me as though this particular landlord did what they were supposed to do. They send a notice in writing via email, the tenant received the notice. So you know that the tenant has acknowledged it. And even if the tenant is not home, I would say that you have the green light to go into that apartment. Since obviously, you’ve given them the proper notice at this point, if you have any questions on this, this would definitely be something that I would recommend speaking to an attorney on, but at the very least, it makes sure that you’re doing your research so that you know, that once you’re doing is legal within the letter of the law and that you’re not putting yourself in hot water.
Andrew Schultz: (13:21)
So that pretty much wraps things up for this week’s episode of the Rent Prep for Landlords podcast. Thank you all so much for listening. We truly do appreciate it. Our goal with the podcast is to help as many people as possible make educated decisions when it comes to real estate. And you can help us to reach that goal. If you heard anything in this week’s episode or any of our other episodes that will help someone, you know, please do us a favor and share it with them. If you’re looking to get in contact with me, I can be reached over at what’s drew up to.com from there, you’ll find links to everything going on with me over at owned Buffalo, as well as other projects we’re working on. There’s also a contact form over on ownedbuffalo.com, where you can send me a message directly.
Andrew Schultz: (13:57)
If you’re looking for top tier tenant screening services, head on over to rentprep.com, there are multiple products to choose from including tenant paid options. If you’re looking for something and you’re over 50 doors ask about the enterprise-level programs and pricing. We’ve been enterprise users of Rent Prep for years now, over at owned Buffalo. And it’s definitely changed the way that we screen our tenants. So be sure to check that out today, over at rentprep.com. Again, thank you all so much for listening. We’ll be back next Thursday with an all new episode that you won’t want to miss until then I’m Andrew Schultz with own Buffalo for rentprep.com. And we’ll talk to you next week.