I rent in Minnesota. In my lease, there is a term which states that the landlord must be given 2 months prior notice if I intend to leave the property on the agreed upon date. There is nothing which states the penalties if I do not, nor whether or not the lease is automatically renewed on a month-to-month basis. Just below that term there is another, which says exactly, "Tenants will vacate the apartment at the end date of this lease."

Since I gave notice that I had no intention to renew on July 1st (the last day of my lease is July 31st), am I liable for August due to the 2-months notice term, or did my landlord shoot themselves in the foot with putting a term in there that says I must be out by the end date on the lease?

Technorati Tags: apartment, intention, landlord

Appealing Property Taxes for Apartment Owners

Property taxes are one of the largest line item costs incurred by apartment owners. However, many owners do not appeal effectively. Even though owners realize that property taxes can be managed and reduced through an appeal, some view taxes as an arbitrary estimate provided by the government which can’t effectively be appealed. It tends to boil down to the old adage, “You can’t fight city hall”.

Fortunately, the property tax appeal process in Texas provides owners multiple opportunities to appeal. Handled either directly by the owner or by a property tax consultant, this process should involve an intense effort to annually appeal and minimize property taxes. Reducing the largest line item expense has a significant effect in reducing the owner’s overall operating expenses. While it is not possible to entirely escape the burden of paying property taxes, it is possible to reduce taxes sharply, often by 25% to 50%.

Why some owners don’t appeal

Some property owners don’t appeal because they either don’t understand the process, or don’t understand that there is a good probability of achieving meaningful reductions in property taxes. Some owners believe that since the market value of their property exceeds the assessed value, then it is not possible to appeal and reduce the property taxes. Although appeals on unequal appraisal are relatively new, there is a clear-cut way to appeal property taxes at the administrative hearing level based on unequal appraisal. Unequal appraisal occurs when property is assessed inconsistently with neighboring properties or comparable properties. Also, some owners are reluctant to hire a property tax consultant, even though many consultants will work on a contingent fee basis, in which there is no cost to the owner unless property taxes for the current year are reduced.

Overview of appeal process

The following are the primary steps in the annual process for appealing property taxes:

· Request notice of accessed value

· File an appeal

· Prepare for hearing

. Review records

. Review market value appeal

. Review unequal appraisal appeal

· Set negotiating perimeters

· Administrative hearings

· Decide whether binding arbitration or judicial appeals are warranted

· Pay taxes timely

Requesting a notice of assessed value

Property owners have the option of requesting a notice of assessed value for their property annually. Section 25.19g of the Texas Property Tax Code provides the owner the option to request a written notice of the assessed value from the chief appraiser. Owners benefit from requesting and receiving a written notice of assessed value for each property because it ensures they have an opportunity to review the assessed value. This notice should be sent on an annual basis. The appraisal district does not have to send a notice of assessed value if the value increases by less than ,000. However, if an owner was not satisfied with a prior year’s value and the value remained the same, the appraisal district probably will not send a notice of the assessed value for the current year. In this situation, the owner might forget to protest since a notice of assessed value for the property was not received.

How to file and appeal

On or before May 31st of each year, the property owner should file an appeal for each property. However, while many owners are comfortable with an assessed value, in many cases there is a basis for appealing. Two options for appealing include:

unequal appraisal, and

market value based on data the appraisal district provides to the owner before the hearing.

You can appeal by completing the protest form provided by the appraisal district and indicating both excessive value (market value) and unequal appraisal as the basis for appeal. In addition, the property owner can simply send a notice that identifies the property, and indicates dissatisfaction with some determination of the appraisal office. The notice does not need to be on an official form, although the comptroller does provide a form for the convenience of property owners. (You can access the protest form at www.cutmytaxes.com .)

House Bill 201 – helpful information

House Bill 201 is the industry jargon for a property owner’s option to request information the appraisal district will use at the hearing, and to receive a copy 14 days before the hearing. The name House Bill 201 is derived from the bill used to enact the law. The details for House Bill 201 are located in sections 41.461 and 41.67d of the Texas Property Tax Code. When filing a protest, the property owner should additionally request in writing that the appraisal district provide a copy of any information the appraisal district plans to introduce at the hearing. The appraisal district will typically require the property owner to come to the appraisal district office to pick up the information and charge a nominal fee, typically .10 per page. While the cost for House Bill 201 requests are quite low (typically .50 to .00 per property for residential and commercial) the information is invaluable in preparing for the hearing. In addition, filing a House Bill 201 request is important because it limits the information the appraisal district can present at the hearing to what was provided to the property owner two weeks before the hearing.

Preparing for the Hearing

Start by reviewing the appraisal district’s information for your property for accuracy. If the appraisal district overstates either the quality or quantity of improvements, this will justify a deduction. The next step is to review the information on market value and unequal appraisal provided by the appraisal district in the House Bill 201 package. If the subject property is an income property, review the appraisal district’s income analysis versus your actual income and expense statements. Consider the following areas as opportunities to rebut the appraisal district’s analysis:

· Gross potential income

· Vacancy rate

· Total effective gross income, including other income

· Operating expenses

· Amount of replacement reserves

· Net operating income

· Capitalization rate

· Final market value

Many property owners and consultants start with the actual income and expense data, and use one or two of the assumptions provided by the appraisal district. However, they primarily utilize information from the actual income and expenses in preparing their own income analysis and estimate of market value for the subject property.

When comparable sales are the primary issue in determining market value, start by reviewing the comparable sales data provided by the appraisal district versus the assessed value for your property. Convert the sales prices from the appraisal district to either a per square foot or per unit basis. Then compare the sales to the per square foot or per unit assessment for your property. Sales can be helpful during the hearing.

The cost approach is not typically used in the property tax hearings except for brand new or relatively new properties. If your property is new, the appraisal district will probably want to review the cost information and you probably won’t want to show it to them. In many cases, the actual cost of a property is higher than the estimate provided by the appraisal district. If this is the case, you will likely want to appeal on unequal appraisal instead of on market value. No matter how good your argument or how passionately it is expressed, the appraisal district staff and Appraisal Review Board (ARB) members tend to believe that cost equals value for new properties.

Deferred Maintenance and Functional Obsolescence

Another issue that is important for the market value appeal, and to some extent for a unequal appraisal appeal, is information on deferred maintenance and functional obsolescence. Deferred maintenance could include items such as:

· rotten wood

· peeling paint

· roof replacement

· substantial repair

· landscaping updating and other similar items

Most appraisal districts give minimal consideration to requests for adjustments based on deferred maintenance, unless the property owner provides repair costs from independent contractors. There are some exceptions where a cooperative informal appraiser or sympathetic ARB will take an owner’s estimate of deferred maintenance and make adjustments based on those costs. Most appraisers and ARB members are much more inclined to make adjustments if third-party cost estimates are provided. In addition, the appraisers and many ARB members are inclined to only deduct a portion of the total cost using the argument, “we’ve been giving a replacement reserve allowance for this item for the past years and it’d be double-dipping to deduct the whole value off it in the current year.” While this is an incorrect appraisal argument, it does tend to be the practice at many appraisal districts. The reality is, the cost of curing deferred maintenance is deducted from the offer by a prospective buyer.

Examples of functional obsolescence would be a three-bedroom apartment unit that only has one bathroom, or a two-bedroom apartment that does not have washer/dryer connections in an area where those connections are common. Another example would be an apartment that has a window air conditioner in an area where central HVAC is typical and expected.

Unequal appraisal analysis

The Texas Property Tax Code, section 41.43(b)(3), provides for appraising or appealing on unequal appraisal including ratio studies and “a reasonable number of comparable properties appropriately adjusted.” Virtually all unequal appraisal appeals involve a reasonable number of comparables that are appropriately adjusted. Comparables are similar properties.

This is primarily because of the difficulty and cost of performing a ratio study. Historically, the position of many appraisal districts was that the property owner needed to get a fee appraisal for each comparable property and compare the market value estimated by the appraiser to the assessed value. The cost of getting multiple appraisals made this process financially impractical. Compiling a reasonable number of comparables appropriately adjusted is simple and straightforward. The first step is to choose a reasonable number of comparables. Usually four to five comparables is the typical number used at a property tax hearing, but in some cases, property owners choose ten to thirty. In some cases, there may only be one to four comparable properties that merit consideration. Most unequal appraisal presentations include three to ten comparables. The number of reasonable comparables depends on the location, type, size and age of the property. For example, there would be fewer five-year-old bowling alleys in the northern part of Harris County compared to recently built apartment complexes.

After choosing a reasonable number of comparables, array them in a table format, including fields of data such as account number, net rentable area, year built, street address, assessed value and assessed value per square foot.

The next step is to determine whether or not to make appropriate adjustments. For the administrative hearing, if you have truly comparable properties, most boards (appraisal review board or ARB) won’t be concerned with you not making adjustments. If you make adjustments, those would typically be based on factors such as differences in size and age compared to the subject property.

You should also review the information in the appraisal district’s House Bill 201 packet on an unequal appraisal. In many cases, the appraisal districts unequal appraisal analysis will document a reduction in your assessed value! If the appraisal districts unequal appraisal analysis documents a reduction, either the informal appraiser or the ARB should make the adjustment in assessed value for you. Having the opportunity to get an assessed value reduced automatically based on the appraisal districts unequal appraisal analysis is one of the reasons to appeal every property every year.

Completing Hearing Preparation

After reviewing the appraisal district’s information on your property, the House Bill 201 package, and your market value and unequal appraisal analyses, determine the strengths and weaknesses of each approach and decide which basis of appeal provides the best opportunity for a meaningful reduction. Although appeals on unequal appraisal have clearly been the law of the land since 2003, some appraisal districts and review boards have chosen to disregard the option for unequal appraisal put forth by the Texas Legislature. Although there is litigation underway which should resolve this issue within the next year, it would be prudent to visit someone who is knowledgeable in local property tax appeals to determine whether the county appraisal district and ARB in your area are considering appeals on unequal appraisal.

Set Negotiating Perimeters

After reviewing the information, it is important to set the highest level of assessed value you will accept at the informal hearing because after you accept an assessed value, the appeal process will be complete for the year and you will not be able to appeal further.

Administrative Hearing Process

The two steps to the administrative hearing process are the informal hearing and the appraisal review board hearing.

The Informal Hearing

The following procedure and rules are typical at the informal hearing:

· Meet with an appraiser representing the appraisal district. You should be polite and prepared at this meeting. While many property owners are frustrated and angry at the high level of real estate taxes, the appraisal district appraiser does not control the tax rate set by various entities nor the policy regarding property taxes in the area or the state. The appraisal district appraiser is trying to execute his job in a professional manner and appreciates it when property owners work with him on that basis.

· Provide the appraiser information on your property and he will review that information and information he has available.

· The appraiser will likely make an offer to settle the assessed value of your property fairly quickly. You can either accept the value or negotiate further. Either way, you should know within ten to twenty minutes whether the appraiser will offer an acceptable value. If the value is acceptable, conclude the negotiation by agreeing to the value for the current year. If the value offered is not acceptable, ask to go forward with an ARB hearing.

Appraisal Review Board Hearing (ARB)

The ARB hearing panel consists of three impartial citizens selected and paid by the appraisal district. The age of most ARB members ranges from fifty to eighty. There is an unfortunate bias in the system since the ARB members are selected and paid by the appraisal district, but most ARB members are reasonable people who want to make appropriate decisions.

Like the appraisal district appraiser, the ARB does not set tax rates or tax policy. The members are also not responsible for the effectiveness of local government. It is unlikely to help your case if you complain to the ARB members about either the high level of property taxes or the poor quality of some aspect of local government.

The ARB will expect you to make your presentation in about three to ten minutes. They will typically wait patiently while you make your presentation and may have questions after you conclude. An appraiser from the appraisal district, who may or may not be the same person who attended the informal hearing, will represent the appraisal district at the ARB hearing. The appraiser will comment on the evidence you presented and will often present other information the appraisal district has available. If you requested a House Bill 201 package for your property, it substantially limits the evidence the appraisal district appraiser can offer at the hearing. The ARB members may have questions after the appraisers presentation. Then the property owner will be given a final opportunity to rebut evidence presented by the appraisal district appraiser and quickly summarize the evidence. The ARB members strongly prefer you not repeat your entire presentation at this point.

After hearing the evidence, the ARB members will confer and make a decision. This decision is not subject to negotiation and they will not revise the decision if further evidence is presented. When this decision is announced, the hearing is effectively over. The ARB will send a letter two to four weeks later summarizing their decision and notifying the owner of a 45 day limitation from the date receipt of the ARB decision to either request binding arbitration or file a judicial appeal.

Binding Arbitration or Judicial Appeal

Beginning September 2005, owners of properties with an assessed value of million or less may file a request for binding arbitration. The owner must file with the appraisal district no more than 45 days after receipt of the notice of the ARB’s decision. The binding arbitration option is interesting because it includes a loser pays provision. The appraisal district pays for the arbitrator’s fee if the final value is closer to the owner’s opinion of value, and the owner pays for the binding arbitration if the final decision is closer to the appraisal district’s opinion of value. Binding arbitration was passed to provide an alternative to judicial appeals, which can be expensive to prosecute.

Many owners pursue judicial appeals to further reduce property taxes. In 2005, O’Connor & Associates filed over 1,200 judicial appeals on behalf of property owners in the state of Texas. The judicial appeals can be expensive if the property owner and attorney don’t understand the process and have a plan in place to minimize the cost of legal and expert witness fees. Judicial appeals are typically successful. However, success requires cooperation from the property owner, such as providing responses to questions, documents and a deposition if requested. The judicial appeal is meaningful as an option to minimize property taxes since it reduces the base value. This is important because the appraisal district and ARB consider the base value in the subsequent year when setting the administrative hearing value.

Conclusion

Property owners can generate substantial reductions in property taxes by appealing annually. Consider appeals on both market value and unequal appraisal and obtain the House Bill 201 information when preparing for the appeal hearing. Property owners should consider all three levels of appeal: informal hearing, ARB hearing and judicial appeal/binding arbitration. While the ARB hearing and judicial appeal/binding arbitration can be an intimidating process, each is straightforward once you understand the mechanics.

Find More Property Articles

Technorati Tags: apartment, Appealing, Owners, Property, Taxes

Buying Apartment Buildings – Good Move?

Not that there’s anything wrong with fixing up junkers, you make good money. But when you are trying to figure out what is the best return on your time, fixing a junker just doesn’t compare to buying an apartment building.

Let’s consider the two, just for a bit of perspective.

When you buy an apartment building you have much less competition; you are one of only a few investors in your market going after deals. Chasing flippers you’re one of hundreds. Why? Houses are easy for people to get their heads around, so everyone and their cousin does it. Apartment buildings are more challenging, because of the high dollar figures involved and more details to master, so fewer people take them on.

Buying apartment buildings makes you “much” more money. When you fix up a house you get one check one time; when you sell. You might have 100 hours into a rehab deal, and when you sell you net ,000. Nice! However, take those same 100 hours and put them into buying a 50 unit apartment building. Now, not only do you get paid more, your apartment building pays you multiple times. When you close you get cash back from pro-rated rents, you pay yourself a management fee for raising private money for the deal. Each month you receive positive cashflow from the property. Then, 18 months or so after closing, after renovating the units, raising the rents and filling vacancies, you refinance and pull out a six figure, possibly a seven figure check. These are loan proceeds and tax-free.

If your goal is to become wealthy, building a multi-million dollar net worth, buying apartment buildings with get you there quicker. You need fewer deals to reach the one million dollar mark (a single deal can do it for you) making it much more achievable.

Even though most real estate investors are afraid of apartments because of the big numbers, buying apartment buildings is in fact less risky than buying houses. If any single tenant stops paying rent you still have cashflow coming in from all the other paying tenants in the property to cover your expenses. When a tenant in a single family home stops paying, that’s it! You’re 100% vacant and personally on the hook for the mortgage, taxes and insurance.

Buying apartment buildings allows you to achieve economies of scale, making your per unit expenses lower and cashflow margins higher. Because you can generate more useable income with apartment buildings, it is financially feasible to hire a professional management company, freeing you from day to day management of the property.

Buying apartment buildings and managing them effectively provides you and your family with a lifetime of residual income.

As you can see buying apartment buildings provides you with everything you wanted when you first thought of getting into real estate; large lump sums of cash, monthly cashflow that grows over time, the time freedom to really enjoy your life.

Funnily enough, houses can provide few of these benefits, yet ‘flipping gurus’ tout them as the investment vehicle for your financial freedom.

Don’t be fooled. Educate yourself, take action to buy your first apartment building and enjoy the income for the rest of your life.

More Buying Articles

Technorati Tags: apartment, Buildings, Buying, Good, move

I live on first floor. People living directly above my apartment makes a lot of annoying footstep noise. I can hear them walking. And its like someone is hammering when they are walking. Also it makes the wooden clickering sound as they step on the floor. And I cant stand this anymore. This is affecting my sleep.

I haven’t spoken to the people living above or the property manager. I wanted to know beforehand if I can take any legal actions to it if they don’t stop doing that. I live in Minnesota, USA in apartment complex. (I pay rent every month to the property manager)
I also hear the cracks and pops sound while they walk on the floor. Is it because of the bad flooring?
I agree that that have the right to walk around in their apartment. And I also think that they are not doing this intentionally. But the cracking wooden sound till 12 in the night affects my sleep. And it starts again around 6AM. I tried a lot to ignore this sounds but I can’t. Its been a month since I am living like this. I know I can’t change their walking style just by talking to them, so I just wanted to make them aware that if they don’t try to adapt changing their walking patter I could take this matter legally. (I don’t want to take any legal actions, I just want to scare them so they stop doing this.)

Technorati Tags: apartment, cracks, flooring, footstep, legal actions, minnesota usa, patter, property manager, sleep

In the state on Minnesota. When you move out of an apartment or rental property, can they try to tell you to pay them more then your deposit was, for cleaning or repairs? Or would they have to sue you?

I live in an apartment, and painted a few of the walls different colors, which they told me i could do when i moved in, as long as I painted it back. But I dont have time to paint it back. My deposit was only 200$ so i dont really care if they keep the whole thing. Ill still clean up, but im not going to bust my butt cleaning, if there just going to keep the whole deposit anyway.

So I want to know can they keep my deposit, and then tell me I owe them 100$ on top of that? Is that allowed in MN?

Please only answer if you have had exp with this, or know for sure.
This hasnt happened yet, im moving out by the end of the month so I honestly dont know what they are going to say, They told me when i painted that they may want to keep it the way i painted it. Im just worried about it.

Technorati Tags: apartment, butt, different colors, hasnt, rental property

As shown here:

http://mncourts.gov/Default.aspx?page=513&item=294&itemType=formDetails

My girlfriend wants to know if she can get her eviction expunged. She rented a town home seven years ago with two other tenants and after six months was evicted for failing to pay rent.

They never contacted her. She tried to get an apartment last week and they told her that because she had an eviction notice on her record she needed to contact the landlord of that property and get proof she didn’t owe them anything.

They said she owed them ,000 for cleaning, back rent and other misc fees. Don’t feel bad for the landlord, they made over ,000 in rent and were able to write off ,000 in income taxes.

She asked for a detailed bill which said she owed them {content}.00 because everything had been written off as bad debt. That {content}.00 was crossed out and ,000 was put in it’s place. Then they said that they would accept ,000 if she could come up with it.

It doesn’t seem legal for them to ask for money that they have already taken a tax write off on. Because it was seven years ago, they can’t even amend their taxes to correct it so these seems outright fraudulent and I have a feeling that any court would agree that if the debt is written off, it is gone. Is this a good reason for getting an expungement?

It also says that if you can prove that it is in the best interest of the public that she be allowed to expunge the record that it should be so. What are good arguments for proving that it would be in the best interest of the public?
She is trying to get an apartment with me, her mom and her mentally handicapped 20 year old brother. I think the benefit to the state is that they aren’t homeless and not breaking fire code. Together we make over 100,000 a year. But since I am on unemployment until I go to basic training I don’t qualify to co-sign. She has been evicted so she cannot cosign and since the little brother is a vulnerable adult he can’t cosign (even though he has a job and gets social security). Her mom cannot afford triple the rent of a 3 bedroom apartment so we would have to move into a 2 bedroom which exceeds number of people allowed in the dwelling.

Technorati Tags: amp, apartment, bad debt, best interest, eviction notice, expungement, fire code, girlfriend, good arguments, good reason, homeless, income taxes, landlord, little brother, mom, proof, seven years, six months, unemployment, vulnerable adult

My boyfriend and I just bought a house (110K lien), and his parents will be moving in with us, in a garage-converted apartment. Parents are selling thier house for k to my boyfriend’s older sister. Since they are close to 80 and have no other assests, we are trying to invest legally but avoid capital gains. Should that 80k be paid on our house and add the parents to the title, or should the deed to the original house be passed as a "gift" to the sister and sister pay mom & pop under the table? Or should the 80k be split between all 7 of mom & pop’s children as an inheritance (even though both are alive, they do not have a will). Let me know what options exist.
The parent’s home is a single-wide mobile home on a permanet foundation on 1 1/2 acres of land in Maryland. They bought the land & the mobile home in the early 1980s and have owned & occupied it since then.

Technorati Tags: 1980s, amp, apartment, assests, capital gains, inheritance, mobile home, mom, older sister, parents

I live in the Minneapolis, MN area and am moving from an apartment into a house that is already furnished. I need to get rid of a love seat, couch, water bed and dresser. Any companies I can call to either drop my stuff off, or that will come and pick it up?

Technorati Tags: apartment, couch, love seat, minneapolis mn area, water bed

I asked this question in the renting & real estate section and didn’t get any really helpful answers so I’ll try here.

Basically my husband and I applied at an apartment in mid June for August 1st. The 1st week of July we finally got a letter saying we were rejected due to unsatisfactory credit history, unsatisfactory debt to income ratio and unsatisfactory or insufficient rental history. We were shocked because based on their rental criteria we should qualify with the possible exception of our credit (mostly due to student loans.) We were told if our credit wasn’t perfect we would still qualify, but with a larger deposit.

The basic rental criteria was must make 2.5-3 times rent (which we do), must not have any unlawful detainers, evictions or owe money to landlords (which we don’t have any of), and must have a history of satisfactory credit (which is very vague.)

After we got the letter I called the management company and asked for the specific reasons we were rejected.
The woman refused to give me any information. She said that I could write to them requesting the information and then they would mail it to us. She was very rude and wouldn’t even tell me their rental criteria until I argued that there was no reasonable reason she could have for not disclosing it.

My husband and I were of course forced to look for another apartment- and with so little time left a lot of the places we were interested in are now taken. All the places we’ve looked at since we got the rejection letter seem shocked by how the aforementioned property dealt with the situation. The place we applied to now doesn’t understand why we would have been rejected either.

Its our right in Minnesota to dispute the information that the property management based their decision on and they must investigate and reconsider us. How can we do that if they won’t tell us why they rejected us?

My question is- is there anything I can do?
In addition to the application fee, we had to spent time and money looking for a different place to rent from. We wasted over 2 weeks waiting for them to run our application, when we called the property during those 2 weeks we were simply told that they hadn’t gotten around to running our information.

Technorati Tags: amp, apartment, application fee, august 1st, credit history, debt to income ratio, evictions, landlords, little time, management company, property management, real estate, rejection letter, rental history, satisfactory credit, student loans, time and money, unlawful detainers

Im 17 and im planning to move to a city to start a new life after I graduate from high school. I really want to know what Minneapolis MN is like, its economy, universities and houses and apartment?
OK to answer some of the previous messages, im moving from Texas. Round Rocks economy is very poor and i apply for many store like HEB. Walmart and Starbucks and most of these stores im trying to apply for a part time are not hiring until-which will take a VERY long time to get its economy back on track.Thats why its really depressing to live there. Thats why im thinking about moving to Mpls for better job opportunities. O and plus, Minneapolis is on the top 10 for the least stressful US cities(look it up)

Technorati Tags: apartment, economy, graduate from high school, heb, job opportunities, long time, minneapolis mn, part time, rocks, starbucks, universities, walmart