What’s the difference between a second home and an investment property?

A vacation home on the coast - Zenith Properties NW in Clark County WA

Having a second home to travel out to for vacations is a luxury that many of us work hard to attain. However, if you decide to rent out your second home during the parts of the year when you aren’t there, can you still call it a second home? The differences between the terms “second home” and “investment property” are more than semantic; they each carry different financial implications and are assessed separately by the IRS. If you’re wondering about the difference between second homes and investment properties, read on to learn more from our team at Zenith Properties NW!

Second Home vs Investment Property: What’s the Difference?

The first difference between these two types of properties is the risk factor in investing that bank lenders see, both on their end and your end. If they know that you are interested in a property for the sake of having a vacation home for your family, you should expect the same interest rates and income requirements as if you were purchasing a permanent home.

However, investment properties have many extra insurance requirements and local regulations to abide by. Additionally, there is not the same guaranteed usage as there is with a second home, making it a riskier venture for both the renter and the lender. For these reasons, you can expect larger down payments and higher interest rates when setting up an investment property mortgage.

Second Homes, Investment Properties, and Taxes

The IRS has strict definitions of the differences between these two types of properties that you must abide by for tax purposes. By definition, a second home must be lived in for at least 14 days a year and 10% of the days you rent it. If you live in your second home for two weeks but rent it out for 200 days, you will not have lived in it for 10% of the days that you rented it (20 days), thereby causing it to be classified as an investment property.

The reason for these distinctions comes in the way they affect your taxes: second homes are eligible for the coveted mortgage interest tax deduction, while investment properties have other benefits, such as being able to deduct your mortgage interest from your rental income as a straightforward expense.

Learn more about Second Homes vs Investment Properties with Zenith Properties NW

There is a lot to know about the distinctions between these two types of properties if you’re looking to make an investment of either kind, so if you have any further questions, don’t hesitate to reach out to our team at Zenith Properties NW. We want to help you make smart investment decisions and enjoy the benefits of your next property however you see fit!

When is the Best Time to Move?

Family moving into new home - Zenith Properties NW serving Clark County WA.

Packing your belongings and getting ready to locate from one area to another takes time and dedication. Knowing the best time to move can help make this endeavor easier and more efficient. If you’re interested in understanding more about the best time to move, it’s essential to examine different times of the year. Doing so can provide the information required to make your relocation go even smoother. Here are some tips from Zenith Properties NW!

Examining Different Seasons Can Help You Determine the Best Time To Move

Looking at the effects of different seasons on relocating is an excellent way to determine when it’s most ideal to pack up and relocate. With four seasons available, you can weigh the pros and cons of each one to help make your decision.

  • Winter: While winter offers one of the most inexpensive times of year to move, your most significant obstacle is the crummy weather. However, flexible schedules by moving companies can help make up for this inconvenience.
  • Spring: During this season, you’re emerging from winter and moving into a time of year with excellent weather conditions. Yet, when considering the best time to move, you’ll still be dealing with a lower amount of demand for your home than you would during the three months of summer.
  • Summer: This season can be the best time to move as it typically includes high demand for homes. If you decide to sell, the odds are higher for someone to purchase your house quicker. Also, your kids will be out of school during the summer, making it easier to relocate.
  • Fall: You should still have great weather conditions during the Fall. Often, you can get a better deal on a home during this off-season, making it an excellent candidate for the best time to move.

Determining the Best Time To Move by Considering Other Elements

Considering other elements, such as the month, week or day, is essential in choosing an ideal time to relocate. From September through April, demand for movers can slow down, providing you with lower rates for transporting your belongings.

Choosing a mid-month and midweek move is highly recommended as the cost will likely be lower due to low demand. Doing so can help you save a few bucks when relocating from one area to another. After deciding on the day, getting an early start is also recommended as you’ll have more daylight hours to get your move completed

Moving at your ideal time should make the process go more efficiently. It can already be a hectic time, so doing all you can to ease any tensions can be highly beneficial.

Best Upgrades to Maximize Your Rental Income

Best upgrades to maximize your rental income in Clark County WA - Zenith Properties NW

Your rental property is a huge asset, which is why it’s in your best interest to maximize its value. Though many property owners balk at the thought of spending money on dozens of repairs or upgrades, investing in your rental can have a huge payoff. And, many of these upgrades don’t have to break the bank to be effective! Here are the best rental upgrades you can make to increase your property value:

Apply a Fresh Coat of Paint

Repainting your rental property is a budget-friendly way to make a big difference. A fresh coat in the right color goes a long way in making a rental look clean and cozy. To save even more money, you could try to negotiate a discount by buying paint in bulk. That way, you also won’t have trouble finding a color match if you need to do some touch-ups later on.

Replace Interior or Exterior Doors

Believe it or not, your doors can make a big impression – especially if they are in poor condition. If your front or interior doors are sticky, scratched, squeaky, or frequently stuck, then they could give off the sense that your property isn’t getting the attention or care it needs. Replacing or touching up your doors is an easy and cost-effective way to boost the appeal of your rental.

Add New Landscaping Features

Landscaping is one of the first things that people will notice about your property, so it should be clean and inviting. Though massive landscaping projects can get quite expensive, you don’t have to go overboard; a well-kempt lawn, some flowers, or potted plants can go a long way.

Refresh Your Flooring

New flooring can be pretty expensive to install, but dingy or stained carpet can seriously diminish the appearance of your rental property. Many renters value units with hardwood, laminate, or tile flooring – both because it looks better and because it’s easier to care for. Investing in new flooring can totally change the look and feel of your rental while adding immense value.

Upgrade Your Appliances

Though appliances can be a little more expensive to upgrade, they can add a lot of value. Newer or repaired appliances look and function better, and they show tenants that you are willing to invest in their comfort. And, some appliances – like washers and dryers – can even allow you to charge additional fees.

Pressure Wash the Exterior

Pressure washing is probably one of the cheapest and most impactful ways to upgrade the appearance of your rental property. Within a matter of hours, you can wash away dirt, mold, and mildew from the exterior of your property – including areas like the porch or balcony. If you don’t own a pressure washer, you can rent one at your local hardware store or hire some help.

Invest in Better Lighting

Lighting can completely alter the mood of your rental property while illuminating all of your other beautiful features. A relatively inexpensive way that you can improve your lighting situation is to change light bulbs, clean out and dust fixtures, and make repairs to broken fixtures.

These upgrades can help you maximize your rental income in no time. If you are looking for more ways to boost your property’s value, contact the property management experts at Zenith Properties NW! Our experienced professionals have been proudly helping property owners throughout Clark County WA for over 30 years, and our expertise can help bring your property to the next level. Just give us a call today to get started!

Screening Your Renters Carefully

Tips for screening your renters carefully in Clark County WA - Zenith Property Management NW

It’s crucial to screen your tenants carefully prior to signing any agreements. An irresponsible renter could cause damage to your property, and high turnover or eviction rates can take a big toll on your business. That’s why it’s important to know how to find responsible tenants that are a good fit for your property. Here are some steps you can take to evaluate potential tenants:

Set Criteria for Your Tenants

The first step in finding great tenants for your property is to determine exactly what you’re looking for. Sit down and think about the kinds of things that are important to you. Some things to consider include income, rental history, credit score, criminal background, and more.

Once you’ve listed all of the factors that are important to you, set a criteria for your residents. This criteria will make it easier for you to review and compare applications.

Request an Application

An application is a great way to collect basic information on the renter. You can use this information to run credit and background checks while determining how honest they are on their application. When creating an application form, you should request information such as:

  • Name and date of birth: This information is important when running credit, criminal, and background checks. If you plan to run credit or background checks, be sure to clearly state that the tenant is agreeing to be subjected to these checks when they submit their application.
  • Employment status and history: You want to make sure that your tenants are going to be able to continuously afford rent, which is why it’s useful to get an idea of what their employment status and history is like. Gaps in employment may not be a reason to push applicants away, but applicants should be able to demonstrate that they have a stable source of income to cover rent.
  • Total household income: A household’s total income should be around 2-3 times as much as the rent amount. When asking about the total household income, it may also be useful to ask how many individuals will be occupying the property to ensure that the space is large enough to accommodate each person.
  • Number of pets: Pets are capable of causing damage to your property, which is why it’s useful to know how many pets the applicant has. You can use this information to determine whether it would be appropriate to require an additional pet deposit or monthly pet rent fee.
  • References: References are a great resource for you to use when screening applicants. They can help you gauge the prospective tenant’s behavior and rent history.

Run Credit and Background Checks

Before running a credit check, be sure to read through the Fair Credit Reporting Act to ensure you are following the correct regulations. If you are going to run a credit check, you legally must inform applicants of their right to a free credit report through the agency. However, you may also want to check local and state laws to see if you are able to charge applicants for the cost of a credit check.

Additionally, you can use information from background checks to get a better idea of what the applicant’s past behavior is like. These reports can provide details on things like previous evictions and criminal records, which can be very useful in determining whether or not the tenant is a good fit for your property.

Contact References

Don’t forget to contact the applicant’s references! Though it may be tempting to skip this step, references are a great way for you to get a first-hand account of what the prospective tenant is like. When contacting one of their previous landlords, you can ask questions such as:

  • Did the applicant pay rent on time?
  • Did the applicant ever receive noise complaints?
  • Did you have to withhold any part of the security deposit?
  • Would you rent to this applicant again?

Interview the Renter

If the prospective tenant seems like a good fit, then it may be time to schedule an interview with them. An interview allows you to get to know what the applicant is like as a person, and it gives you an opportunity to ask any additional questions that you may have. Good questions to ask include:

  • Does anyone in your household smoke? If so, indoors or outdoors?
  • Does anyone in your household work nontraditional or night hours?
  • Do you have plans to get a roommate while living here?
  • Do you have frequent overnight guests?

When conducting your interview, do not ask invasive questions and be sure that you are complying with the law. Obtrusive questions about things like sexual orientation, disabilities, age, ethnicity, family status, or religion could violate the Housing and Urban Development’s Fair Housing and Equal Opportunity requirements.

How an Experienced Property Manager Can Help

Taking the time to carefully screen and interview each applicant can easily become a full-time job, especially if you have multiple vacancies to fill. However, you don’t have to do it all alone! Experienced property managers, like those at Zenith Properties NW, have the expertise and tools needed to find great tenants quickly and efficiently. If you need help finding responsible tenants to fill your properties, just give us a call today to get started!

Questions to Ask Before Hiring a Property Manager

Questions to ask property managers before hiring in Vancouver WA - Zenith Properties NW

Your properties are valuable assets, and a skilled property manager can help you maximize their profits. That said, it’s important to know that you’re working with somebody who is knowledgeable and experienced. That’s why at Zenith Properties NW, we recommend carefully interviewing a prospective property manager prior to signing any paperwork.

When it comes to interviewing a potential property manager, it can be challenging to know where to start – especially if you are new to the industry. However, there are a few questions you can ask to gauge whether or not the company will be a good fit for your needs. Here are our top questions to ask before hiring a property manager:

What Services Do You Offer Clients?

Property managers have a lot of responsibilities, from finding and screening tenants to handling complaints and initiating evictions. It’s important that the property manager is cut out for the job, and that they can carry out all of the tasks you need them to. This question can help you determine whether or not their services are a good fit for your needs.

How Many Rental Properties Do You Manage?

This question can help you determine the property manager’s level of experience, as well as how much personalized attention they can give you. Generally speaking, somewhere between 80 and 600 properties is ideal; less could indicate inexperience, while more could mean that your property will get lost in the crowd.

How Many Staff Members Do You Have?

It’s important to find a property management company that is just the right size for your needs. Too few staff members could indicate that they are overwhelmed with work, and too many could be a sign that you won’t receive personalized attention and services.

What Type of Insurance Do You Carry?

Some states have specific insurance requirements for property managers, so it’s important to check your area’s laws. You can save time by only interviewing potential property managers who carry the necessary insurance, certifications, and other qualifications.

Do You Mark-Up on Repairs and Maintenance?

Some property managers will mark-up repair and maintenance fees, which can diminish the profits you get to take home. Working with a property manager who does not charge mark-ups can save you money in the long run.

How Do You Determine the Rent Amount?

Strategically setting a rent amount can help maximize your property’s profits. An experienced property manager should have a deliberate system for determining rent prices. By asking this question, you can get a sneak peek at their thought processes while also discovering their level of skill and experience.

What Is Your Lease Renewal Rate?

This question can help you determine whether or not the property manager is good at retaining tenants. A high lease renewal rate indicates that the property manager knows how to select the right tenants and keep them happy over time, which encourages them to re-sign their lease. Generally speaking, a lease renewal rate of 80% or higher is a good sign that the property manager knows what they’re doing.

Are There Any Fees When the Property is Vacant?

Some property managers will charge a flat rate for their services, meaning that you will pay them whether or not your property is generating income. However, others will charge based on a percentage of the rent collected, so you won’t have to pay if the units are vacant. It is usually in your best interest to search for property managers that do not charge for vacant units.

What Percentage of Your Rentals are Usually Vacant?

This question can help you determine how effectively the property manager can find, screen, and place tenants. After all, you don’t want to enlist the help of a property manager who struggles to fill vacancies. In general, a vacancy rate of less than 5% is ideal.

Are There Any Fees for Pulling Out of the Contract?

As with any contract, it’s important to know the terms of the agreement before signing any paperwork. That includes knowing how the contract can be terminated and whether you will face any major fees if you choose to pull out.

What Miscellaneous Fees Do You Charge?

Miscellaneous fees can add up quickly, so asking for a breakdown of the fees can help you anticipate costs. Typically, property managers charge a general fee of around 8-12%. However, some companies will also charge for things like maintenance, new tenant placement, evictions, and vacant units. Finding out these details can protect you from unexpected costs.

How Do Your Tenants Contact You?

When it comes to property management, communication is a two-way street. Tenants should be able to easily get ahold of the property manager anytime for things like repairs, questions, or complaints. That’s why it’s important that the property manager has a plan in place for receiving and responding to communication from tenants.

Entrusting your property into the hands of a property manager can be a stressful decision, which is why it’s important to carefully screen potential property managers. While these questions can help you sort through the different options, it can still be challenging to find the right fit for your property.

If you are in need of superior property management services, the experts at Zenith Properties NW can help! Our knowledgeable team has been serving the Vancouver WA area for over 30 years, and we are prepared to help maximize your property’s profits. Just give us a call to get started!

Things to Do Before You Move

Moving boxes in Vancouver WA - Zenith Properties NW

Things to Do Before You Move

When all of your belongings are safely tucked away in boxes and you’ve got the suitcases packed, you may think you’re totally ready to move. However, there are several important things that you may have forgotten to take care of.

To stay organized and cut down on stress, there are some essential tasks to handle before moving day rolls around. Here’s a checklist of things to do before you move so you can seamlessly transition into your new home:

  • Patch and repaint where needed: If you put artwork or posters up on your walls, it’s time to take those down and store them for your new home. Remove any tacks, nails, or screws and patch the holes using some spackle. Then, paint over the patch to match the rest of the walls. This may also be a good time to repaint any walls you changed the color of, so they are back in their original state.
  • Do some landscaping. It can be easy to forget about your yard, outdoor patio, or balcony. However, forgetting to do maintenance outdoors could result in fees from your landlord. You don’t have to go overboard – just be sure to pull any weeds, mow the lawn, and sweep your patio.
  • Cancel your mail subscriptions. You don’t want to forget about any packages scheduled to arrive at your doorstep on a regular basis. Take some time to move any prescriptions or monthly subscriptions to your new address.
  • Transfer your utilities. To avoid excess costs, it’s important to cancel old utilities, internet services, or other services associated with your house or apartment. For an easier transition, you can also take this opportunity to set up utilities for your new home.
  • Change your address and forward your mail. Notifying the US Postal Service of your new address can prevent your mail from arriving at the wrong place. You can also set a date for them to begin forwarding your mail to your new address.
  • Notify others about your address change. It’s important for insurance providers, banks, and the DMV to have your correct address on file. It may also be useful to switch any online accounts, like Amazon, to your new address.
  • Arrange an inspection with your landlord. Having your landlord perform an inspection before you move can help you avoid cleaning or repair fees later on. During the inspection, you can make sure there isn’t anything else you need to do to get your deposit back.

These are just a few tips for a smooth transition into your new home. For more information on moving and renting, visit our blog or contact us today! Serving all of Clark County, WA for over 30 years, Zenith Properties NW can answer all of your questions.

How to Prepare Your Home for the Fall

Person cleaning gutters. Zenith Properties NW in Clark County WA talks about how to prepare your home for fall.

Fall is a beautiful time of year when the leaves begin to change colors and you can curl up by the fireplace with your loved ones. Although you may feel your home is perfect the way it is, extra efforts can ensure nothing bad happens during the chilly autumn season. In other words, nobody wants to be outside during the frigid fall months replacing a broken gutter, so what are some ways you can prepare your home for the dipping temperatures? Follow these helpful tips from Zenith Properties NW.

Fall Checklist for Homeowners

If you’re not sure what to look for, here are some important things to consider taking a look at before fall arrives.

  • Check your roof: An impaired roof can cause leaks, which can damage objects inside your home.
  • Clean your gutters: Dirty gutters can lead to buildup which will overflow and can damage the outside of your property.
  • Fill in any cracks around your home: Filling in cracks and holes around your home will prevent ineffective heating, and unexpected infestations.
  • Test your flashlights, generators, etc.: Waiting around to make sure your safety/emergency equipment is working properly is not a good idea, check it now while it’s still warm outside!
  • Vacuum and clean your heat vents: Removing dust and debris from your vents will ensure that your heaters are working efficiently.
  • Check for drafts: according to the U.S. Department of Energy, around 25-30% of heat loss occurs through windows. Install weatherstripping around your windows if you feel a draft.
  • Drain your outdoor faucets: the last thing you need in the dead of winter is a burst pipe. You can help prevent this from occurring by disconnecting your water hoses and draining your spigots.
  • Replace air filters: air filters are designed to trap particles before they enter your home, so your air filters will get clogged over time impacting how well they heat your home. You’ll want to clean or replace your HVAC filters at least once a month or as described in the owner’s manual to keep your heating costs low.

By checking these areas and making sure they’re in good working order, you’re ensuring your fall and winter are comfortable without having to worry about the weather outside damaging your home.

How to Increase Your Rent

Increasing rent for Vancouver WA properties - Zenith Properties NW

Whether it’s the economy, property taxes, or HOA dues, sometimes as a landlord you have no choice but to increase your rent to stay profitable. 

While no tenant will be happy about paying more, you can make the process fair and with fewer complaints by following these tips. 

Calculate How Much You’ll Increase the Rent

Many landlords use the 1% rule to determine their rent. This suggests that landlords charge 1% of the home’s value for rent. So if your home is valued at $300,000 the rent would be $3,000 a month. You can also look at the rental value of other homes in your neighborhood. 

Keep in mind, you’ll also want to budget for maintenance, property management expenses, and insurance premiums to make sure you remain profitable. 

Decide When to Raise the Rent

Typically, a landlord is required to give their tenants at least 30 days’ written notice before their lease is up for renewal or expires. Check with your state laws and lease agreement to determine how much of a notice you should give your tenant. 

In Washington, landlords can increase the rent as much as they want as long as they comply with the appropriate notice period and haven’t issued the notice to discriminate or retaliate against the tenant. (RCW 35.21.830) However, certain circumstances still apply as the state transitions from COVID-19 impacts. 

Notify Your Tenant Of the Rent Increase

Create a written form to notify your tenant of the rent increase. Make sure you cover all of the necessary information including when the rent increase goes into effect. You may also want to use this time as a reminder of your payment policies and late fees. 

Property Management Services in Clark County WA

These are just some basic ways to increase your rent. For more information on being a landlord visit our blog and contact us today for premier property management services. We serve all of Clark County WA!

Summer Home Maintenance Tips

Woman cleaning windows. Zenith Properties NW in Clark County WA offers some helpful summer home maintenance tips.

With our mild summer weather, now is a great time to tackle some home maintenance tips. Here are a few tasks you can complete. We at Zenith Properties NW would like to share with you!

Service Your Air Conditioner

Although we have mild summers in the Clark County area, we still get our fair share of hot days. If you haven’t used your air conditioner in awhile, now is a great time to have it serviced so that it’s ready to go when you need it.

Clean Your Gutters

It may come as no surprise that it rains often here so make sure your gutters are clean and free of debris to ensure they control rainwater properly. Neglecting your rain gutters can lead to soil erosion, roof damage, and pests.

Have Your Roof Inspected

With fluctuations in temperature and hours upon hours upon sunlight, the summer months can be hard on your roof. Have your roof inspected by a professional. They’ll be able to identify leaks, vulnerabilities, and ensure it’s properly ventilated. They can also tell you its lifespan.

Inspect Your Siding

While you’re having your roof inspected, have your siding looked at too. Many roofing contractors specialize in roofing, siding, and gutters since they all go hand-in-hand. This can identify any problem areas and keep your home looking its best.

Test Your Smoke Alarms

Go around your home and test all of your smoke detectors and carbon monoxide detectors. Replace the batteries as needed so you know you and your family are protected.

Wash Your Windows

Give your windows a good wash, inside and out to remove dust and hard water stains. You’ll be amazed at how much more natural light a clean window can let in.

Clean Your Faucet Traps

Unscrew the end of your faucets, remove the screens, and clean them to remove trapped debris. Once clean, you can replace them. This will help ensure you’re getting adequate water pressure.

Clean Your Vents

Have you ever looked up at your bathroom vents? They can become clogged with dust, impacting how they eliminate your bathroom’s moisture–which can lead to mold growth. Use your vacuum to clean your vents to ensure they’re working properly.

Repair Cracked Cement Walkways and Driveways

Concrete is strong but can crack from ground movement and tree roots. Not only is a damaged walkway unsightly, but it can cause serious accidents for which you could be liable for. Make plans to have it repaired to create a safe environment for guests.

Performing these simple tasks every summer, will keep your home in tip-top shape and help prevent minor issues from becoming costly disasters later.

Smart Technology in Rental Properties

Smart home. Zenith Properties NW in Clark County WA explains how to incorporate smart technology in rental properties.

Smart homes are no longer a far-off dream that you only see on TV. Today there are many ways to turn your house into a smart house. And you don’t have to stop at your personal home. You can also incorporate smart technology into your rental properties, making them more appealing to today’s tenants.

Keep reading to learn about some great features to consider for your rental property.

Smart Thermostats

Smart thermostats are incredibly useful. They help save on utility bills by running on pre-programmed temperature settings. Some also utilize motion sensors to detect when people are in the house, adjusting the temperatures as necessary.

To really save on utility bills, consider smart window shades with energy-efficient window treatments. Energy-efficient window treatments can reduce heat loss by around 40 percent. Smart window shades can be programmed through an app or voice-controlled device.

Smart Appliances and Faucets

You can pretty much make any plumbing fixture and appliance smart. In the kitchen, smart faucets can dispense a particular amount of water such as 1 cup or 6 ounces. Some even allow you to program certain water amounts for future use. So when you say, “coffee”, you’ll get 6 ounces of water, for example.

Refrigerators, microwaves,and dishwashers can also be voice or app-controlled.

Smart Security Systems

There are a variety of options when it comes to smart security systems, ranging from surveillance cameras to motion-activated lights and window alarms. For a full smart home experience, install smart doorbells that alert you to movement outside of the door and smart locks that allow tenants to unlock and lock doors remotely.

Smart Lighting and Electrical

Automated lights work on motion sensors and will turn on when someone enters the room. They can also be programmed to turn off and on automatically or on demand through voice command with a home device or smartphone app. Smart light bulbs even change color which can be fun for special events.

Smart plugs are another feature of smart technology that can be controlled via a smartphone or voice-controlled device, allowing users to turn electrical devices on and off. Some can even detect flooding in the home and will alert you when water hits the sensors.

Should I make my rental property a smart home?

All of these features can be a major selling point for tenants who are looking for a modern smart home to rent. Consider surveying tenants to see what kind of smart technology they admire most before investing in it.

Managing your own rental property can be tough sometimes. If you’re in need of property management service in Clark County WA, Zenith Properties is here for you. We perform inspections and maintenance, screen applicants, and advertise vacancies. Contact us today with help for your rental property.