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JUNE 2009
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RENTAL PROPERTY MANAGEMENT DIVISION
The Art of Selling a Property with a Resident

Property owners face a tricky situation when they want to sell a property but still maintain rental income. No one likes losing income, but keeping a resident in the property while the property is for sale requires careful consideration.

Review the Sales Market
It is important to evaluate the Real Estate sales market first. Ask yourself these important questions.

• Is it a buyer’s or seller’s market?
• Additionally, what are the interest rates and the availability of financing for potential buyers?
• Are properties selling where your property is located?
• Is this a good property for investors?
• Will your property attract buyers in this current market?

In a hot seller’s market, there are fewer properties and more buyers. Therefore, in a fast-paced seller’s market, it may be better to vacate the resident, put the property in the best possible condition, and sell as quickly as possible. If the sales market is reasonable, the best alternative may still be to vacate the property and put all efforts into selling the unit. However, with the current market, keeping a resident in the property under the right conditions may be a way to put the property up for sale and maintain a more solvent financial situation, particularly if keeping the resident in a property that is more likely to attract investors.

Analyze the Current Tenancy
Before deciding to sell with the resident in the property, it is very important to check the rental agreement. If it is a lease soon to expire or it is a month-to-month agreement, then you will be able to give notice to the resident when you sell. If it is still a long-term lease, then you may want to reconsider selling or investigate if you can sell it to another investor. It may be that the resident is a prospect for buying your rental property. If so, have a professional determine if this is realistic, if they truly have the purchasing power, and that they complete this evaluation in a timely manner. If they cannot buy the residence, move on to determining whether it is worth keeping the resident in the property.

Since you have determined what the selling market is like, you have to consider if the property will realistically sell with the current residents.

• How does the property currently look with the resident in the property?
• Will they keep the property in a marketable condition?
• Will they be cooperative with showing the property and working with the listing agent?
• Will they cooperate with necessary maintenance and inspections?

Evaluate Your Financial Outlook
Sit down and realistically pencil out if you can afford to sell or if it is better to wait until the sales market improves. If the situation warrants selling, then you must figure out how many months you can sustain the property with or without rent. Add in any possible financial incentives that you may have to offer the residents for their cooperation. Then tie that in with the current sales market and the current tenancy. There are two simple questions to answer.

• Can you afford to sell in the current market with the property vacant?
• Can you afford to sell in the current market with the current resident occupying the property?

Selling with the Resident
If you have determined that you want to sell with an occupied property, it is very important to have a clear understanding with all parties involved and in writing the resident, the owner, the property manager, and the sales team. There are too many cases of .he said, she said. that have taken place while trying to sell resident-occupied properties and the seller ends up in litigation with the resident. Consult your property manager and sales agent on the right way to proceed and their roles during the listing period. It often helps to offer incentives to the resident, but be sure to give them after the resident cooperates. Contact us so that we can help you find the right solutions. Selling with an occupied property may be a worthwhile venture but it is important to approach it realistically.

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COMMUNITY ASSOCIATION DIVISION
HOA Board Meetings:  Creating an Effective Agenda

In our last issue we discussed how to plan the effective community association Board meeting and outlined the basics of a meeting agenda such as convening the meeting, approving minutes, reports from committees, unfinished business and new business.

In this issue we’d like to continue our discussion on the preparation for an effective Board meeting and utilizing agendas to keep the meeting organized and productive.  Here’s a couple of questions to consider when planning for the effective meeting of your Board of Directors:

Have you created an effective agenda?  There’s nothing more important to a successful meeting than a well-planned agenda.  At a minimum, a good agenda has a start and an end time for the meeting.  Knowing in advance when the meeting will end requires careful planning and a review of every item on the agenda.

Some Boards that have difficulty in keeping their meetings under 2 hours in length should consider a timed agenda.  Such scheduling is a good idea if you’re trying to rein in long meetings or have several controversial items to be considered.  If you do adopt a timed agenda, realize that the start and end points are locked in.  When the designated time for finishing an item arrives, the presiding officer announces that the allotted time has elapsed and a vote must be taken on the motion that was made on the issue.

Sample Timed Agenda
4:00     Call to Order
4:01     Approval of Last Month’s Meeting Minutes
4:02     Committee Reports
4:02     Landscape Committee
4:07     Pool & Clubhouse Committee
4:12     Architectural Committee
4:17     Treasurer’s Report
4:22     Unfinished Business
4:22     2009 Pool Contract Approval
4:27     Social Committee Funding Request Proposal
4:32     New Business
4:32     Management Report
4:37     Consideration of Landscape Maintenance Contract
4:42     Request From ACC to Change Landscape Guidelines
4:47     Adjournment

Should the presiding officer require agenda items in advance?  Some governing documents require that business items be submitted in advance.  Without question, it helps in planning the agenda to know if there will be one item or 10 items on the agenda.  Plus, allowing items to be brought up on the fly can lead to poorly thought-out motions.  We recommend that the presiding officer create the agenda and submit it to the remaining Board members in advance of the meeting and allow the remaining Board members to request items to be placed on the agenda.  The presiding officer will then grant the request and allocate the appropriate amount of time for the issue or deny the request.

Is every Board member prepared for the meeting?  In order for every Board member to be prepared for a productive meeting they need to receive information that is to be discussed at the meeting prior to the meeting so that they are able to read and research any issue that they have questions about.  The presiding officer should submit the agenda for the meeting at least one week prior to the meeting.

The Secretary should submit the minutes from the last Board meeting at least 3 days prior to the meeting so that Board members can read the minutes and make any suggested changes.  This allows the approval of the minutes to be completed with a simple motion instead of taking time to read the minutes during the meeting.

The Community Association Manager should submit any contracts or proposals that need to be voted on to all the Board members at least 3 days prior to the meeting so that the Board members can review the contract or proposal to be voted on.  Any other Board member or Committee Chairperson that has a contract, resolution, etc. that requires Board approval should have it distributed to all Board members at least 3 days prior to the Board meeting.

Getting information that is to be discussed at the meeting distributed to all Board members prior to the meeting will enable the Board members the opportunity to review the materials and come prepared to vote on each issue at the meeting.

In our next issue we will discuss how to run the meeting to insure that it is effective and timely.

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REAL ESTATE SALES DIVISION
First-time home buyers receive $8000 for home purchases in 2009!

It’s simple: if you have a job then you should buy a house!  No matter what area you’d like to live in, there are good buys on the market.  Don’t believe what the media has said, financing is still available.  There are even 100% financing options for those who qualify.  Yes, you’re read right!  If that isn’t enough, first time home buyers receive a tax credit of $8000 for purchases in 2009.  This isn’t a deduction, but a straight up credit to your bottom line.  Ask your accountant for more info but we wanted you to share some Frequently Asked Questions to get your wheels spinning.

Frequently Asked Questions
Q. How much is the credit?
A. The tax credit would be $8,000 or 10% of the purchase price, whichever is less.
Q. What type of purchase is eligible?
A. Similar to the $7,500 tax credit included in the Housing and Economic Recovery Act of 2008, the $8,000 tax credit included in the 2009 economic stimulus plan is available for the purchase of a principal residence by first-time homebuyers.
Q. Who qualifies for the first-time homebuyer credit?
A. According to the IRS, any taxpayer who has not owned a home during the 3 years prior to the date of purchase can qualify for the credit.
Q.And I really don’t have to repay the credit?
A. No. This is a change from the previous $7,500 tax credit. However, if the home is sold within three years of purchase, the credit will be reversed.
Q. Are there income limitations on the tax credit?
A. The tax credit begins to phase out for individuals with adjusted gross income over $75,000 ($150,000 for joint filers).

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PROPERTY MAINTENANCE DIVISION
24-Hour Maintenance at Your Service

Henderson Properties Maintenance Division is here to serve all of your needs. We offer a wide range of services including cleaning, painting, roofing, carpentry, locksmith services, lighting, HVAC, electrical, plumbing, appliance repair and install, as well as many other general maintenance items. For major repairs on your property, we get bids from various expert contractors to keep costs low and quality high. We can also perform inspections and offer recommendations to improve or preserve the condition of your property and potentially save you money by avoiding more costly repairs in the future.

Our focus is to help increase the value of your home or investment property through quick response, pro-active approach and attention to detail. Residents call us directly to report any needed repairs. We are there for you when you need us. We have technicians on call, 24 hours a day, to help with emergency situations. HVAC, Plumbing, Electrical and Appliance calls are given 24-hour service and all other maintenance requests are handled within 72 hours. Whether it is responding to resident requests, coordinating contractors, reporting and scheduling warranty work, completing repairs before your closing, or keeping your communities in tip top shape, we are your “Real Estate Specialists”. We can do it all with just one call!

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