shared post from Class A Management

Healthy in 2014. That’s the report from Fannie Mae on what’s to be expected of the Multifamily Property Market in the coming year. It’s a trend we saw in 2013, even at times when it was least expected. In fact, the Federal National Mortgage Association reported continued rent growth and sustained occupancy levels through the end of the year, a time when both have a tendency to dip.

Keeping with the trend, Fannie Mae says 2014 holds much of the same, with both tenants and property owners demonstrating a continued demand for the industry. The best news? Looking at the graph provided by the agency, vacancies from now until 2018 are predicted to see very little change, with the first multi-year sustained vacancy rate since 1995.

What’s the Driver?

Wondering about the source of this trend? Job growth, of course, takes the bulk of the credit. The following numbers have been forecast by Fannie Mae’s Economic & Strategic Research Group:

• 6.4 percent unemployment rate by the end of 2014
• 1.9 percent increase in nonfarm payroll in 2014 and up to 2.0 percent in 2015
• An increase in household formations is expected to increase demand for rental units

Some More than Others

As Fannie Mae details—and from what we know to be true—not all areas of the country have seen or will continue to see this positive trend. In fact, particular areas of the country that ‘carrying’ others—bringing up the average for the whole.

What’s interesting is comparing the metropolitan areas expected to see positive job growth with those that aren’t. For instance, Cleveland, St. Louis, Detroit, Philadelphia, Boston, and Washington, D.C. are forecast to miss the mark on unemployment. This is while areas such as Austin, Houston, Dallas, Orlando, Louisville, Palm Beach, and Portland make the top of the list for most promising economies.

To owners and managers in the aforementioned cities expected to see growth, the question is clear: How are you going to differentiate your property to ensure your piece of this action?

by Thomas F. Scanlon, CPA, CFP®

Subchapter S corporations (“Sub S”), partnerships, limited liability companies (“LLC’s”) and estates and trusts issue form K-1′s. This form documents the stockholders, partners, members or beneficiaries share of their profit or loss from the entity. Don’t wait for this form to get started on your income tax return.

1) K-1′s Aren’t Due Until April 15th

All form K-1′s except for Sub S corporations are not due until April 15th. Sub S corporation K-1′s are due on March 15th. If the Sub S corporation files an extension however, then the K-1 does not have to be issued until September 15th. This April 15th due date makes it very challenging for taxpayers. Their individual income tax return is due the same day. You can’t file your individual income tax return without your K-1′s.

2) We Are Seeing More Amended K-1′s

Investing in limited partnerships, particularly oil and gas that issue K-1′s has become popular again. Just like amended 1099 forms, we have seen an uptick in the amount of amended K-1′s last year. The changes on the amended K-1 may or may not be material. Either way, your CPA will need to review the amended K-1.

3) Let Your CPA Get Started on Your Tax Return

This is key. Get all of your other tax material you have to your CPA. Let them get started. They can rough out the return. This will give you a sense of where you are at. Get the heavy lifting done up front. If you are timely your CPA should have the return good to go. Just add the information from the K-1 and the return should be complete.

4) You May Have to Go on Extension

The 2013 individual income tax return, Form 1040, is due on April 15, 2014. If you can’t file on time because you did not receive your K-1 timely, you will need to file an extension. This is done on Form 2848, Application for Automatic Extension of Time to File U.S. Income Tax Return. A properly filed extension request will extend the due date to file until October 15, 2014. The extension only extends the time to file the return. It does not extend the time to pay any tax due. Any tax due needs to be paid by April 15th. Failure to pay the tax then will result in interest and penalty.

Thomas F. Scanlon, CPA, CFP® is with Borgida & Company, P.C., Certified Public Accountants in Manchester, Connecticut, celebrating 44 years of tax, advisory and accounting services. Please call (860) 646-2465 or email toms@borgidacpas.comif you would like more information.

American Apartment Owners Association | Company Website | Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

Last year Worcester Investments purchased its first student housing complex near the University of Kansas. Since this was a little different for us, we wasted no time getting down to the facts. While conducting market research on our student housing investment, we found a few interesting statistics that might make you consider expanding your own investment strategy.

Why More Students are Opting to Live Off-Campus than Ever Before

• The National Multi-Housing Council (NMHC) stated that in 2010 school-owned housing facilities could only accommodate about 30% of the enrolled student population.
• The cost of room and board at a public 4-year university is up 20% from five years ago; private 4-year universities charge 14% more than 5 years ago.
• The average full-time undergraduate enrolled in a public four-year college receives enough grant aid to cover a significant portion of tuition and fees, but not to cover any other expenses. Let’s break that down. If the average net price of tuition and fees is $3,120, that means the student is left with a net out-of-pocket cost of $9,500 for room and board.
• According to the National Center for Education Statistics, national college enrollment is projected to increase by approximately 2.3 million by 2020.