November Edition

Capitol For Change Words Here has programs available to help fund energy improvements! Read inside for more info!

The 2021 Here Capital Words Gains Tax Rate Thresholds Are Out - What Will You Pay?

Fall EditionEdition November

Published by:

FEATURED ARTICLES Page: Election Day Is Coming Up - Make Sure You Get Out There And Vote!: November 3rd is fast approaching, get out there and vote!

6

Struggling Rental Market Could Usher In Next American Housing Crisis: A housing crisis centered on the vast apartment and home-rental markets is emerging in the U.S., threatening to send millions of renters into eviction and leave landlords short billions of dollars.

Vacant Home Insurance - Do You Need It?: Do you own a property that sits vacant for extended periods of time? What does your regular homeowners insurance cover?

8

10,000 Renters Will Get Help Paying Rent. Eviction Moratorium Extended Through End Of Year: Both tenants and property owners are getting hit hard by the pandemic and thus far have been given very little assistance to keep them afloat.

12

14

2

Page: Property Management 101: Tips & Tricks For Success: Educate yourself and prepare before stepping into your new role as a property manager by mastering some of these key areas.

16

The 2021 Capital Gains Tax Rate Thresholds Are Out - What Rate Will You Pay?: The tax rate that applies to your 2021 long-term capital gains will depend on your taxable income. What bracket are you under?

18

Financing Available For Energy Efficiency Upgrades: Capital For Change has programs available to help fund energy improvements! Read their article for more information!

20

3

Publisher’s Message “ Helping Property Owners Since 1994” - Bob De Cosmo, President

Bob DeCosmo began purchasing and managing rental real estate in 1982 and is a strong advocate for private property ownership right's in Connecticut.

Published by CTPOA Our goals; Educate our members on “Best Practices” for maximum efficiency.

Increase profitability by lowering operating expenses via vendor discounts.

Provide access to “Core Services” needed to better manage and maintain properties.

There’s a lot going on in our state in relation to the COVID-19 pandemic but everyone should vote in this year’s election.

Voting provides an opportunity for change and has a direct impact on both your finances and everyday life. It’s not something you should ignore and Democracy is not a spectator sport.

Get out to the polls on Nov 3rd or cast your absentee ballot! Don’t pass on the election if you’re not a fan of the candidates for President, there are local elections that your voice should be heard in. If you don’t like what’s going on in your city, vote for the candidate that can change it!

Hopefully we can all make a positive change in both the State of Connecticut and the Country.

Everybody stay safe!

4

5

Election Day Is Coming Up - Make Sure You Get Out There And Vote!

Election Day is on Tuesday, Nov 3, 2020 and the polls will be open from 6 AM to 8 PM. Make sure you are registered to vote! You can click here to make sure you are, and you can also find your polling location.

What offices are we voting for this year?

As we all know, this year is a presidential year. This means voters will choose who they want to be the next president and vice president of the United States.

Many people this year are voting via absentee ballot. The Secretary of State Denise Merrill has predicted at least 50 percent of the votes cast this Locally, Connecticut voters will also decide their congressional year will be by absentee ballot. representative. We have five congressional districts in our state This is the first time that all voters are and all five are up for grabs this year. eligible to vote by this method. The absentee ballot must be mailed in or It is also an election year for dropped off at an official ballot box which can be found outside both city Connecticut’s House of Representatives and State Senate. and town halls. They need to be placed by 8 PM on Election Day, November 3rd.

6

To view the state’s full plan, click here.

Regardless of who your candidate is - get out there and VOTE!

Who is on my ballot?

You can view your ballot here.

Who are my elected officials?

You can view your elected officials here.

Connecticut has taken precautions to keep both voters and volunteers safe at the polls.

"No Connecticut voter should ever have to choose between their health and their right to vote. This plan is designed to ensure that Connecticut’s elections will be safe, secure, and accessible to every eligible voter who wants to participate. Connecticut’s elections must go on, so I urge everyone who can to participate" Secretary of the State Denise Merrill.

7

Struggling Rental Market Could Usher in Next American Housing Crisis - Article By: Will Parker, realtor.com A housing crisis centered on the vast apartment and home-rental markets is emerging in the U.S., threatening to send millions of renters into eviction and leave landlords short billions of dollars.

A large number of renters have been unable to pay some or even all of their rent since March, when the pandemic temporarily shut down most businesses.

Many businesses remain closed or only partially open, pushing renters into unemployment and draining their savings.

last week by the Federal Reserve Bank of Philadelphia calculated outstanding rent debt would reach $7.2 billion before the close of 2020. Moody’s Analytics estimates that it could reach nearly $70 billion by year -end if there is no additional stimulus spending. The economic-research firm calculated that 12.8 million Americans would then owe an average of $5,400 from missed payments.

Federal and local eviction moratoriums have protected many of them from losing their homes if they missed payments during the pandemic. But the national eviction ban and some state and city protections are set to expire by January or sooner. Renters will then be on the hook for months of missed payments, which even those who have jobs could struggle to pay.

Even the larger figure would be far less than what was lost when the $1.3 trillion subprime-mortgage bubble burst, leading to a national wave of defaults and foreclosures. But the tens of millions of people potentially caught in a web of homerental debt and eviction would far exceed the 3.8 million homeowners who were foreclosed on in 2007-2010.

Estimates of total outstanding rent debt vary widely. Yet by any measure, the fallout from missed rent payments is bound to imperil a large swath of the U.S. population and wash over the broader economy.

Mounting rental debt could also impede the path to a U.S. economic recovery, when 30 million to 40 million people from New York City to San Francisco face potential eviction once moratoriums expire, according to estimates cited by federal government officials.

A study of unemployed workers released

8

“These households will have to make some pretty massive financial choices and pull back on other spending to pay their rent,” said Mark Zandi, Moody’s chief economist.

“That’s a hit to the economy.”

landlords are charging punitive late fees on top of what is already owed, making the debt higher than just the face value of the rent.

In the early weeks of the pandemic, many renters tried to scrape together their rent by borrowing money from friends or family. Some moved to credit cards, which could mean the total debt tied to rent is greater than what can be counted from missed payments alone.

Credit payments to small and medium-size businesses connected to rental real estate increased by more than 70% in the spring, according to the Philadelphia Federal Reserve. The data showed that through the fall these payments have remained some 50% higher than during the same period in 2019.

Kate Bulger, a financial counselor specializing in housing debt at the Money Management International counseling firm, said the number of tenants she works with who report putting payments on credit cards has exploded. This shift of debt from landlord to plastic can harm renters’ credit long term, Ms. Bulger said, by using too much of their available credit line, which can lower scores.

While many landlords have let tenants continue to occupy units without paying all of their rent by establishing payment plans, there are doubts about how many tenants will ever be able to pay back all of what they owe.

“Am I concerned that some tenants will leave me holding the bag? Yes,” said Robert Nelson, a New York City landlord who owns middle-income apartment buildings. “But what choice do we have?”

“Even if now they are able to make their rent payment,” she added, “that huge inflation to their credit-card debt has become a new threat to their budget and their ability to cover all their expenses.”

Other renters falling behind are now on payment plans arranged with their landlords, allowing them to pay small minimum amounts each month. Some

9

10

11

Vacant Home Insurance: Do You Need It? What Does It Cover? - Article By Investopedia

Homeowners insurance is designed to protect your primary residence against financial losses associated with theft, fire, and other covered perils. If you own a home that sits vacant for extended periods of time, you may be wondering whether your policy will still cover the property if damages occur. It’s possible that your standard policy may not be sufficient to cover a property that isn’t being lived in.

You may need to purchase a vacant home insurance policy to fill a coverage gap.

What Is Vacant Home Insurance?

The amount of time required for a home to be considered vacant can depend on the insurance company. For instance, some insurance companies may deem a home to be vacant if no one lives in it for at least 30 days. Other insurers may extend this to 60 days or more before a home is considered vacant.

Important: Insurance companies

distinguish between unoccupied homes and vacant ones. A home is considered unoccupied, rather than vacant, if your personal belongings are still inside and you could return to live in it any time.

Your policy should spell out a complete list To understand whether you need vacant of covered perils while also mentioning any home insurance, it helps to know what it is exclusions from coverage. Vacant home and when it may be necessary. Vacant home insurance can cover the most essential insurance can be purchased as its own policy types of damage that could occur when no or as an add-on endorsement to an existing one is living in a home, though it doesn’t homeowners insurance policy. It is designed cover everything. For example, you may to protect homes that are vacant for an need to purchase flood extended period of time. This is different from insurance separately if the home is located traditional homeowners insurance, which in a flood plain. covers you for as long as you own and live in the home.

12

Vacant home insurance policies can come with flexible terms ranging from three to 12 months, depending on the insurer. Your insurance company may have specific guidelines regarding the types of homes that can be covered. For instance, you may be able to get vacant home insurance for up to a four-unit dwelling or be limited to insuring a single-family property. Insurers take into account how the home is being used and why it’s sitting vacant, as well as its age, overall condition, and estimated replacement value.

Who Needs Vacant Home Insurance?

Vacant home insurance is typically something you only need in specific situations in which a home you own will be empty for an extended period of time. Some of the situations that may require vacant home insurance include: •

Selling a home that you no longer live in because you’ve moved into a new property

• Owning a rental property that sits vacant A vacant home represents a higher risk to during the off-season insurance companies versus a home that’s being occupied full time. That’s because with • Performing extensive renovations or no one there to keep an eye on the property, repairs on a home that make it temporarily it’s more likely that damages related to inhabitable vandalism or other mischief could occur. And without someone performing regular • Being hospitalized for an extended period maintenance and upkeep, the risk of water of time for medical care and fire damage also increases. Needing vacant home insurance for an older property • Owning a vacation home that you only use or one that wasn’t maintained properly before a few months out of the year you bought it could increase your risk profile and your premiums.

You may also need vacant home insurance

if you’re on active duty military service or traveling for an extended period of time.

Remember, though, for the home to be considered vacant, it typically means that it has to be completely emptied of all personal belongings.

13

10,000 renters will get help paying rent. Eviction moratorium extended through end of year.

BY - JACQUELINE RABE THOMAS, CTMIRROR The state will spend another $20 million to only two families six months into the help those struggling to pay their rent

pandemic – the state’s rental assistance

during the economic downturn brought on program stopped accepting new

by COVID-19, Gov. Ned Lamont

applications almost five weeks ago.

announced Wednesday.

To clear the applicant logjam, the state has “I’m trying to get people back to work and

quadrupled the number of staff members

children back to school, and having a

processing the existing applications and

home you can call your own is a critical

will “streamline the application process,” a

foundation for making that happen,” said

state Department of Housing official said. It

Lamont. “Tenants who can pay their rent

wasn’t immediately clear what changes

on time should do so, and landlords and

were made to speed up the process

tenants should work together to develop

except that renters and landlords will be

reasonable payment plans for these

able to apply online.

extraordinary circumstances,” he said.

He also extended his eviction moratorium

Once these changes are fully

to the end of the year.

implemented, the state expects to again begin accepting applications in mid-

Faced with a backlog of 7,400 families who October. It has until the end of December qualified for help – and having helped

to spend these federal funds.

14

A survey of landlords in late May conducted by the governor’s program, a number that was whittled down office concluded that, without intervention, state eviction rates were likely to jump to 7,375 through the pre-approval from 4% in the typical year to 7% this process. The $20 million the state initially year. earmarked for rental assistance was only Nearly 30,000 people have applied for the

enough funding to provide $4,000 to roughly 5,000 households. People seeking to apply for the aid initially faced a

busy signal or a long wait to get through, and the program stopped taking applications Aug. 28, just six weeks after it opened.

“We paused intake because the program was slow. This allowed us to redesign it and increase staff capacity in anticipation

of additional funding. I’ve always maintained to stakeholders that we are evaluating the program on an ongoing

Twenty percent of tenants in Connecticut are behind on rent, the U.S. Census Bureau reported Sept. 9. That’s almost 100,000 renters. Women, Black and Hispanic people, and those living in the state’s largest cities are disproportionately affected by the economic downturn and the resulting housing crisis. Renters typically earn less than half that of homeowners.

basis. The revisions that we’ve identified

A coalition of housing advocates from the

are a direct result of those evaluations,”

group Home Connecticut estimates that

said Connecticut Housing Commissioner

between $400 million to $1 billion is

Seila Mosquera-Bruno said.

needed to stem the expected eviction crisis.

With the additional $20 million, an estimated 10,000 renters overall will receive aid. That’s an additional 2,625 households who aren’t already in the queue.

15

Article By: RentFaxPro The average cost of tenant turnover runs between $2,500 to $3,500 depending on the area you live in, according to FRE Real Estate and Property Management. Keeping tenant turnover low and maintaining a quality property is the focus of any property manager. But wading through the endless details of keeping a property running smoothly can choke your new career before you get started. Educate yourself and prepare before stepping into your new role as a property manager by mastering some of these key areas.

Become a Jack of All Trades Get your office in order and be prepared to do everything from light maintenance to accounting and sales. First, protect yourself and your own assets from predatory tenants and clients by monitoring your finances and credit. A service like LifeLock can help monitor for identity theft and stop it before it starts. Next, learn how to balance books and predict cash flow to stay on top of the financial health of the properties you manage. Invest in a quality toolbox to fix faulty door knobs and appliances, and look for new opportunities to advertise rentals from college bulletin boards to regional websites.

16

Find the Right Tenants Setting yourself up for success starts the moment you look for a new tenant. Take the time to find the right renters the first time to keep turnover low and protect your cash flow. Ask for previous landlord references to establish a history of on-time rent payments and what type of tenants they were. Require a small non-refundable deposit for an application and background check to look into their credit history, criminal record and any evictions. The fee and procedure will scare off unscrupulous tenants and weed out those who are just casually browsing the market for rentals.

Know the Law There’s no substitute for intimately understanding the rental and real estate laws from the start. Both the landlords you work with and their tenants will expect you to have answers to a wide variety of issues from maintenance repairs to settling disputes and what it takes to break a lease. Study the latest information about tenancy agreements and eviction notices in advance.

Refrain from using unlicensed contractors for electrical work and plumbing that could be illegal in your area as well as hold you liable with the insurance company if an accident occurs.

Create Consistent Procedures Establish a clear and consistent procedure for various property issues from how to handle maintenance requests to a tenant dispute. Tenants need to know what to do when an appliance breaks or when they want to raise a complaint with management. Set-up a separate email address to communicate with tenants, draw up request forms or use an online help ticketing system to address issues. Create a checklist for yourself on the steps to address various problems until you’re confident in the process. Use an app like Evernote to keep track of your checklist and add new procedures as needed.

Foster Relationships Whether you’re working with tenants or landlords, property management is a relationship business. Take the time to foster those relationships by approaching your job with confidence and respect. Showing integrity and care in your work trickles down to happy tenants with lower turnover. Anticipate your landlord’s needs and create a streamlined system for knowing when there’s an issue from late rent to maintenance before your client does.

17

The 2021 Capital Gains Tax Rate Thresholds Are Out - What Rate Will You Pay? Article By: Rocky Mengle, kiplinger,.com The tax rate that applies to your 2021 long-term capital gains will depend on your taxable income.

If you sell stocks, mutual funds or other capital assets that you held for at least one year, any gain from the sale is taxed at either a 0%, 15% or 20% rate. Those tax rates for long-term capital gains are typically much lower than the ordinary tax rates you'd otherwise pay, which can be as high as 37%.

However, which one of those capital gains rates – 0%, 15% or 20% – applies to you depends on your taxable income. The higher your income, the higher the rate.

The taxable income thresholds for the capital gains tax rates are adjusted each year for inflation. The IRS has already released the 2021 thresholds (see table to the right), so you can start planning for 2021 capital asset sales now.

Tax on Net Investment Income There's an additional 3.8% surtax on net investment income (NII) that you might have to pay on top of the capital gains tax. (NII includes, among other things, taxable interest, dividends, gains, passive rents, annuities and royalties.) You must pay the surtax if you're a single taxpayer with modified adjusted gross income over $200,000 or a married couple filing a joint return with modified AGI over $250,000.

18

Will There Be Changes to the Capital Gains Tax Rates?

Depending on the outcome of the 2020 presidential election, we very well may see changes to the capital gains tax rates in the near future. If elected, Joe Biden says he wants to eliminate the favorable tax rates on capital gains for anyone making over $1 million.

President Trump, on the other hand, says he will cut taxes on capital gains if he's reelected. First, look for him to eliminate the 20% rate so that the top tax rate on longterm capital gains is 15%. He has also called for indexing capital gains for inflation, which means you pay the capital gains tax on a smaller amount.

Capital Gains Tax Rate

Taxable Income (Single)

Taxable Income (Married Filing Separate)

Taxable Income (Head of Household)

Taxable Income (Married Filing Jointly )

0%

Up to $40,400

Up to $40,400

Up to $54,100

Up to $80,800

15%

$40,401 to $445,850

$40,401 to $250,800

$54,101 to $473,750

$80,801 to $501,600

20%

Over $445,850 Over $250,800 Over $473,750 Over $501,600

19

Capital For Change, Inc. (“C4C”), in partnership with CT Green Bank, is pleased to continue to offer its Loans Improving Multifamily Efficiency (“LIME”) product to property owners in Connecticut. The LIME program has recently been revamped to expand eligibility for low-cost, flexible financing to every 5+ unit residential property in the state.

LIME loans are structured to be repaid out of projected energy and operations savings, and many borrowers have been able to close with no money down. In this way, positive cash flows to the property manifest immediately, as opposed to having owners pay out of pocket and waiting years for the improvements to pay for themselves. Increases in net operating income lead to higher valuations for properties, and LIME borrowers have seen improved properties generate more than $1,000,000 in profits upon sale.

20

If you are looking to improve the energy efficiency and financial bottom line of your property with any of the following measures, the LIME loan may be an easy way for you to improve cash flows and make your property more attractive to tenants.

• Heating and cooling systems • Hot water systems • Building envelope measures, including windows and insulation • Lighting and appliances • Water efficiency • Alternative energy systems (solar PV, fuel cells, solar thermal, and others) • Conversions from oil or electric heat to natural gas • Qualified health and safety measures, including roofing In addition, if you are not sure which systems at your property are due for an overhaul, but know that you are paying too much for energy, C4C offers free, no-obligation opportunity assessments to determine whether or not a project is viable.

The LIME loan product has been administered by C4C since 2013. Over the last seven years, C4C has closed 30 LIME loans for roughly $13.5MM, ranging in size from $25,000 to $3.5MM. 2,147 units have been improved with LIME financing at average cost of $7,909 per unit.

The LIME program relies in part on the Connecticut utility companies’ energy efficiency rebate process, incorporating their energy savings calculations into its underwriting, and leveraging rebates to fund HVAC systems and offer more substantial loan packages for broader and deeper energy-saving measures. The LIME program also includes free life-of-loan performance monitoring to track project savings.

The LIME loan does not require a first mortgage or priority security interest in the subject property, but rather allows for flexible security options. This allows LIME to become subordinate to your first mortgage, which is an attractive proposition to your banker.

For more information, contact Matt Liebel at (203) 789-8690 ext. 1240 or mliebel@capitalforchange.org.

21

22

23

24

What’s Happening Near You? The Statewide Events and Meetings calendar is a resource for local landlords and property owners to meet up, network and grow your real estate opportunities.

Get Involved, Stay Informed.

25

November Sun

Mon

Tue

Wed

Thu

Fri

Sat

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Update On Future Events.

Due to COVID-19 our in-person events are very limited due to current restrictions in place by the Governor. If you or your organization is hosting an event or virtual meeting please let us know by emailing us at media@ctpoa.com and we will put you into the Event Calendar. Stay safe!

26

December Sun

Mon

Tue

Wed

Thu

Fri

Sat

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

27

28

A special thank you to our participating REALTOR Boards for circulating CT Real Estate Today to their members.

29

CT Real Estate Today allows you to hit your target audience for all things real estate.

Contact us at

Becom

info@ctpoa.com

The Connectic of experienced p working together

ADVERTISE WITH US!

Fol

30

me a CTPOA Member Visit: https://ctpoa.com/

cut Property Owners Alliance is composed property managers, REALTORS and landlords to improve the business conditions for rental property owners.

llow CTPOA: https://www.facebook.com/CTPOA/

31