2024 Home Leasing Guide by Skybox Realty

Skybox Realty

Home Leasing Guide 2024

Table of Contents

The Leasing Process

4-7

Prepare Your Home

10 - 11

Rights & Responsibilities

12 - 13

Property Management

14 - 15

Frequently Asked Questions

16 - 17

Tax Considerations

20 - 21

Move-In Checklist

22 - 23

Paul Hwang

24 - 25

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com

Table of Contents

Leasing Process

The Leasing Process This graphic illustrates a typical example of the leasing process from start to finish.

FIRS T S TEPS

Initial Consultation

Preview Home

• • • • • •

Understand objectives, priorities, & time frames Discuss leasing process overview Examine local rental market conditions Define agency relationship Define how we will work together Skybox typically charges 8% of the annualized lease for tenant procurement

•

Preview the home to create maintenance checklist Is the home currently tenant occupied? If so, discuss showing schedule & preferences with the current tenant

•

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com

Leasing Process

• • •

PREPARE HOME

Maintenance

•

• •

Photography

Make necessary repairs Fresh coat of paint, if needed Full move out cleaning after previous tenant or owner, if needed Skybox coordinates with all appropriate vendors to ensure a smooth, stress free process

We schedule & coordinate photography with a professional We don’t believe in DIY photography, even for rentals

Leasing Process

• •

MARKE TIN G

Advertising

•

• •

Client Database

•

We have 25+ web partners to help market your home to the largest pool of tenants Combination of traditional & digital marketing channels Well designed content

We post your home on the Top Agent Network Send to potential tenants in our client database Share with other Skybox agents

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com

Leasing Process

•

LEAS ING & MOVE -IN

Showing

Qualifying

Leasing

• • •

Can show your home in minutes from our staffed, South Beach sales office Private, showings with all prospective tenants Show until we find a qualified tenant Coordinate showings with existing tenant, if applicable

• • • •

Review applications Verify employment & income Check credit & references Provide general feedback and impressions of each prospective applicant

•

Draft lease paperwork and building specific rental rules and documents Send necessary paperwork to the HOA Coordinate keys & move-in Schedule move-in/move-out inspections Follow up to negotiate lease extensions, etc. as needed going forward if opted-in to property management

• • • •

Home Leasing Guide

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com

Home Leasing Guide

Prepare Your Home

Prepare Your Home For Leasing To secure the highest quality tenants and maximum rental return, your property needs to be presented in its best possible condition. A quality property will attract a quality tenant.

HOM E MAINTENANC E Several home maintenance items should be considered before leasing your property. We can coordinate all appropriate vendors to have these repairs done efficiently and cost effectively. 1. Appliances & Fixtures: Are all appliances in working order? It is best to make any necessary repairs to appliances and fixtures before a tenant moves in to save time and money. Additionally, replacing filters in fridges and HVAC units is also recommended. 2. Paint: A fresh coat of paint makes a world of difference when marketing a property and is thus a recommended step. 3. Lighting: Make sure older lightbulbs are replaced so you don’t have to do it right after a tenant moves in. 4. Blinds: Tenants always ask for blinds, particularly in highrise units. Consider installing them before a tenant moves in. 5. Alarms & Detectors: Make sure smoke alarms and carbon monoxide detectors are installed and in working condition. 6. Personal Property To Be Included: It is important to clearly identify all personal property that will be included in the rental, if any. These will be outlined in the lease as well. 7. Cleaning: A thorough move-out cleaning is needed before a tenant moves in. This includes cleaning inside all appliances and cabinets.

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com

Prepare Your Home

Rights & Responsibilities

Rights & Responsibilities A lease agreement spells out each party’s obligations during the tenancy. There are responsibilities each party must adhere to by law.

T HE LA NDLORD IS T YPICALLY RES PONS IBLE FOR • • • • • •

Following all local housing codes and other rules specific to a building’s HOA (CC&RS, Rules & Regs, etc) Making sure the property is clean, safe, and sanitary Conducting repairs in a timely manner Following lease responsibilities, such as maintenance of appliances Water & garbage utility costs - if a condo, this is usually already covered by your HOA payments Property management fees, if applicable

T HE T E NA NT IS T YPICALLY RES PONS IBLE FOR • • • • • • •

Following the terms of the lease agreement Following all building specific rules & regulations Paying rent on time Taking reasonable care and maintaining cleanliness of the rental property Not disrupting the neighbors or causing problems within the building Electricity, cable & internet utility costs Properly disposing of trash

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com

Rights & Responsibilities

Property Management

Property Management Separate from tenant procurement, property management covers ongoing maintenance on your property after tenants have moved in. As buildings and homes begin to age, more problems begin to arise.

P ROP E RT Y MANAGEMENT Skybox offers property management as a non contractual courtesy for the first 30 days after a new tenant moves in if Skybox was hired for tenant procurement. For continued property management, the subsequent months cost either $179 or $259 per month, depending on the rent rate. Request our pricing sheet for specifics. Below is a list of items that property management can help with. •

Plumbing Issues: This can include leaks, replacing garbage disposals, unclogging sinks, replacing toilet flappers, tightening or replacing fixtures, etc.

•

Appliance Issues: This can include repairs, diagnostics, and coordinating of purchasing and installing replacements

•

Window Treatments: Scheduling repairs, schedule steam cleaning, or coordinating design and install of new window treatments

•

Flooring: Professional steam cleaning or spot repairs on both hardwood and carpets. Replacing hardwood or carpet flooring if needed.

•

HVAC: Scheduling servicing and replacement of hvac units, filters, etc as needed

•

Electrical: Bulb replacement, fixture install, light switch repair/upgrade .

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com

Property Management

FAQs

Frequently Asked Questions The following are the most common questions we receive in regards to leasing property.

WHAT ARE YOUR FEES ? Our typical rental commission fee is 8% of the annualized lease, about one month of rent. This fee is only payable after we find a suitable tenant. If you opt-in to our optional property management services, extensions or renewals for the same tenant are included. We cover all our marketing costs including high quality photography for all our rental listings.

HOW LONG WILL IT TAKE TO RENT MY PROPERT Y? In our experience, properties that are well presented, professionally marketed, priced according to market conditions, and represented by a professional agent, will stand out from the crowd and will therefore attract a quality tenant faster. Seasonality is also a consideration, so we recommend trying to avoid starting a lease during the holidays.

HOW DO YOU QUALIFY TENANT S ? We look for tenants that make enough money to adequately cover the rent and that will maintain your property. To do this we have a comprehensive application, verify income & employment, check credit and references, and make sure they are in good standing with past landlords.

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com

FAQs

WHE RE DO YOU ADVERTIS E? We have over 25 web partners and your home will be posted and syndicated through their networks. We have found the best success with posting on our website, on the MLS, on craigslist, on Zillow & Trulia, on Zumper, on building specific boards, on the Top Agent Network, among others.

WHO PAYS WHAT? The tenant is responsible for paying cable, internet, and electricity utility fees in addition to any move-in/move-out fees associated with the HOA. The landlord is responsible for paying their monthly HOA dues as well as their normal mortgage and property tax payments.

WHAT IF I WA NT TO S ELL THE PROPERT Y? You are still entitled to sell your property with a tenant. The standard California lease states the landlord can sell the property and can show the property with minimum 24hrs written notice to the tenant. We maintain open communication with the tenants to streamline this process and coordinate showings for minimum disruption. Should the property sell with the tenant, the lease will pass over to the new owner.

DO I NEED INS URANC E? A condo building requires a homeowner to carry insurance, since your association’s policy will not cover your belongings or provide you with personal liability coverage if someone is harmed inside of your residence. HO-6 is a good option. In addition, we include in all our leases that the tenant is required to carry renter’s insurance for the duration of the lease.

Tax Considerations

Tax Considerations There are tax benefits to rental / investment properties. Rental property isn’t subject to self-employment tax like other home businesses unless you’ve formed a corporation. Here are some tips for maximizing your return on your taxes.

WHAT CAN YOU C LAIM? • • • • • • • • • •

Repairs & maintenance / painting of the home between tenants Cleaning of the home between tenants Advertising & marketing fees Property insurance Property tax Legal expenses Skybox commission fees + property management fees Utility expenses (water, garbage) Mortgage Interest Depreciation due to wear & tear

WHAT IS A 10 31 EXC HANGE? The term 1031 Exchange is defined under section 1031 of the IRS Code. To put it simply, this strategy allows an investor to “defer” paying capital gains taxes on an investment property when it is sold, as long as another “like-kind property” is purchased with the profit gained by the sale of the first property. To qualify for a 1031 Exchange, a property must have been a rental property for at least two years. Contact your CPA for more information.

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com

Tax Considerations

WHAT IS A DEPREC IATING AS S ET? A depreciating asset has a limited effective life and can reasonably be expected to decline in value over the time it is used. Contact your CPA to discuss specifics in the case of your property. Some examples are: • • • • • •

Floor coverings Heating & cooling Appliances Hot water systems Lights Many more!

Home Leasing Guide

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com

Home Leasing Guide

Move-In Checklist

Move-In Checklist Moving can be a stressful time, we recommend that you prepare for your move as soon as possible. Below is a checklist of recommended steps to ensure that your move-in goes as smoothly as possible.

Be fo re Yo u L e ave

☑ • • • •

A DDRES S C HANGE NOTIFICATION Post Office Forwarding Address Subscriptions Friends & Relatives Bank & Other FInancial Institutions

INS URANC E, S ERVIC ES & REC ORDS Notify Insurance of new address for coverage Gas, electric, water, phone, cable, garbage, Internet, newspaper, etc. Ask Doctors for referrals / transfer prescriptions, eyeglasses, etc. Obtain Birth Records, Medical Records, etc.

MOVING C OMPANY Make arrangements with a moving company Clean rugs or clothing before moving / have them moving wrapped Check Insurance coverage, labor cost for packing / unpacking, method and time of expected payment Plan for special care needs of infants or pets

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com

Move-In Checklist

On Mov i ng Day

☑ • • • • •

A f te r Th e M ove

☑ • • • • • •

• • •

THINGS TO REMEMBER Carry jewelry & documents on your person Double check closets, drawers, and shelves for items left behind Plan for transporting pets Coordinate leaving old keys with new owner / tenant Carry cash for unexpected costs during the day

AT YOUR NEW ADDRES S Check if service is switched on for telephone, Internet, cable, gas, electricity, water, garbage, etc. Check pilot light on stove, hot water heater, and furnace Check if appliances are working Notify DMV of new address update for your driver’s license Visit city offices and re-register to vote Register car within five days after arrival in state to avoid penalty (only for those moving from another state or country) Apply for a driver’s license in your new state (if applicable) Register children in school Arrange for medical services: doctor, dentist, vet, etc.

Paul Hwang

Paul Hwang Paul is the #1 Ranked Agent in the South Beach area for 14 years running. Other brokers and potential buyers call Paul daily with new inventory, giving him a unique advantage in a competitive market.

T ES TIMONIALS “I have sold many homes in my life and Paul Hwang is the best I’ve ever dealt with. His advice and responsiveness are unsurpassed. He went above and beyond in every way and his staff did the same creating great marketing brochures to help with my sale - even the sale of my furnishings. I would recommend Paul and his team without reservation.” Becky “Paul doesn’t just know the market for high end condos in SF, he is the market.” - Isaac “Paul is indisputably the most experienced broker (sell or buy-side) at The Infinity in San Francisco. And a very good, ballsy price-setter and negotiator. At the end of the day, a broker/salesperson is easy to rate do they get the deal done on good terms - and so it’s easy to give Paul top marks everywhere.” - Steve “Paul is hands-down the best broker in SoMA / South Beach.” - Peter

Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com

Paul Hwang

T HE INFINIT Y

LUMINA

22 Homes Leased in 2023

4 Homes Leased in 2023

M E TROP OLITA N / ONE RINCON

MIS C OTHER S F C ONDOS

9 Homes Leased in 2023

20 Homes Leased in 2023

Paul Hwang / Ranked #1 in South Beach 415.216.8746 | BRE 01371169 paul@skyboxrealty.com www.paulhwang.com | 流利國語