Renters insurance is the protection every renter needs. This type of insurance will protect you in the long run against many perils. Insurance companies offer many benefits with this type of policy. The renters insurance policy typically protects you from huge medical bills in the event that someone gets injured in your apartment with liability coverage. It also covers your personal property in case of a fire or theft. The most important thing to get when you've settled into your new house or apartment is to obtain a renters insurance policy.

The biggest misconception that most renters have is that the landowners insurance policy will cover them and their personal belongings in the event of a disaster. This is not true. The homeowners insurance that your landlord carries will only protect the structure and the homeowner's personal property not yours. In fact, many landlords now require their renters to carry a renters policy. This way, if the renter does damage to the property such as damage to windows, walls, or carpeting the renters insurance policy will pay the landlord for the damages.

Renters insurance is very affordable and well worth looking into.

WASHINGTON Feb. 13, 2012 "Taxation with representation ain't so hot either." Gerald Barzan, humorist

If you own investment property, and you sell it this year, you will have to pay 15 percent capital gains tax to the Internal Revenue Service.

This does not include the up-to-25 percent recapture tax on any depreciation that you took over the years. Next year, unless the Supreme Court throws out the new health-care law, the tax rate will be 18.8 percent.

Why? Because of a special 3.8 percent Medicare surtax on unearned income, which includes the sale of rental properties and even your second home at the beach. This will kick in Jan. 1.

There is a way to defer your tax obligation. It is called a Starker exchange, named after a man who successfully convinced the courts that based on the exchange of real estate, no tax was immediately due.

The law establishing this like-kind exchange can be found in Section 1031 of the Internal Revenue Code. The rules are complex, but here is a general overview of the process.

Section 1031 permits a delay (non-recognition) of gain only if the following conditions are met:

First, the property transferred (the "relinquished property") and the exchange property ("replacement property") must be "property held for productive use in trade, in business or for investment." Neither property in this exchange can be your principal residence, unless you have abandoned the property as your personal house.

Second, there must be an exchange; the IRS wants to ensure that this is not really a sale and a subsequent purchase.

Third, the replacement property must be of "like kind." As a general rule, all real estate is considered "like kind" with all other real estate. Thus, a farm can be exchanged for a condominium unit, a single-family home for an office building, or raw land for commercial or industrial property.

There are some tax consequences. If you do a like-kind exchange, your profit will be deferred until you sell the replacement property. However, the cost basis of the new property in most cases will be the basis of the old property. Discuss this with your accountant to determine whether the savings by using the like-kind exchange will make up for the lower cost basis on your new property.

A simple exchange (A and B swap properties) rarely works. Not everyone is able to find replacement property before they sell their own property. In the case involving Starker, the court held that the exchange does not have to be simultaneous.

However, it is not an open-ended interpretation. There are two major limitations:

• The replacement property must be identified within 45 days after you transfer the "relinquished property." You may identify more than one property as replacement property. However, the maximum number of replacement properties that the taxpayer may identify is either three properties of any fair market value or any number of properties as long as their aggregate fair market value does not exceed 200 percent of the aggregate fair market value of all of the relinquished properties.

Furthermore, the replacement property or properties must be unambiguously described in a written document. According to the IRS, real property must be described by a legal description, street address or distinguishable name (e.g., "The Excalibur Apartment Building").

• The replacement property must be purchased no later than 180 days after the taxpayer transfers his original property, or the due date (with any extension) of the taxpayer's return of the tax imposed for the year in which the transfer is made. These are very important time limitations, which should be noted on your calendar when you first enter into a 1031 exchange.

In 1989, Congress added two additional technical restrictions. First, property located in the United States cannot be exchanged for property outside the United States.

Second, if property received in a like-kind exchange between related people is disposed of within two years after the date of the last transfer, the original exchange will not qualify for non-recognition of gain.

There is an interesting loophole that might be attractive to many owners of rental property. Say you have found your dream retirement house in Florida, or Delaware, or anywhere in the United States, for that matter. If you do a 1031 exchange now, and obtain title to the replacement property where you ultimately want to live when you retire, you can rent out that property until you decide to move. Then, once you have established the new property as your principal residence, if you live in it for at least two years and more than two years have elapsed since you sold your last principal residence once again you can exclude up to $250,000 (or $500,000 if married and you file jointly) of the gain you have made.

Although the IRS has given us no guidance as to how long you have to use the replacement property as "investment" property, the general consensus is that you should rent out the property for at least one complete tax year.

Thus, depending on the numbers and the facts, you may ultimately be able to avoid some or even all of the capital gains tax which would normally be due when you sold your investment property.

The IRS has also authorized taxpayers to engage in "reverse Starkers," where you buy the replacement property first and then exchange (sell) the relinquished property. This is much more complex, and you should consult your own legal and tax advisers.

Benny L. Kass is a Washington lawyer. This column is not legal advice and should not be acted upon without obtaining legal counsel.

Copyright washingtonpost.com, Benny L. Kass

Having to evict a tenant is a costly and time consuming process that all landlords would rather avoid.  That's why it is important to screen your prospective tenants carefully before handing over the keys.

Often, properties where the owner acts as landlord are targeted by bad tenants since their financial history is less likely to be investigated than if they approached a rental managed by a property manager that will notice red flags which might escape the notice of the owner.  Property managers will conduct the research necessary to minimize the risk that you'll receive a bad tenant.

While there are number of stand alone tenants screening services as well as bad tenant databases to check against, the reality is that it takes experience to detect the cues that accompany tenants who may look good initially but turn out to be trouble in the long run.  Look for a thorough property management company that will screen the tenants credit and background.  Professional property managers often charge an application fee to do the screening, which sends out a clear message that the screening process is handled professionally.  

Property management pertains to the processes applied to maximize returns by effective administration of property--one of the major assets of most organizations. It also comprises the disciplines implemented on property rules and rental policies. 

A property management company is tasked with the responsibility of managing the multiple aspects which come along with the ownership of real estate. This is akin to the role of management in any business. 

One of the important roles property management companies play is that of acting as liaison between the landlord and tenant. Their duties include posing appropriate gross rent, accepting rent, responding to and addressing maintenance issues, advertising vacancies for landlords, and doing credit and background checks on tenants. 

In exchange for the service provided, property management companies charge landlords a percentage of the gross rent collected each month, in addition to lease commissions. 

In addition to managing income and expense related activity, property managers may also manage construction, development, repair and maintenance on a property. The direction of repair and maintenance is quite a large part of a property manager's function. 

Property managers should develop a relationship with the management company, property owner and tenants that is based on a mutual trust and complete confidence in one another. His alliance with tenants gives an advantage to the landlord and provides them the necessary buffer servicing their desire to profit and distance themselves from their tenant constituency. 

There are many aspects to this profession, including participating in and/or initiating litigation with tenants, contractors and insurance agencies. Litigation alone is at times considered an entirely separate function, set aside for trained attorneys. Although a person or persons will be responsible for this in their job description, there may or may not be an attorney working under a property manager. 

Special attention is given to Landlord/Tenant law and most commonly evictions, non-payment, harassment, reduction of pre-arranged services, and public nuisance are legal subjects that gain the most amount of attention from property managers. Therefore, it is a necessity that a property manager be current with new laws and practices in their given localities, cities and states. 

Excellent property management can only achieved by top-notch managers. To be the best in this field, one must know and stay updated on local ordinances and state laws; be highly honest and ethical in enforcing property rules and rental policies; be detail oriented and organized with paper works; have good communication and computer skills; like working with the public; have a strong sense of duty and commitment; and be an exceptional follow-up person.

In order to attract and keep good tenants, your property will need to have a track record of being well managed by a reputable property manager.  Since it costs time and money to place a qualified tenant, it makes sense to do whatever you can to limit your tenant turnover.  Tenant satisfaction should be a high priority.

The experience and efficiency that a professional property manager brings to the table could give your property the edge in a competitive market.

The reality is that tenant retention doesn't just happen, it is the result of consistent reliability, and quality service that a professional property management provides to let tenants know that they are appreciated.

Tenant satisfaction means longer tenancies and happier tenants that have fewer disputes and complaints.

2012 will see the expansion of rental housing being advertised online or via sites that correlate to the explosive growth in the usage of Smart Phones and tablets such as the Apple's iPad. The following video is a reminder of how many property managers around the nation are choosing to advertise vacant rentals using the worldwide web and why (click here). Property managers are also finding that social networking sites, like Facebook and Twitter, can be another great channel to market vacancies. Specialty websites like RentVine.com have been used by an increasing number of owners and property managers to expand their advertising of vacancies online. That trend should continue and grow in 2012.

The number of houses going into foreclosure increased exponentially in 2011. As a result, the number of displaced former homeowners looking for rentals increased to record levels. The good news is that the year 2012 looks very bright and promising for the property management industry and for both single and multifamily rental housing owners.

Property management is the operation, control of (usually on behalf of an owner), and oversight of commercial, industrial or residential real estate as used in its most broad terms. Management indicates a need to be cared for, monitored and accountability given for its usable life and condition. This is much akin to the role of management in any business.

Property management is also the management of personal property, equipment, tooling and physical capital assets that are acquired and used to build, repair and maintain end item deliverables. Property management involves the processes, systems and manpower required to manage the life cycle of all acquired property as defined above including acquisition, control, accountability, responsibility, maintenance, utilization, and disposition.

Renting your property out to tenants can be a stressful process - finding suitable tenants, making sure your rent is paid every month, maintaining the upkeep of your property and sorting all of the legal paperwork are just a few of the factors involved in managing your own property.

If you are opting for the full services of a property manager, they will begin by researching how much the going rental rate is for your property, marketing your property and finding suitable tenants. Managers will have access to a large variety of mediums to market your property and from previous experience will know which places to promote your property to find the right tenants for you. The chosen tenants will need their references checked and are now credit checked to make sure they are reliable at keeping up with payments. Managers will also sort all necessary legal paperwork, saving you the hassle of working out all of the renting legalities.

Hiring a property manager will let you get on with your own life without having to worry about the time and hassle of looking after your own tenants, and everything else that comes with renting a property.

WASHINGTON Feb. 3, 2012 If a bank writes off debt in a short sale, it's a "taxable event," and the lender tells the Internal Revenue Service about the deal by submitting a "Form 1099-C, Cancellation of Debt" at the end of the year. Home sellers must acknowledge the amount when they fill out their federal taxes. Through Dec. 31, 2012, however, the federal government forgives any tax liability associated with forgiveness of a mortgage loan.

"In general, homeowners believe the government will extend this tax provision," says San Diego Realtor Joy Bender. "However, as evidenced by the First Time Homebuyer Credit expiration in 2010, you can't always count on the government to bail you out."

The government generally considers forgiven debt to be income. If a seller has signed legal loan papers to take out a $200,000 mortgage and the lender accepts $100,000 in a short sale, for example, the seller received the equivalent of $100,000 in free money by government estimates. As a result, the IRS taxes it. For tax year 2012, however, the government still forgives the debt; in 2013, it might not.

The tax amount can be significant. On a debt of $100,000, a short-sale seller in the 25 percent tax bracket could end up owing $25,000 in income taxes.

Since short sales can take months and even fall through, homeowners considering a short sale may want to start the process sooner rather than later.

© 2012 Florida Realtors®

TALLAHASSEE, Fla. (AP) Feb. 3, 2012 An appellate court has denied a request from Florida's attorney general to allow further appeal of a decision that could have helped the state continue investigating fraudulent foreclosures.

The 4th District Court of Appeal on Thursday ruled on its own previous decision in April.

The court had said Attorney General Pam Bondi's office couldn't subpoena records of the now-closed Plantation-based Law Offices of David J. Stern to see if false or improper affidavits in foreclosures were filed and whether employees signed documents without reading them.

The court now says its prior decision is not a "question of great public importance" reviewable by the Florida Supreme Court.

A spokeswoman says Bondi now will review all seven pending investigations into law firms to determine how else to pursue foreclosure-related misconduct.
 Copyright © 2012 The Associated Press, James L. Rosica.