mgt1stg, Author at Management One

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So far mgt1stg has created 156 blog entries.

Use a 1031 Exchange with IRS: What You Don’t Know Could Cost You Thousands

Are you thinking of selling your investment property? With rising home values across the Inland Empire, many landlords and investors are considering cashing out. But before you list your property, it’s critical to understand how taxes—particularly capital gains taxes—could impact your decision greatly.

According to the Inland Empire Board of Real Estate, the average home price in Riverside County for 2024 reached $611,000. Let’s say you purchased that investment property several years ago and are now looking at a $300,000 gain on the sale. What happens if you don’t reinvest through a 1031 Exchange? You could be hit with a 33.3% tax bill—that’s $99,900 in taxes owed. That’s a down payment on another property gone—just like that.

Let’s break down where that 33.3% goes and how you can keep it working for you.

What Are Capital Gains?

Capital gains are the profits you make when you sell an investment for more than you paid for it. In real estate, this typically means the difference between your purchase price (plus certain improvements and selling costs) and your sale price.

There are two types of capital gains:

Short-term capital gains (for assets held under one year): taxed as regular income.
Long-term capital gains (for assets held over one year): taxed at preferential rates—but still significant.

Capital Gains Tax Breakdown in California

If you sell an investment property in California without a 1031 Exchange, here’s how the tax liability can break down:

Federal Capital Gains Tax: Up to 20%
Net Investment Income Tax (NIIT): An additional 3.8%for high earners
California State Tax: Up to 13.3%
Total potential tax rate: ~33.3%

So, on a $300,000 gain, you’re looking at $99,900+ in taxes. That’s money that could have been reinvested to grow your wealth—not shrink it.

Enter the 1031 Exchange World

A 1031 Exchange (named after IRS Code Section 1031) allows you to defer capital gains taxes by reinvesting proceeds from the sale of one investment property into another “like-kind” property.

This strategy doesn’t eliminate your tax liability—it simply defers it, potentially indefinitely, especially if you continue exchanging or pass the property down to heirs with a stepped-up cost basis (more on that below).

Types of 1031 Exchanges

Here are the four main types of exchanges investors typically use:

1. Simultaneous Exchange
Both the sale of your current property and the purchase of your new property close on the same day. This was common before the 1980s but is now less frequent due to logistics.

2. Delayed Exchange (Most Common)
You sell your property and have 45 days to identify a new property, and 180 days to complete the purchase. This is the most flexible and widely used option.

3. Reverse Exchange
You buy first and sell later—ideal when you find a great deal but haven’t sold your current property yet. Same 45/180-day timelines apply.

4. Improvement/Construction Exchange
You can use your proceeds to improve a replacement property before the exchange is finalized, which may help meet value requirements or investment goals.

Your 1031 Exchange Support Team

Successful exchanges rely on a professional team to ensure IRS compliance and peace of mind:

CPA – for tax planning and capital gains estimates
Qualified Intermediary (QI) – holds sale proceeds and facilitates the exchange, very important so as not to trigger gain.
Real Estate Broker – locates suitable replacement properties
Real Estate Attorney – reviews legal documents and helps avoid IRS red flags
Financial Advisor – ensures the exchange aligns with your long-term goals

Key Rules to Know

Replacement property must be of equal or greater value
Must identify new property within 45 days
Must close on new property within 180 days of selling your original property

Frequently Asked Questions

Q: Can I live in my 1031 property?
A: Yes, eventually. If you convert the property into a primary residence, you must hold it for at least 5 years before selling to avoid full taxation.

Q: How much does an exchange cost?
A: Typically around $1,000, paid to the QI. Your funds are held in escrow until the exchange is complete.

Q: Can I exchange with a family member?
A: It’s possible but risky. The IRS has strict rules to prevent abuse. Consult a professional before proceeding.

Q: Can I sell one property and buy multiple?
A: Yes. You can identify and buy up to three replacement properties—or more under certain IRS rules—as long as value requirements are met.

Q: Can I go from a single-family home to a 4-plex?
A: Absolutely. As long as both are income-producing properties, it’s a like-kind exchange. A property you live in is not like kind.

Real-Life Example

An investor sold a commercial building for $2.5 million and reinvested in another commercial building and two residential income properties. By executing a 1031 Exchange, the investor legally avoided $500,000 in capital gains taxes, preserving that money for further investments and wealth growth.

Preserve Generational Wealth

One of the most powerful long-term benefits of the 1031 Exchange is generational wealth building. When you pass down your properties to heirs, they receive a stepped-up basis—meaning the property is valued at the market rate at the time of your passing. This can eliminate capital gains tax for your heirs altogether if they sell shortly after inheriting the property.

Instead of paying nearly $100,000 in taxes today, you could:

Buy another rental property
Create cash flow for retirement
Help your children or grandchildren start their real estate journey
Transfer wealth with fewer tax consequences

Need Help Navigating a 1031 Exchange?

Our team has helped countless investors structure smart exchanges, avoid costly mistakes, and preserve wealth for future generations. We’ll walk you through every step—from sale to reinvestment—with clarity, compliance, and confidence.

Contact us today for a no-obligation consultation. Krissia Pena and Tyler Sudman with our Real Estate Firms. 951-735-2000.

By mgt1stg|2025-07-02T14:54:11-07:00July 2, 2025|Landlord Education|Comments Off

A $30 Device That Could Save a Life—And $25 Million

According to the U.S. Fire Administration, residential fires claimed 2,890 lives and injured 10,400 people in 2023 alone, with an estimated 344,600 residential fires reported nationwide. A staggering 60% of home fire deaths occurred in properties without working smoke detectors—a preventable oversight with tragic consequences.

For landlords, this statistic carries serious implications. While many assume that providing a working smoke alarm at move-in fulfills their responsibility, the reality is far more complex. Landlords often rely on residents to replace batteries and report malfunctions, but that assumption can be dangerously optimistic.

At Management One, we proactively remind our residents—via monthly newsletters—to change their smoke detector batteries twice a year. If a landlord has opted into our annual inspection service, our team physically tests smoke detectors using a smoke-emitting tool and also checks carbon monoxide alarms. It’s not uncommon for us to discover disconnected or chirping detectors tossed in drawers, forgotten and ignored. In these cases, our inspectors educate residents on the importance of keeping alarms installed and functioning—and to report any issues immediately.

Many landlords are unaware that some smoke detectors have a 10-year expiration date. The National Fire Protection Association (NFPA) and the U.S. Fire Administration both recommend full replacement of the unit at that point due to dust accumulation and sensor degradation. Today’s newer models feature sealed 10-year batteries, meaning the entire unit should be replaced before it expires.

Legal Obligations in California

California law is clear. Under Health and Safety Code Section 13113.7, landlords are responsible for the installation and maintenance of smoke alarms. Alarms must be operable at the start of a tenancy and must be repaired or replaced as needed. Residents are legally required to notify the landlord if an alarm stops working.

Per California Residential Code R314, smoke detectors must be installed in:

Every bedroom
Hallways adjacent to sleeping areas
Every level of the dwelling, including habitable attics and basements

Real-World Cases: When Things Go Wrong

A quick internet search reveals numerous lawsuits where landlords faced devastating legal and financial consequences for failing to provide or maintain smoke detectors:

Akron, Ohio: Four lives were lost in a house fire due to missing smoke detectors. The landlord was sued for $25 million. The case settled for $360,000.

Clinton, New York: Two landlords were charged with second-degree manslaughter after a mother and her one-year-old daughter died in a fire. Investigators found the home lacked functional smoke detectors. The criminal case is ongoing.

Los Angeles, California: Residents sued New Hampshire Apartment, Inc. for widespread habitability violations—including non-functional smoke detectors. Their insurer refused to provide coverage, citing a breach of the policy’s safety warranty. The residents were ultimately left without compensation due to the voided policy.

Gulfport, Mississippi: A tragic fire claimed the lives of a six-year-old and a newborn. Investigators determined the smoke detectors were obsolete and non-functional—a clear violation of building codes. The lawsuit is still pending.

Our Experience at Management One

When Management One recently acquired a portfolio of 123 rental properties, we uncovered a common theme: most homes lacked the proper number of working smoke detectors and some properties had none. In nearly every case, landlords were unaware of the issue.

Key Takeaways for Landlords:

Test smoke and carbon monoxide detectors annually and document results.
Replace expired units (typically every 10 years).
Install detectors in all required areas.
Don’t rely on residents to maintain critical safety devices.
Verify insurance coverage and ensure compliance with safety requirements.

Smoke detectors are not optional. They are life-saving devices—and a critical legal safeguard. Overlooking something as simple as a $30 alarm could result in a lawsuit, the loss of your property, or even criminal charges.

At Management One, we go a step further by using specialized smoke and carbon monoxide emitters to test each device. This ensures the entire system is functioning properly—not just that the battery works. Our testing confirms that smoke can enter the sensing chamber and that the alarm responds appropriately, providing a more thorough and reliable safety check.

By mgt1stg|2026-04-03T06:43:13-07:00June 3, 2025|Landlord Education, Maintenance, Property Ownership, Resident Education|Comments Off

Section 8 Housing: Are Landlords Required to Accept It?

Do you remember the classic Clint Eastwood film The Good, The Bad, and The Ugly? For many landlords, working with the Section 8 Housing Voucher Program can feel similar—there are clear benefits, but also challenges that require additional effort and consideration.

As of December 2022, over 7.5 million individuals across the U.S. lived in households supported by housing vouchers. In Riverside County alone, more than 10,000 residents benefit from this federally funded rental assistance.

Established under the Housing and Community Development Act of 1974, the Section 8 program was created to ensure that low-income families could access safe, decent, and affordable housing in the private rental market—outside of traditional public housing.

For decades, many private landlords declined participation due to administrative burdens and perceived complications. However, in recent years, California’s legal landscape has shifted significantly.

Legal Obligations for Landlords

Effective January 1, 2020, California enacted Senate Bill 329 and Senate Bill 222, which prohibit landlords from rejecting applicants solely based on their use of a housing voucher. This includes Section 8, VASH (Veterans Affairs Supportive Housing), and other forms of rental assistance.

Housing vouchers are now legally recognized as a protected source of income under the California Fair Employment and Housing Act (FEHA). As a result, landlords may not advertise or indicate in any way that they do not accept vouchers. Doing so is considered discriminatory under Fair Housing laws and may result in fines, legal action, and reputational damage.

These laws are actively enforced through complaint investigations and “mystery shopping” practices conducted by Fair Housing agencies.

What Landlords Must Know About Voucher Applicants

When screening residents with housing vouchers, landlords must follow specific guidelines:

Income Qualification: Income multipliers (e.g., 3x rent) must be based only on the applicant’s portion of the rent—not the full amount. For example, if rent is $1,500 and the tenant’s responsibility is $300, the income qualification must be based on the $300.
Credit Screening: Landlords may not disqualify voucher holders based on credit scores alone. However, screening for rental history, prior evictions, and background checks remains permissible.
Additional Requirements: Participating in the program entails administrative steps such as a housing authority inspection, habitability certification, and lease approval—all of which may extend the leasing timeline.

How the Voucher Qualification Process Works

Applicants seeking Section 8 assistance must:

Join a waitlist, often months or years long due to high demand
Select a housing region and meet income limits set by local agencies
Verify legal U.S. residency for at least one household member
Undergo background checks, with exclusions for certain offenses

From “No Section 8” to Inclusive Advertising

In the past, landlords frequently used phrases like “No Section 8” in their listings due to procedural delays. Today, such statements are prohibited under California law.

This includes language used in online listings (Craigslist, Zillow, personal websites), printed ads, and communications from leasing staff. All employees and agents must be trained to respond appropriately to voucher inquiries. Stating “we do not accept vouchers” is now grounds for a Fair Housing violation.

Dispelling Section 8 Myths

Some landlords worry about increased risks with voucher tenants. However, Section 8 residents are bound by the same lease terms as all other tenants. Violations—such as non-payment, damage, or illegal activity—can still result in eviction and legal action.

Additionally, tenants risk losing their voucher if they breach lease terms, which provides additional incentive for program compliance. The accountability built into the program often results in long-term tenancies and reliable rental income.

Additional Protected Classes

In addition to housing voucher recipients, military personnel and veterans are also covered by California’s source-of-income protection laws. These groups may not be discriminated against based on how they pay rent.

What It’s Really Like to Lease to a Section 8 Tenant

The qualification process for Section 8 renters is extensive. At Management One, we work closely with the Riverside and San Bernardino County Housing Authorities, each of which has a unique approval process.

Riverside County Requirements

To lease to a Section 8 tenant in Riverside County, both the management company and the resident must complete a 17-page packet. Alongside this packet, landlords must submit:

IRS documentation confirming the EIN
A voided check
The signed management agreement
A completed W-9 for Management One
A signed owner statement verifying homeownership

Once submitted to the caseworker, the packet is forwarded to the RFTA (Request for Tenancy Approval) department. This team reviews the applicant’s income, rent amount, and utility costs using a sliding affordability scale. The analysis includes whether appliances are gas or electric and adjusts for utility provider rates.

If the proposed rent exceeds what is deemed affordable for the applicant, the RFTA department will submit a counteroffer—sometimes only $50 lower, other times up to $500 or more. If the reduced amount is acceptable to the landlord, the process continues. If not, the application is denied, though landlords must ensure the same rental terms would also disqualify a non-voucher tenant to avoid discriminatory practices.

After approval, our team performs a limited credit review (looking for prior evictions or rental debt), verifies rental references, and confirms the tenant earns 3x their portion of the rent. The applicant must then submit their portion as a holding deposit.

Meanwhile, the property must undergo a HUD inspection before move-in. One of the most common reasons for failed inspections is non-compliant GFCI outlets near water sources, which we proactively address during property rehabs. If a property fails, landlords have 10 days to correct issues before re-inspection.

It’s important to note: No tenant may move in until the home passes inspection, regardless of what was listed in the lease agreement.

San Bernardino County Requirements

San Bernardino County follows a similar process, with a few additional documentation requirements. In addition to the packet:

A copy of the deed must be submitted
A W-9 is required for each owner listed on the deed
If the property is in a trust, the full trust documents and W-9s must be provided
The management agreement and a W-9 for Management One are also required

Unlike Riverside County, San Bernardino often asks landlords to pre-qualify the applicant before the housing packet is submitted.

Once approved, HUD schedules an inspection, and landlords must resolve any cited issues before the tenant may take occupancy. First payments typically take 4–6 weeks after move-in. Thereafter, HUD payments are deposited like clockwork on the 1st of the month.

Ongoing Management and Communication with HUD

After a Section 8 tenant moves in, ongoing communication with HUD is required. The agency is often understaffed, and changes—such as updates to a tenant’s income—may take 4–6 weeks to process. Payment adjustments and recertification notices are issued regularly, sometimes up to six times per year, plus one annual recertification.

Although the program has its complexities, we’ve found that understanding the process and working within both HUD’s and Management One’s frameworks enables us to better serve our residents and protect our property owners’ interests.

By mgt1stg|2025-04-28T11:11:46-07:00April 28, 2025|Industry News, Landlord Education, Property Ownership, Resident Education|Comments Off

Avoid losing $40,000 like one landlord did.

Insurance, Insurance, Insurance!

This Landlord’s Insurance agent had him underinsured. There was a fire, and it cost the Landlord $40,000 out of his pocket. Insurance companies have no obligation or liability to keep your coverage adequate.

This is a critical topic, and I wholeheartedly believe in discussing it at least once a year.

“Why,” you might ask. I never want an accident to happen and a client of mine to say, “No one ever told me about this coverage.”

Since November 2023, we’ve had 57 water intrusion events. Whether from heavy rains on roofs, slab leaks, broken pipes, etc., water entered the property and caused massive damage. Damages range from collapsed ceilings to buckling flooring to mold.

Proper insurance for such events gives you peace of mind, knowing you will have coverage to mitigate the damages.

In addition to primary liability coverage, all landlord insurance policies should include four essential elements. These elements are:

1) Malicious Intent,

2) Fire,

3) Loss of Rents,

4) Vandalism.

Malicious Intent

Malicious Intent happens when the resident renting your home intentionally damages the property above and beyond “normal wear and tear.” We are talking about destroying the carpet to the point it must be replaced, holes in the walls, windows, and more.

While we don’t see these things very often, we do see them. So when it does happen, landlords are left scrambling to secure the funds to return the property to a rentable condition. This scenario is precisely why ensuring you have Malicious Intent in your policy is important. ( Note all insurance companies have different names for this coverage, just make sure your policy covers this type of damage.)

Equally important is ensuring the resident has Renter’s Insurance so you can recoup the cost from their policy and not affect your premiums. YES, this coverage enables you to sleep at night. The best part is that most insurance companies don’t charge extra for this coverage.

Fire

Your fire policy will only rebuild part or all of your rental home, so this is pretty straightforward. Just make sure that you increase the replacement cost of the rental home each year. In the last two years, building materials went up 39.2%. Most insurance companies will not adjust for inflation. As the policyholder, you have the responsibility, so call your agent once a year.

Loss of Use

Now, let’s start thinking like an investor; you are all investors if you own a rental property. Your business is to make money with an investment/rental property! But what happens if the property burns down, or has so much water intrusion that the resident has to vacate the property, which happens, or the resident causes so much damage to the house that it will take six months to be fully repaired?

You still have a mortgage, taxes, HOA, and Insurance to pay, right? That payment doesn’t stop just because the home is vacant or distressed. Don’t worry! If you have Loss of Rents or Loss of Use coverage in your landlord’s insurance, you may sleep like a baby because you don’t have anything to worry about.

Loss of rent or, in some cases, Loss of Use will cover up to 12 months of the rental income! Some companies include this coverage in your policy for no additional fees, while others charge for it… IT IS WORTH IT! It might be a few more bucks a month but how much is your peace of mind worth?

What a great feeling to know that you will receive money while your property is being repaired.

Vandalism

Let’s say you are about to rent out the property, and a few days before your resident moves in, someone breaks in, and the property gets vandalized!

Again, homeowner’s insurance might not cover you, but the landlord’s insurance will! However, once your property is vacant for more than 30 days, your insurance will not cover you, so always get a 60-day vacancy policy. One stolen Air Conditioning unit could cost you $6,000 or more. You can activate your vandalism coverage in this case!

Something important to mention is that some mortgage companies require you to have a homeowner’s insurance policy while you have an active loan with them! Be sure to ask them if this is the case before canceling your homeowner’s coverage and only getting landlord’s insurance.

Liability

Though not listed in the top four items, liability is the primary focus of the insurance policy. After all, why have a policy if it doesn’t provide basic liability coverage? You may consider increasing the liability coverage to one million or more if your property has a pool or spa, since those are added risks.

For example, your resident has a small soiree, and a kid gets injured because he was running around the pool! We all know, unfortunately, the first thing that comes to some people’s minds is… LAWSUIT! Well, again, here is where you may be able to use your landlord’s insurance liability coverage, since this helps you pay for your expenses if you are found legally responsible after someone is injured on your property or if you are required to pay for damage done to someone else’s property. I carry $1,000,000 liability coverage on my properties.

Renter’s Insurance

We require our residents to carry a renters’ insurance policy. All new residents must provide a copy of their insurance prior to moving into the rental property, and all current residents must provide a recent copy of their declaration page before they renew their lease. We do this to protect not only the resident but also you.

Two recent fires were caused by residents. One resident had current insurance, and one had let their policy lapse. The condo flooded when a contractor working on the unit above hit a water line.

Thankfully, all parties are safe and no one was injured, but you never know when something might happen. People react differently when the pressure is on them.

If you are unsure about your policy, make time this week to talk with our insurance company and confirm your policy. You will be glad you did if you ever have to use it.

By mgt1stg|2026-04-03T06:07:49-07:00March 31, 2025|Landlord Education, Maintenance, Property Ownership|Comments Off

Safeguarding Your Investments and Home: Five Key Strategies

Have you ever pondered the possibility of losing your investment property or your cherished home? It’s a thought many of us brush aside until faced with unforeseen circumstances. However, life’s unpredictability underscores the importance of being prepared. In this newsletter, we delve into five essential strategies aimed at safeguarding your assets and securing your family’s future.

[Disclaimer: Please note that while we offer valuable insights, we are not CPAs or Attorneys or Insurance Agents. We strongly advise consulting with a legal or financial professional to tailor strategies to your unique situation.]

1. Landlord Insurance: Protecting Your Investments

Investing in landlord insurance, known as a DP3 policy (Dwelling Protection Policy), shields your property against a myriad of risks. While this policy covers the dwelling itself, it’s crucial to ensure tenants have their own renters’ insurance to protect their belongings and displacement cost in the event of a major water leak. Depending on the number of properties you own, you’ll opt for either a personal umbrella policy or a commercial umbrella policy. The former suits landlords with three or fewer properties, offering a minimum coverage of $5 million and $500,000 in liability. For investors with four or more properties, a commercial umbrella policy should be considered to provide coverage of at least $5 million per property and a base liability of $500,000 per property. Despite its comprehensive protection, commercial insurance remains surprisingly affordable.

2. LLC Formation: Enhancing Asset Protection

Establishing a Limited Liability Company (LLC) proves invaluable in shielding your assets from potential liabilities. While forming an LLC in California may incur substantial costs. By compartmentalizing each property within its own LLC, you limit exposure to individual assets, mitigating risks associated with tenant disputes or legal claims. This approach ensures that any potential litigation is confined to the assets held within the respective LLC, safeguarding your overall investment portfolio.

3. Utilizing Lines of Credit: Financial Flexibility

One notable advantage of LLC ownership is the ability to secure lines of credit for each entity. By leveraging this strategy, you can demonstrate minimal equity in your properties, bolstering financial flexibility and tax benefits. However, it’s essential to consult with your CPA to ensure this approach aligns with your overall financial objectives.

4. Anonymity Through Out-of-State LLCs: Strengthening Privacy

Maintaining multiple out-of-state LLCs offers an additional layer of anonymity, shielding your property ownership from public scrutiny. This strategic approach not only enhances privacy but also reinforces asset protection by distancing personal assets from potential legal liabilities.

5. Homestead Exemption: Safeguarding Your Residence

For homeowners in California, understanding the homestead exemption is paramount. This legal provision safeguards a portion of your home’s equity from debt collection, shielding you from the threat of forced home sales or excessive equity seizure in bankruptcy proceedings. You can check out this article by Heston & Heston Law.

The previous exemption in California offered limited protection, capping at $75,000 for single individuals, $100,000 for families, and $175,000 for seniors or the disabled. However, effective January 1st, 2021, significant changes occurred. The exemption now ranges from a minimum of $300,000 to a maximum of $600,000, varying by county of residence. Conversely, states like Florida offer full equity protection for homeowners against debt collectors. Considering the limits and the fact that you can still lose some of your equity, homeowners in California may find it prudent to bolster their insurance coverage with a higher umbrella policy.

Furthermore, establishing a Land Trust LLC in Wyoming for your California properties, presents another avenue for safeguarding assets. By transferring property ownership to the LLC, individuals gain leverage in negotiations in the event of a judgment against them.

In essence, whether you own your primary residence or rental properties, asset protection is paramount. Taking proactive measures to shield your assets ensures greater financial security and peace of mind.

Are you considering selling your investment property? How about purchasing another rental property?

We have two incredible Real Estate Agents that work with Management One. There are several benefits of working with one or our agents.

As our client, our agents can work with the residents to see if they want to purchase the property, our agents work with our maintenance team to get the property “sale-ready”, and our agents know the in’s and outs for working with resident-occupied properties.

Call one of our amazing agents today for a consultation!

Krissia Pena with First Choice Investments, services Riverside, Corona, Moreno Valley, Perris, and the surrounding areas. You can reach her at 951-977-0709 or visit her website at https://www.fcione.com/.

Tyler Sudman with Sudman Agency services all of Orange County. You can reach him at 951-735-2000 x 105 or visit his website at https://www.sudmangroup.com/.

By mgt1stg|2025-03-03T11:15:13-08:00March 3, 2025|Landlord Education, Property Ownership|Comments Off

The 5 Secrets to Always Have Money To Pay For Repairs or Vacancies

Honey, we received the rent payment from our residents. All the bills are paid this month, let’s take the kids and go to Disneyland this weekend.”

STOP! And let’s see if that’s in our rental property plan.

Don’t fall into this habit. As landlords, it’s easy to use the money that comes in your rental property to fund other stuff. Setting yourself up for stress when your rental property needs repairs or a major repair for $15,000, like a new roof.

Here are the 5 Secrets for success and always having money for repairs.

1) Set up a rental checking savings account. This account is separate from your personal checking account.

* If you own more than one rental property you can combine them all in one account.

2) When you open the checking account, open it with $1,000 to $5,000, at minimum, enough to make your mortgage payment.

3) Use this account to pay mortgages, taxes, insurance, and repairs for rental properties.

4) Have the rental payments deposited directly into this account. Avoid sending it to your personal account to prevent second thoughts on transferring the funds.

5) When your taxes are completed, ask your accountant how much you got back because you own a rental property. Whatever the amount is, transfer it from your personal account into the rental checking savings account.

As rents come month after month, year after year, they go directly into that account. The account grows. Before you know it, you have enough money in the account to pay for the new roof and take a vacation.

Myth Buster:

“If I raise the rent, the resident will leave.”

We’ve proven this myth wrong. Over the last four years, we’ve been actively raising rental rates to compete with the current rental market.

Annually, we raise rent on approximately 500+ properties. In 2024, 8 residents moved due to rental increases. That’s only a 1.6% turnover. We are not price gouging; we are bringing properties up to the current market value within the amount allowed by law.

For example, one property was rented for $1425 in 2021. In 2022, we raised the rent by $269, in 2023, we raised the rent by $125, and in 2024 we raised the rent by $200. Now, the property is closer to market value.

We put another $3,228 into the owner’s rental checking account in the first year alone. In the second year, we added $1500, plus the $3228 from the year before, to their rental checking savings account. In two years, we added $4,728.00 to their rental checking account. In year three, we added another $2,400. That’s a total of $7,128 a year.

Year one $3228 extra

Year two $3228+$1500= $4728

Year Three: $3228+$1500+$2400= $7,128

Over 10 years, that’s an extra $71,280 in the owner’s rental checking account from just rent.

Not considering the amount you saved on your taxes from owning a rental property.

The average is $2,500 a year, so an additional $7,500.

So, in just 3 years, they now have $14,628 for repairs, vacancies, etc.

The residents are still in the home, loving the home, and the owner has additional funds to do any repairs and even consider some improvements to the property.

It’s important to point out that raising the rent yearly comes with some responsibility on behalf of the landlord. As you are increasing the rents, if you want to keep your resident, you must also put back into the property.

If your property were built in the early 1990s, it would likely have a wooden patio cover. The California sunshine beats up the wood; add the rain, wind, and termites, and that patio cover is probably on its last leg. Use some of the money from the rent increases to change the patio cover to an aluminum cover.

Paint the exterior of the home to maintain its integrity. Putting back into the home shows the residents that you care about the home and value them as a resident in your investment property.

Enjoy the Journey

It’s not all about business. You need to take time to enjoy the journey as well. Once you’ve established your rental checking account and have the funds from the property going to that account. You are no longer robbing yourself of your personal finances.

Your rental property should be funding itself. If it’s not, then let’s talk. I am happy to review your situation and see what’s working and what’s not.

Residents today will pay for value; they are not the residents of 30 years ago. We know we’ve rented over 11,000 houses.

Maybe you’ve been a softy and not raised the rent like you should. Sometimes, we get so caught up in our everyday life and the grind that we forget to stop and evaluate things.

Just like you must have insurance on your property, you have to properly manage the cash flow of your rental property, which we just went over.

Over the last forty years, I have helped thousands of people with their journey of owning rental properties. If you’d like to schedule a time to speak with me, contact Kristan Pennington at support@mgtone.com or 951-289-4828, and she will schedule a time for us to speak.

My goal is for all our landlords to enjoy the journey of owning a rental property or properties. Have less stress, more fun, and build generational wealth.

By mgt1stg|2026-04-03T06:03:59-07:00January 30, 2025|Landlord Education, Maintenance, Property Ownership|Comments Off

New California Landlord Laws: What You Need to Know

As of January 1, 2025, several new laws affecting landlords in California have come into effect, aiming to enhance tenant protections and promote transparency in rental practices. Key changes include:

Tenant Screening Procedures (AB 2493):

Application Fees: Landlords can charge a potential tenant an application screening fee only if they accept applications in the order received and approve the first applicant meeting the established screening criteria. We have always done this at Management One so this does not affect us.
Disclosure of Criteria: Landlords must provide their screening criteria in writing alongside the application.

Security Deposit Documentation (AB 2801):

Photographic Evidence: Landlords collecting a security deposit are required to take photographs of the rental unit:
Immediately before, or at the start of the tenancy.
Within a reasonable time after the unit is returned, prior to any repairs or cleaning for which deductions from the security deposit will be made.
After completing any repairs or cleaning.

Provision to Tenants: These photographs must be provided to the departing tenant.

Implementation Dates:
For tenancies ending on or after April 1, 2025, landlords must take photographs after possession is returned.
For tenancies beginning on or after July 1, 2025, landlords must take photographs at the start of the tenancy.

Positive Rent Payment Reporting (AB 2747):

Offer to Tenants: Landlords of residential rental properties are required to offer tenants the option of having their positive rental payment information reported to at least one nationwide consumer reporting agency.

Frequency of Offer:

For leases entered into on or after April 1, 2025, the offer must be made at the time of the lease agreement and at least once annually thereafter.
For existing leases as of January 1, 2025, the offer must be made no later than April 1, 2025, and at least once annually thereafter.

Rental Payment Methods (SB 611):

Fee-Free Options: Landlords must offer at least one fee-free method for rent payment, ensuring residents are not charged additional fees for valid check payments, even if electronic methods are preferred. Should you have any properties that aren’t managed by Management One, take note of this as it will affect you.
Military Personnel Considerations: Landlords are now required to provide explanations when requesting larger security deposits from military personnel.
Prohibition of Posting Fees for Notices: Landlords are now prohibited from charging tenants any fees for the preparation, delivery, or posting of termination notices, such as a 3-Day Notice to Pay Rent or Quit. This change eliminates additional financial burdens on tenants facing potential eviction and encourages equitable treatment in the landlord-tenant relationship. It is important to note that this adjustment presents significant operational costs for landlords and property management companies, including labor, transportation, and fuel expenses related to notice delivery.

Management One is in the process of updating its practices with our landlords to ensure full compliance with the new regulations.

Resident Screening Procedures (AB 2493)

For the last 40 years, Management One has accepted applications on a first come-first serve basis. We believe this is the fairest way to rent properties and remain above board with Fair Housing.

Security Deposit Documentation (AB 2801):

We currently take photos for all resident security deposit charges and provide them to the departing residents. Effective April 1st, 2025, we will start taking additional before and after photos to be in compliance with the new law. This takes a lot of additional labor time to comply with this law as well.

Positive Rent Payment Reporting (AB 2747):

We currently use an online payment platform that offers residents the option to have their rental payment history reported to their credit.

Rental Payment Methods (SB 611):

Fee-Free Options: We currently allow residents to pay by cashiers check or money order along with paying online.

Military Personal Security Deposit– the law already only allows for Management companies and landlords to collect a security deposit equal to one-months rent, so we don’t have to worry about this.

Termination notice fees: We currently charge the resident a $100 posting fee for 3-day notice to pay or quit. Effective April 1st, Management One will charge the landlords $75 posting fee and Management One will take a $25 loss.

We are committed to working closely with our legal counsel to ensure that Management One and our clients remain fully compliant with new laws and Fair Housing regulations.

As legislation evolves, we will continue to provide timely updates to keep you well-informed and prepared.

By mgt1stg|2025-01-08T16:32:40-08:00January 8, 2025|Industry News, Landlord Education, Property Ownership, Resident Education|Comments Off

Top 10 Cities in Orange County

Orange County –Pressed against the Pacific Ocean, a beautiful county nestled in between California’s Los Angeles and San Diego counties – welcomes over 40 million visitors each year. While many are drawn to Disneyland, others look to enjoy the breathtaking views offered by the county’s picturesque coastal cities. Here are some cities located in beautiful Orange County that will offer visitors and tourists an eyeful in the best possible ways.

1. Newport Beach, California

Home to the Balboa Peninsula, two piers, and some of the most beautiful beaches California has to offer, Newport Beach is a town that prides itself on its vast diversity of restaurants and top-rated schools. In 2012, Newport Beach’s beautiful shoreline was recognized in 2012 with CNN’s Five Stars for Cleanest Beach in the U.S.

2. Anaheim Hills, California

Anaheim Hills is a beautiful residential area with plenty of green space, including the wooded Oak Canyon Nature Center, with kid-friendly trails. Yorba Regional Park, is famous for fishing, riverfront paths, and a duck pond. For exercise and sometimes fun, cyclists ride dirt paths in Deer Canyon Park. Whether you are a novice or pro, the Anaheim Hills Golf Course is known for its challenging fairway.

3. Huntington Beach, California

This beach city has 10 miles of uninterrupted beaches, year-round summer weather, and numerous things to enjoy and experience throughout the City. With plenty of activities to experience, countless restaurants to enjoy, and relaxing spas and wellness centers to partake in, Huntington Beach is a treasure trove of fun and excitement.

4. Aliso Viejo, California

Located in the San Joaquin Hills of Southern Orange County, this City is one of the best places to live in California. With award-winning schools, attractive neighborhoods, and exquisite shopping, dining, and entertainment, Aliso Viejo is a trendy place to live. The City, which continues to be named one of the safest cities in the nation, is home to picturesque views of mountains, streams, parks, and city lights.

5. Dana Point, California

Are you dreaming of the beach? Well, this beautiful City has 7 of them. If you are longing for relaxation, Dana Point has lots of open space, yoga classes, and, most importantly, SUNSHINE. Offering posh resorts with breathtaking views and amazing deals year-round, Dana Point is an excellent place to getaway.

6. Buena Park, California

Tucked away in the metro area of Los Angeles and Orange County, many visitors flock to Knott’s Berry Farm to thrill-seek on the attractions and overload on funnel cakes. Known as the Entertainment Capital of Southern California and the birthplace of the boysenberry, you can be sure to find plenty of fun things to do in this entertaining City. Just 5 minutes from Disneyland, and a short ride from Huntington Beach, Buena Park is the ideal basecamp for your California dream vacation or stay-cation.

7. Brea, California

Whether you are visiting for business or vacation, in Brea, you are destined to discover many ways to make sure your stay is worthwhile and memorable. In addition to being in the greatest locations adjacent to some of Southern California’s most popular attractions, there is plenty to do and see!

8. Irvine, California

Ranked as the “Safest Big City” by the FBI, this title alone makes it a fantastic place to bring up your children or a perfect spot for a vacation. In Irvine, you are right at the gateway to some of California’s top attractions. You can visit the Orange County Great Park and take a ride in the Great Park Balloon. This balloon rises 400 feet above the ground, where you can see Irvine and Orange County below. When you combine the weather, location, and low crime rate, you are left with an entertaining city that gives you an exceptional quality of life.

9. Laguna Niguel, California

Laguna Niguel is a very affluent suburban city of Orange County. The name comes from the Spanish word “lagoon.” This City is in Joaquin Hills, southeast of Orange County. It forms the borders of the following cities: San Juan, Mission Viejo, Laguna Hills, Laguna Beach, Dana Point, and Aliso Viejo. Laguna Niguel is California’s first master-planned community. You can visit one of the City’s popular beachfront parks to be one with nature.

10. Yorba Linda, California

Yorba Linda is an Orange County city and one of the best places to live in California. Known as the “Land of the Gracious Living,” this City has a strong sense of community and small-town character. Recognized as one of the “100 Best Places to Live” in the United States, Yorba Linda continues to keep up its shared values of responsible growth, preservation of existing neighborhood character, and conservation of natural resources. While there, visit the Richard Nixon Library and Birthplace to learn a little bit of history.

Start planning your trip to Orange County. There are so many fun things to do in Orange County. Orange County is a destination where you will never run out of things to do. There are so many things to do in California. Even a weekend getaway to the coast will create memories and fun that will last a lifetime. Make a list, plan a trip, and take some time to visit these beautiful cities in beautiful Orange County!

By mgt1stg|2024-12-27T02:00:31-08:00December 27, 2024|Lifestyle, Property Ownership|Comments Off

Secure Your Rental Property and Save on Turnover Costs with a Smartkey Lock and PVC Pipes

Vacancies can be stressful, especially with the risk of squatters gaining access to your property. Unfortunately, squatters’ rights can complicate the eviction process, often taking months and incurring significant costs. As a property management company, we’re here to help protect your investments with simple and effective security upgrades: Kwikset SmartKey Locks and PVC pipes for sliding doors.

Why Choose Kwikset SmartKey Locks?

SmartKey locks are an innovative, cost-effective solution for maintaining security between tenant turnovers. Here’s why they’re worth considering for your properties:

1. Quick and Affordable Rekeying

Kwikset SmartKey locks allow you to rekey a property without hiring a locksmith. This can be a game-changer for high-turnover properties, saving both time and money. For example, our preferred contractors offer SmartKey lock installation for approximately $390 for four doors. After this initial installation, each rekeying service costs only $75, a significant savings over the $300 minimum charge typical for locksmith visits every time you have to do this.

2. Enhanced Security for Added Peace of Mind

SmartKey locks are designed with advanced technology that protects against break-in tactics such as lock bumping and picking. This means that only the current resident has access, adding a critical layer of security for your property and helping to deter unauthorized entry during vacancies.

3. Streamlined Key Management

With SmartKey locks, you can rekey multiple locks to a single key, reducing the hassle of managing numerous keys. For landlords, this simplifies access across multiple units and ensures smooth transitions between residents.

Why PVC Pipes are a Superior Alternative for Sliding Door Security

PVC pipes are a low-cost, practical solution for sliding doors, providing a more robust barrier than traditional thumb locks. Here’s how they stack up:

1. Enhanced Security

A PVC pipe cut to fit the length of the sliding door track creates a secure, physical barrier that prevents the door from being opened, even if the thumb lock is bypassed. Unlike thumb locks, which can be tampered with, PVC pipes offer a reliable layer of security for both you and your residents.

2. Cost-Effective and Easy to Install

PVC pipes are inexpensive and require minimal installation effort — simply place them in the door track. Our preferred contractors can install PVC pipes on all sliding doors and windows for just $61.79, making it a budget-friendly way to enhance security across multiple units.

3. Durable and Low Maintenance

Thumb locks can wear out or become difficult to operate over time. PVC pipes, however, are durable and easy to replace if necessary. With no moving parts, there’s minimal risk of malfunction, providing a long-lasting security measure.

Are the Benefits Worth the Cost?

At Management One, we believe the investment in SmartKey Locks and PVC pipes is well worth the peace of mind and long-term savings. Recent experiences highlight the importance of these security upgrades:

Case Study #1

A property on Spruce St. in Riverside, which opted out of both PVC pipes and SmartKey locks, was left in disarray by squatters, delaying the new tenant’s move-in. Every day a rental property is vacant, an owner averages a $100 loss per day.

Case Study #2

A property on Lewisia in Moreno Valley experienced two incidents where squatters gained access through an unsecured sliding door. Because this property had Smartkey locks, our inspector could quickly rekey, locking out the squatters and saving the landlord locksmith expenses.

Case Study #3

A property on Delano in Riverside without PVC pipes or a Smartkey lock was broken into through a window. Squatters caused over $500 in locksmith fees and $300 in cleaning costs to restore the property.

The Long-Term Benefits

By incorporating Kwikset SmartKey locks and PVC pipes, you’re enhancing property security, reducing turnover costs, and saving time during vacancies. This small investment brings lasting benefits, helping to protect your property and maintain its value.

Meanwhile, here’s another informative article on Air Conditioning Maintenance in California: Tenant or Owner Responsibility?

By mgt1stg|2026-04-03T06:04:47-07:00December 2, 2024|Landlord Education, Maintenance, Property Ownership|Comments Off

Top 5 Neighborhoods In Wildomar, CA

Wildomar is a city in Riverside County, California, United States. It was incorporated on July 1, 2008. The city is in a fast-growing area.

Living in Wildomar offers residents a sparse suburban feel, and most residents own their homes. In Wildomar, there are a lot of parks. Many families live in Wildomar, and residents tend to have moderate political views. The public schools in Wildomar are above average. Quite an enjoyable city to live in. If a person is looking for a city with superb homes, good people, pretty good schools, Wildomar is great.

With all the different neighborhoods Wildomar offers, it can be tough to decide where to live. I’ve selected five great neighborhoods based on my tenure in property management.

Let’s tour the city, shall we?

1. Briarwood

Features beautiful single-family and multi-generational new homes for sale in Wildomar. Residents will enjoy access to Briarwood’s community park that has so much to offer. Two basketball half-courts appeal to kids and adults alike.

The community park includes a gorgeous picnic area that is great for grabbing a bite to eat and enjoying the warm California sun. Kids will be happy to have a tot lot with play structure, and parents will be happy it’s so close to home.

The community park also includes a shade structure with BBQ units and two picnic tables. The park is the perfect place to unwind and enjoy time with family and friends with plenty of open grassy areas. Just a short walk from the new homes of Briarwood, residents will enjoy a variety of nearby shops, grocery outlets, restaurants, pharmacies, and more. Being near with all the essentials and entertainment is one of the many perks of living.

The average rental rate for a 3-bedroom home in Briarwood is $3,060 a month. The average purchase price for a 3-bedroom home is $600,000.

2. Heritage Crossings

Heritage Crossing is a growing community in the rolling hills of the Wildomar. The natural scenic region in Southwest Riverside County is a popular destination for families seeking the comfort of a small-town atmosphere with plenty of nearby shopping, cultural activities, and entertainment.

The City of Wildomar has three parks on just over 15 acres of parklands with playgrounds, sports fields, and picnic areas, and one includes a dog park. There are also 90 miles of regional multi-use trails awaiting discovery.

This Southern Riverside County area is a recreational enthusiast’s dream. The area is home to numerous championship golf courses, several lakes, sky diving facilities, and more. Camp, fish, and hike at the nearby Santa Rosa Plateau or go exploring the wilderness of the Cleveland National Forest.

The average rental rate for a 3-bedroom home in Heritage Crossings is $3,100 a month. The average purchase price for a 3-bedroom home is $398,000.

3. The Ranches

The Ranches is a community for anyone who wants room to roam with its spacious half-acre lots. The expansive backyards allow residents to keep their recreational vehicles or even horses.

Featuring stylish Spanish exteriors, the homes have been designed with an open living concept perfect for nights with the family or entertaining guests. With single-story and two-story designs, there is a home for every family.

The average rental rate for a 2-bedroom home in The Ranches is $2,939 a month. The average purchase price for a 2-bedroom home is $699,000.

4. The Orchard Collection

The Orchard Collection at Wildomar Springs offers pleasant seclusion from the hustle and bustle of big city SoCal. A convenient location within 90 minutes of three major international airports.

Nestled in a valley flanked by a majestic mountain range to the west and lush rolling hills to the east, Wildomar Springs offers a sublime selection of homes. These homes feature up to six bedrooms, standard solar power, and several innovative floor plans in Spanish, Ranch, and Cottage-style architecture.

Officially incorporated as a city on July 1, 2008, and located just 30 minutes from Temecula Wine Country, Wildomar Springs combines the best of modern urban living with an authentic rural sensibility that makes it one of Riverside County’s most desirable communities.

The average rental rate for a 5-bedroom home in The Orchard is $3,266 a month. The average purchase price for a 3-bedroom home is $500,990.

5. The Farm

This unique and friendly community has so much to offer for families. A great choice of family living is one you will not regret.

This neighborhood maintains 38 acres of citrus groves and features 600 acres of common area. The amenities don’t stop there. Residents also enjoy an amphitheater, three pools, two spas, a catch-and-release fishing pond, courts, and fields for sports, two R.V. storage areas, a picnic area, playgrounds, and hiking trails. Activities like farmer’s markets, coffee klatch, and crochet bring the community together.

The average rental rate for a 3-bedroom home in The Farm is $2,954 a month. The average purchase price for a 3-bedroom home is $ 448,000.

If you want to rent a home or purchase in one of these fantastic communities, Management One and our affiliates can help. We have a dedicated leasing team that loves to help families find their next home.

By mgt1stg|2024-11-29T10:00:38-08:00November 29, 2024|Industry News, Property Ownership|Comments Off

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About mgt1stg

Talk to Us About Your Property Needs

Still uncertain about property management? Give us a call to see if we can help.

Orange County

Riverside County

Talk to Us About Your Property Needs

Talk to Us About Your Property Needs

Still uncertain about property management? Give us a call to see if we can help.

Still uncertain about property management? Give us a call to see if we can help.

Orange County

Riverside County

About mgt1stg

What Are Capital Gains?

Capital Gains Tax Breakdown in California

Enter the 1031 Exchange World

Types of 1031 Exchanges

Your 1031 Exchange Support Team

Key Rules to Know

Frequently Asked Questions

Real-Life Example

Preserve Generational Wealth

Need Help Navigating a 1031 Exchange?

Legal Obligations in California

Real-World Cases: When Things Go Wrong

Our Experience at Management One

Key Takeaways for Landlords:

Legal Obligations for Landlords

What Landlords Must Know About Voucher Applicants

How the Voucher Qualification Process Works

From “No Section 8” to Inclusive Advertising

Dispelling Section 8 Myths

Additional Protected Classes

What It’s Really Like to Lease to a Section 8 Tenant

Riverside County Requirements

San Bernardino County Requirements

Ongoing Management and Communication with HUD

Malicious Intent

Fire

Loss of Use

Vandalism

Liability

Renter’s Insurance

1. Landlord Insurance: Protecting Your Investments

2. LLC Formation: Enhancing Asset Protection

3. Utilizing Lines of Credit: Financial Flexibility

4. Anonymity Through Out-of-State LLCs: Strengthening Privacy

5. Homestead Exemption: Safeguarding Your Residence

Tenant Screening Procedures (AB 2493):

Security Deposit Documentation (AB 2801):

Positive Rent Payment Reporting (AB 2747):

Rental Payment Methods (SB 611):

1. Newport Beach, California

2. Anaheim Hills, California

3. Huntington Beach, California

4. Aliso Viejo, California

5. Dana Point, California

6. Buena Park, California

7. Brea, California

8. Irvine, California

9. Laguna Niguel, California

10. Yorba Linda, California

Why Choose Kwikset SmartKey Locks?

1. Quick and Affordable Rekeying

2. Enhanced Security for Added Peace of Mind

3. Streamlined Key Management

Why PVC Pipes are a Superior Alternative for Sliding Door Security

1. Enhanced Security

2. Cost-Effective and Easy to Install

3. Durable and Low Maintenance

Are the Benefits Worth the Cost?

Case Study #1

Case Study #2

Case Study #3

The Long-Term Benefits

1. Briarwood

2. Heritage Crossings

3. The Ranches

4. The Orchard Collection

5. The Farm

Talk to Us About Your Property Needs

Still uncertain about property management? Give us a call to see if we can help.

Orange County

Riverside County

Talk to Us About Your Property Needs

Talk to Us About Your Property Needs

Still uncertain about property management? Give us a call to see if we can help.

Still uncertain about property management? Give us a call to see if we can help.

Orange County

Riverside County