The Feast of Saint Patrick is a widely celebrated occasion in the United States. But, not everything you know about the celebration may be true. Educate yourself by reading through these St. Patricks Day facts.

 

Interesting St. Patricks Day Facts Everyone Should Know

While the United States government does not recognize St. Patrick’s Day as a federal holiday, millions of people across the country still take the time to celebrate the grand occasion. With over 31.5 million Americans boasting Irish ancestry, this doesn’t come as much of a surprise. But, there are still some St. Patricks Day facts that may surprise you.

 

1. The Birthplace of Saint Patrick

Saint Patrick is known as the patron saint of Ireland, but did you know that he wasn’t even born there? Many historians believe that Saint Patrick was born in Britain at the end of the 4th century. When he was 16 years old, Irish raiders kidnapped him. He was subsequently sold to a Celtic priest as a slave in Northern Ireland. He spent 6 years working as a shepherd before making his escape back to Britain.

How did he find his way back to Ireland? Well, eventually, Saint Patrick returned to Ireland as a missionary, introducing many parts of the country to Christianity. Interestingly, Saint Patrick was not even born as Patrick. Instead, he was born Maewyn Succat. Later on, he took the name Patricius during his religious journeys.

 

2. The Significance of the Shamrock

The shamrock has long been the symbol of St. Patrick’s Day. You will find it everywhere around this time of the year — from shoddy bar merchandise to your local arts and crafts store. It is even a popular party costume.

But, what exactly is the significance behind this three-leaf clover? Well, it is said that Saint Patrick had used the shamrock as a way to preach Christianity, likening its three leaves to the Holy Trinity. The Celts called it seamroy and considered the plant sacred.

 

3. The Color Blue

Perhaps one of the most fascinating St. Patricks Day facts is that the celebration was initially associated with the color blue — not green. The change is believed to have happened because of the green color in the Irish flag as well as the day’s connection with shamrocks. Additionally, Ireland is known as “The Emerald Isle.” Today, it is nearly impossible to go out on St. Patrick’s Day without seeing the color green.

 

4. Most Consumed Beverage

If you love celebrating St. Patrick’s Day, then you probably already know the answer to this. Drinking is one of the most popular ways to celebrate the occasion, so it should come as no surprise that beer is one of the most consumed beverages on St. Paddy’s Day.

While many pubs and bars dye their beer green to commemorate the event, one particular brand of beer remains at the top: Guinness. In fact, as part of the St. Patrick’s Day celebration, an estimated 13 million pints of Guinness is consumed worldwide.

 

5. The First St. Patrick’s Day Celebration in the U.S.

The United States has been celebrating St. Patrick’s Day for a very long time, which makes sense considering there are millions of Americans claiming to be of Irish descent. But, did you know that the first St. Patrick’s Day celebration in the country took place in Boston in 1737?

This is not when the first St. Patrick’s Day parade occurred, though. According to history records, the tradition of holding parades, which originated in America, began in 1601 in what is known today as St. Augustine, Florida. And we have Ricardo Artur, the Irish vicar of the Spanish colony, to thank for it.

 

6. Chicago’s Unique St. Patrick’s Day Celebration

While cities across the United States celebrate St. Patrick’s Day with parades and pub crawls, Chicago is quite unique. On the morning of their St. Patrick’s Day parade every year, the Windy City dyes the Chicago River green for a few hours. Visitors can view the green river between Columbus Drive and State Street. The dye is environmentally-friendly, though, so it does not do any harm to the river or its inhabitants. The first time the city ever dyed its river green was in 1962.

 

7. The Shortest St. Patrick’s Day Parade

St. Patrick’s Day parades have become a staple in many cities across the globe, and no two parades are exactly alike. Some go on for a long time, while others only last a little while. But, the shortest St. Patrick’s Day parade takes place every year in Hot Springs, Arkansas. The parade has a route that only measures 98 feet (about 30 meters) long.

Before Hot Springs, though, the record for the shortest St. Patrick’s Day parade was 295 feet (90 meters) long. The parade took place in Dripsey, a village in County Cork, Ireland.

 

8. Female Leprechauns Don’t Exist

According to Irish folklore, leprechauns were known as “lobaircin,” which translates to “small-bodied fellow.” The origin of leprechauns likely comes from the Celtic belief in fairies.

But, did you know that there are no records of female leprechauns in Celtic folktales? If that is the case, how do leprechauns procreate? Well, some believe that leprechauns are actually the unwanted children of fairies. As such, folktales have always described them as cranky and untrusting creatures in folktales.

 

9. Four-Leaf Clover Odds

Shamrocks are three-leaf clovers, and it takes a rare genetic mutation for clovers to have four leaves. This is why it is so hard to find a four-leaf clover. It is also why many people associated the four-leaf clover with luck. In addition to luck, according to Irish Celtic beliefs, each leaf on the four-leaf clover represents love, faith, and hope. But, what are even the odds of finding a four-leaf clover? According to calculations, about 1 in 10,000.

 

The More You Know

St. Patrick’s Day is just around the corner. But, before you go on that pub crawl or watch another parade, it is important to first learn some interesting St. Patricks Day facts. Who knows? These facts may be the answer to questions at your next St. Patrick’s Day trivia night!

 

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Many people have probably heard about homeowners associations. But, what is an HOA anyway? And what does it mean to live in a community managed by one?

 

What Is an HOA? HOA Meaning Explained

In the process of searching for a new home, you might come across properties listed as belonging to an HOA. But, what does HOA mean?

HOA is short for homeowners association. A homeowners association is an entity tasked with the management and maintenance of a planned community. These associations come in many forms, including single-family homes, townhomes, and condos. When a home is part of an HOA, buying it means automatically becoming a member of that association.

 

What Is the Purpose of an HOA?

So your home is part of a homeowners association — will anything change? What is the point of an HOA exactly?

The primary function of an HOA is to maintain the community and preserve property values. There are many moving parts when it comes to community management, and there is typically a set of HOA board members calling the shots. These board members, while unpaid volunteers, are elected into position by a vote from the membership.

The HOA board ensures the community remains in good condition by performing several duties, including but not limited to:

• Planning the budget to ensure the association has enough money to cover the coming year’s expenses;
• Maintaining the association’s reserve fund;
• collecting dues and assessments;
• Overseeing maintenance and repairs of common areas;
• Hiring and coordinating with vendors;
• Communicating with homeowners, including sending out notices and meeting agendas;
• Enforcing the rules and covenants of the community;
• Ensuring compliance with the law and the association’s governing documents; and,
• Hiring and coordinating with the HOA management company.

 

The Pros and Cons of Association Living

What does it mean to live in an HOA? As with a lot of things, living in an HOA community comes with pros and cons. Before you buy a home managed by an HOA, make sure to consider both sides of the coin. This way, you don’t end up stuck in a situation of your disliking.

 

What Are the Advantages of a Homeowners Association?

First of all, homeowners who live in an HOA community obtain access to its common amenities and facilities. While these amenities can vary from one association to another, usual amenities include swimming pools, clubhouses, and fitness centers. There are also HOAs that have their own parks, tennis courts, and golf courses. Additionally, more often than not, these amenities are only available for member use.

Another benefit of homeowners association living is that homeowners get all sorts of convenient services. This can range from snow removal and trash disposal to landscaping. Homeowners also don’t need to worry about keeping the neighborhood clean and well-maintained, as HOAs are tasked with this very job. As such, most HOA communities boast excellent curb appeal and high property values.

Finally, nothing compares to the sense of community that living in an HOA can offer. Because HOAs typically organize social events, you get a chance to meet your neighbors in a social setting and get to know them. In comparison, when you live outside of an HOA, you probably won’t even know who your neighbors are.

 

What Are the Disadvantages of an HOA?

Of course, homeowners associations also pose their fair share of disadvantages. One of the main downsides of HOA living is that you don’t get a lot of control when it comes to property use and modification. Many associations limit what you can do with your home, particularly when it comes to external changes such as paint color, building a shed, and how tall your fences should be. There are also several other rules to follow, such as noise rules or quiet hours, parking rules, and pet policies.

It is worth noting, though, that these rules do serve a purpose. They exist to maintain order in the community and preserve its overall appeal. Without these rules, a neighborhood can quickly become chaotic — with untrimmed hedges, cars parked everywhere, and mismatched house colors.

Having to pay HOA dues is another commonly cited disadvantage of homeowners association living. But, as with rules, dues play an important role in the association’s operations.

 

Can You Refuse to Join a Homeowners Association?

Generally speaking, you can’t refuse to join a homeowners association. For a large majority of HOAs, membership is automatic and mandatory once you buy a home in the community. Membership, though, shouldn’t come as a surprise. Your real estate agent and seller should inform you prior to closing that the home belongs in an HOA. Additionally, they should provide you with a copy of the association’s governing documents and financials. This way, you can gauge whether or not joining that particular HOA is a good decision for you.

 

What Are HOA Fees?

Living in an HOA community also means having to pay a homeowners association fee. What is an HOA fee? Paid either monthly or annual, these recurring dues go toward the association’s operating fund to pay for the various expenses of the community. After all, maintaining an HOA doesn’t come free. Moreover, a portion of these dues also goes to the HOA’s reserve fund, which is used to pay for major replacements and repairs in the future.

What do HOA fees cover? It depends on the expenses of your community. Common examples of HOA expenses include:

• Insurance premiums
• HOA management fees
• Maintenance and repair costs
• Landscaping fees
• Common utilities

Everyone in the community, even members of the HOA board, must pay HOA dues.

 

Raising Fees: Is It Allowed?

Do HOA fees go up? In a word, yes. Homeowners association fees don’t remain the same forever. Dues are calculated based on the budget for the year’s expenses. When expenses go up, so do HOA fees.

There are many factors that can affect an association’s budget and fees. These include the rising cost of goods (i.e. inflation), increased wages, new common areas, and renovations. Additionally, if your HOA is trying to reach its appropriate reserve fund level, it may call for larger reserve contributions.

Bear in mind, though, that there are protections in place to keep HOAs from increasing dues too much. An HOA’s governing documents could impose a limit on increases. Similarly, some states have enacted laws that prevent associations from raising dues to a certain point. Arizona law, for instance, says that HOAs can’t raise dues by more than 20% per year without obtaining majority approval from its members.

 

What Are the Typical HOA Rules?

As briefly discussed in a previous section, homeowners associations usually have rules in place to maintain order in the community. While these rules can vary from association to association, typical HOA rules include:

• Exterior paint rules
• Architectural rules
• Lawn maintenance rules
• Pet restrictions
• Parking rules
• Vehicle restrictions
• Noise rules
• Guest rules
• Holiday decoration restrictions
• Rental restrictions

 

Can an HOA Evict a Homeowner?

The short answer is yes. When a homeowner defaults on their dues payments, an HOA has several options available. Most start with a stern notice informing the owner of their delinquency. Many associations also impose a fine for the late payment. If an owner still fails to settle their unpaid dues, HOAs will place a lien on the property, at which point they can choose to initiate foreclosure proceedings.

 

Your Questions Answered

Living in a homeowners association can definitely be confusing. But, what’s even more confusing is when you get behind the wheel. Managing an HOA community is not as easy as it seems, as evidenced by the many duties board members must fulfill.

If your HOA board needs help, perhaps it’s time to automate your processes and invest in an HOA management software. Call Condo Manager today at (800) 626-1267 or contact us online for a free demo.

 

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A lot of brands and communities focus on the younger crowd when using Valentine’s Day as a tool for engagement. But, senior residents also deserve to receive love from their homeowners association this time of the year. Here are some Valentine’s Day ideas for seniors.

 

Fun and Suitable Valentine’s Day Ideas for Seniors

While older adults are more likely to live with extended family in other parts of the world, the United States stands out. In fact, in the U.S., 27% of adults aged 60 and older live alone. There are also a number of seniors who live with their partners but not their children. This is common across the country, with many communities specifically housing adults aged 55 and above. For these communities, it can be difficult to think of Valentine’s Day activities and events that fit the resident demographic.

Here are some ideas to get you started.

 

1. Send a Valentine’s Day Card

One of the simplest and most affordable ways to celebrate Valentine’s Day in a senior community is to send a card. Buy enough Valentine’s Day cards for all the residents, then write a heartfelt message inside each one to show them how much they mean to the community. It does not even need to be long or poetic. Something short yet sincere can work wonders. While you can mail these cards to each resident, delivering them by hand will make the gesture more special.

 

2. Send Flowers or a Houseplant

Who doesn’t like receiving flowers on Valentine’s Day? The seniors in your community will certainly appreciate a bouquet of roses or tulips — or any other flower, for that matter.

The price of flowers tends to skyrocket during Valentine’s Day, though, so you can send a houseplant instead. Houseplants are great because they add soothing energy to any room. Plus, there are many houseplants that don’t require a lot of care or attention, making them perfect for senior residents.

 

3. Share Homemade Pastries

Valentine’s Day is all about sweet treats, so why not share them with the elderly residents in your community? You can gather some of the younger residents together to bake pastries for the older adults in the neighborhood. Alternatively, you can just purchase pastries from your local bakery and then hand them out to the senior residents. The best part about this is that there is no shortage of pastries you can give away. Cakes, cookies, or candy hearts — take your pick!

 

4. Send a Care Package

Many senior residents, especially those living alone, don’t receive gifts on Valentine’s Day anymore. One way the community can make seniors feel appreciated is to put together and send them care packages. You can assemble a standard care package or, if you know residents well enough, tailor each care package according to the personality and needs of every resident.

Here are some ideas of what you can include in your Valentine’s Day senior care package:

• Books
• Fruits
• Cookies
• Wine
• Snacks
• Teas
• Cocoa packets
• A food service subscription
• A small pillow
• Socks
• A blanket
• Slippers

 

5. Hold a Movie Night

A movie night might be one of the simpler Valentine’s Day ideas for seniors, but it has a couple of benefits. For one thing, the seniors in your community will appreciate watching a movie without having to go all the way to the cinema. It also gives the residents in the HOA a chance to get together and bond with each other.

Of course, given that it is Valentine’s Day, the best movies to watch are romcoms. Some communities are opting for rom-com movie marathons, but older adults might get tired easily and want to go home after only watching one film. As such, you can take your pick from some of the best romcoms and go from there. It can be a single-night event or an event that takes place over multiple nights, with each night showing a different flick.

 

6. Host a Tea Party

A tea party is a great way to gather senior residents under one roof and have a lighthearted Valentine’s Day celebration together. Brew some tea and put out some biscuits or pastries (or both). Play some soft music in the background for a calm and comfortable atmosphere. You can do this indoors or outdoors, with garden tea parties being a particularly popular choice.

 

7. Organize a Walk

Another good way to celebrate Valentine’s Day for the elderly is to organize a walk in the community. This is perfect if your neighborhood has greenspaces, a park, or a walking trail. Exercise is good for the health no matter how old you are. As such, getting seniors to walk together not only promotes a healthy lifestyle but also encourages residents to get to know each other.

 

8. Arrange a Game Day

When you think of Valentine’s Day ideas for seniors, a game day is probably one of the last things that come to mind. But, older adults enjoy playing games just as much as younger ones.

Sure, more active or physical games are probably off the list, but there are other games you can play together. Some examples include bingo, card games, word searches, sudokus, and other puzzles. It gives residents a chance to show their competitive side while still enjoying the company. You can do this at the clubhouse and even allocate a prize for the winner.

 

9. Give Back to the Community

Many seniors like to knit or sew. You can tap into this hobby and organize a charity drive wherein elderly residents can make hats, gloves, or scarves to donate to a local hospital or shelter. Senior residents will definitely appreciate having a creative outlet while simultaneously being able to share the love with those who need it most.

 

Spreading Love to Seniors on Valentine’s Day

Senior community residents often feel alone or left out on special days like Valentine’s Day. After all, not a lot of associations create specific events that cater to this demographic. Whether you run a 55-and-older community or an HOA with a sizable elderly population, these Valentine’s Day ideas for seniors are sure to make a huge impact.

 

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The control of every development must eventually transfer from the developer to the members of the homeowners association. But, the HOA turnover process is not always easy and trouble-free.

 

What Is an HOA Turnover? And Why Is It Necessary?

An HOA turnover, also known as a community turnover, is exactly as it sounds. It is the process of turning over control of the homeowners association from the developer to the homeowners.

The HOA transition from developer to owner is important because it marks a change in the structure of the community. Once control transfers, owners will then be responsible for maintaining the community instead of the developer. Owners must then elect a set of HOA board members, who must then ensure the continuous operation of the community.

Both the developer and homeowners will, of course, want a fast and easy transition. But, you may run into minor hitches here and there when your interests as a homeowner do not line up with the developer’s interests. After all, developers are mainly interested in making a profit. They want to establish a community, sell houses, and then start on their next project.

Even though both parties want the quickest route to the end result, it is imperative to ensure that the HOA turnover process goes as smoothly as possible. That means going over everything — financials, plans, insurance policies, and the like.

 

Understanding the Developer Turnover Process

There are three stages to the process of developer turnover to HOA: Pre-transition or pre-turnover, the HOA turnover meeting, and post-transition or post-turnover. Learn more about each stage below.

 

1. Pre-Transition

When an HOA is still under the control of the developer, the HOA board usually consists of developer representatives. It might appoint a couple of homeowners to serve on the board as well, though this does not happen all the time. Typically, homeowners can express their concerns and oversee the turnover in the form of a transition committee. This transition committee should take the following actions:

 

• Review the Financials

The only way to know that the association is in good financial standing is to review its financial records. This includes financial statements, bank statements, tax returns, budgets, and vendor contracts.

You want to make sure that everything checks out and that there are no suspicious transactions. If you spot anything questionable, ask the developer to clarify.

 

• Perform an Audit

For a more comprehensive study of the HOA’s financials, it is a good idea to hire a Certified Public Accountant (CPA) to perform an audit or something similar. This will cost money, though it is necessary if the association’s financial condition is not up to par.

 

• Inspect the Reserves

The HOA reserve fund consists of cash savings, contributed by homeowners, for the purpose of major replacements and repairs as well as emergencies. Make sure the developer has created a reserve fund account in the association’s name and that it meets the right reserve level. You may need to perform a reserve study to do this.

 

• Stay on Top of Your Insurance

Insurance is paramount to any working organization, homeowners, and condo associations included. Make sure to secure the association’s insurance policies and that you have sufficient coverage. Consult with an insurance expert to determine what your HOA lacks.

 

• Assess Your Need for HOA Management

HOA board members may not always have the time, skills, or resources to carry out their day-to-day tasks. An HOA management company can step in to shoulder some of the burdens. Evaluate your needs to see if you need an HOA manager. If you do, it is best to go with a credible and professional company.

 

2. HOA Turnover Meeting

The official transition of the HOA from the developer to the homeowners takes place during the turnover meeting. During this time, the developer will deliver all pertinent documents to the homeowners (see HOA transition checklist below) and the homeowners will elect its new board.

The laws surrounding turnovers can vary from state to state. Some state laws mandate that a turnover meeting must transpire within a certain timeframe. In Florida, for instance, developers must hand over control of the HOA to the owners 90 days after 90 percent of all units have been transferred to their buyers. This is the most common trigger for an HOA turnover.

Other triggers can include bankruptcy, the appointment of a state court receiver, developer receivership, or if 7 years have passed since a condo’s declaration was recorded. To know what can trigger an HOA turnover in your state, check your state laws.

 

3. Post-Turnover

After the official turnover takes place, the developer or its representative should still be present at HOA board meetings for the next 90 days. This will allow for a smoother and more efficient transition.

Following that, the elected HOA board members can then continue to run the community according to the governing documents.

 

HOA Turnover Checklist

During the HOA turnover meeting, the developer must hand over the following items to the association:

• A copy of the recorded governing documents as well as any amendments and supplements
• A copy of the articles of incorporation
• Association records such as meeting minutes
• All generated rules and regulations
• Director resignation letters as a result of the end of the developer’s control
• All association financial reports and statements:
  • Balance Sheets
  • Income Statements
  • Balance of association funds
  • Control over association funds, including bank accounts and signature cards
  • All personal property of the association as well as inventory

 

If known or available, the developer must also deliver the following items to the association at the HOA transition meeting:

• List of owners, addresses, and telephone numbers
• As-built architectural, structural, engineering, mechanical, electrical, and plumbing plans
• Original specifications specifying all material changes
• Underground site services plans
• Site grading plans
• Drainage plans
• Landscaping plans
• Insurance policies
• Issued occupancy permits
• List of contractors included in the development and construction of common elements
• Lease agreements to which the association is a party
• Contracts (service, employment, etc.) to which the association is a party
• Any other information related to association property maintenance and repairs

 

Taking Action in a Developer Controlled HOA

During the pre-transition phase, the developer still holds control over the HOA. Good developers listen to their homeowners and take care of the community. But, if you happen to have a bad developer, problems can arise.

Although a developer-populated HOA board has the same duties and responsibilities to fulfill as any other HOA board, some developers fail to uphold them. The bad news is that, in most states, developers have power in the pre-transition phase. That does not mean you have no options, though. Here are some things you can do to force developers to change their ways:

• Assemble an Advisory Committee. Consider forming an advisory committee consisting of homeowners. This committee can collect feedback from all homeowners and pass it on to the developers. Of course, an advisory committee can only offer recommendations and has no real decision-making power.
• Take It Up With Management. If your association is already being managed by an HOA management company, try reasoning with them instead. The management company wants the best for the community (and they likely want you to retain their services once the HOA transitions). Therefore, they might be able to get the developer to listen.
• Use the Law to Force a Turnover. If your HOA already meets the requirements for a turnover according to state laws, you can force the developer to start the transition process. Some developers may feel reluctant to do so, but you can hire legal counsel to help you with this.
• Take Legal Action. An HOA lawsuit against the developer is probably not the most appealing choice, but it is sometimes necessary. Consider bringing an injunction pre-transition, though you may need to pay for this yourself. You can also file a suit post-transition on the grounds that the developer-controlled board failed to fulfill its duties.

 

Homeowner Participation Is a Must

An HOA turnover is a critical step that every homeowners or condo association must take. To ensure a smooth transition or, at least, come close to it, homeowners need to take an active role. That means paying attention to HOA business, including its financials and insurance, right from the get-go.

When homeowners receive control of the HOA, many find it hard to manage it without help. HOA management software is the perfect solution for self-managed communities and management companies alike. Schedule a free demo, call us at (800) 626-1267, or contact us online for more information.

 

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Finances are one of the most important and difficult aspects of property management. If you are hoping to improve the financial health of your business, it is imperative to know the property management accounting basics to help you create the thriving business that you desire.

 

Property Management Accounting Fundamentals

What is property accounting? Property accounting is the process of preparing, reviewing, and maintaining the financial records of a rental property, be it residential or commercial. Property management accountants typically perform accounting tasks for rental properties. Though, there are also a number of property management accounting software that you can use to stay on top of your financials.

Whether or not you employ an accountant, use accounting software, or do it yourself, it is essential to understand the basics of property management accounting. In doing so, you can have a better grasp of your overall financial health and avoid expensive miscalculations.

 

Types of Accounting Methods

How do you do property management accounting? The first step is to choose the basis of accounting you will use. There are three types of accounting methods: Cash Basis, Accrual Basis, and Modified Accrual Basis. Most property owners use either the Cash Basis or the Accrual Basis.

 

Cash Basis vs Accrual Basis

One of the most difficult decisions is whether to use a cash-based or accrual-based account system. The basic difference between the two is that cash accounting records transactions at the time that money actually changes hands. Accrual-based accounting records transactions at the moment of completion of a service.

Most small businesses use cash accounting due to its simplicity. But, unlike accrual accounting, cash accounting does not give you an accurate look at your financials. Using a cash-based method can lead you to believe that you have more money than you actually do. This is why accrual accounting is considered the best method. It is also the only method that complies with the Generally Accepted Accounting Principles (GAAP).

Of course, you should still consider your own circumstances to find the best system that suits your needs. Additionally, always be sure to reference local laws when choosing.

 

Setting Up Your Chart of Accounts

A chart of accounts is your master list of all accounts. You use it to classify transactions as well as your assets and liabilities. Accounts are typically classified according to one of five primary types:

• Asset. These are items that you own that have value. Assets can be further grouped into Current Assets and Fixed Assets. Current Assets are assets that you can easily and quickly liquidate (in 12 months or less). Inventory and Accounts Receivable are examples of a Current Asset. On the other hand, Fixed Assets are the opposite. They typically have a lifespan of 12 months or longer. Examples of Fixed Assets include Land, Machinery, and Vehicles.
• Liabilities. These are your financial obligations. In other words, liabilities are money that you owe. These can be further categorized into Current Liabilities and Long-Term Liabilities. The main difference is that you can pay off Current Liabilities in 12 months or less and Long-Term Liabilities in 12 months or more. Accounts Payable is an example of a Current Liability, while Capital Leases and Long-Term Loans are examples of Long-Term Liabilities.
• Equity. This is your financial share of the business. Equity can take the form of cash or assets such as equipment and buildings. Retained Earnings is an example of an Equity account.
• Income. Otherwise known as revenue, this is the money that you earn. Examples of Income accounts include Rental Income, Interest Income, and Sales.
• Expense. This is the money that you spend on bills. Examples of expenses accounts include Utilities, Maintenance Expense, and Office Supplies.

 

Single- or Double-Entry Bookkeeping

Property management bookkeeping can fall under one of two kinds: Single-entry or double-entry.

As its name suggests, single-entry bookkeeping records only one entry per transaction. You enter the account title and input either a positive or negative amount, depending on whether you earned or spent money. This type of bookkeeping is only recommended for small businesses with not much activity.

Double-entry bookkeeping, on the other hand, records two entries per transaction — one in the debit column and the other in the credit column. Most property owners use this method of bookkeeping because you can accurately determine your profit or loss and easily catch discrepancies or fraud. Additionally, with double-entry bookkeeping, you can prepare financial statements straight from your books.

 

Understanding Debits and Credits

A common misconception about debits and credits is that the former is always positive while the latter is always negative. This is not the case. Here is what you should remember when it comes to debits and credits:

• Debits
  • Raise asset and expense accounts
  • Reduce liability and equity accounts
• Credits
  • Reduce asset and expense accounts
  • Raise liability and equity accounts

For example, you charge a tenant, Bob, $1,000 for rent. Under the accrual basis of accounting and using the double-entry bookkeeping method, you would debit Accounts Receivable by $1,000 and credit Rental Income by $1,000. Keep in mind that Bob has yet to pay rent. You have only just charged him. This is why you have increased your Accounts Receivable — because you are expecting to receive money from Bob.

 

What Is a General Ledger?

A general ledger, known alternatively as a nominal ledger, is where you record transactions. The accounts you input in your general ledger follow your chart of accounts. Your general ledger acts as a master repository for all of your accounting data, financial or non-financial. Major financial statements are obtained from your general ledger.

 

What Are the Essential Financial Statements?

Although these can vary from organization to organization, there are three fundamental financial statements that you should understand: the Balance Sheet, the Income Statement, and the Cash Flow Statement.

• Balance Sheet. This financial statement reports your business’s assets, liabilities, and shareholders’ equity. When preparing your Balance Sheet, it is important to keep the following equation in mind:

Assets = Liabilities + Equity

• Income Statement. This financial statement lets you know how much money you earned in a given time period. It deducts your total expenses from your gross revenue to arrive at your net profit or loss. Typically, businesses prepare this statement every month and year.
• Cash Flow Statement. This financial statement reports the amount of cash (and cash equivalents) that goes in and out of your business.

You can try to generate these financial statements on your own, but it is better to receive help from an accountant. Alternatively, many property management accounting software come with the ability to generate financial statements in real-time.

 

Which Property Expenses Are Deductible?

Part of property management accounting procedures is knowing which expenses are deductible. This will allow you to get a good handle on your taxes, though you may still need help from a tax professional. Some of the expenses you can deduct include but are not limited to:

• Management fees
• Repair costs
• Legal fees
• Real estate taxes
• Mortgage interest
• Professional accounting expenses
• Tax preparation expenses
• Maintenance and cleaning supplies
• Insurance

The IRS website also provides small businesses with plenty of information about real estate income and deductions.

 

Additional Rental Property Accounting Tips

 

1. Open a Business Account

Separating your personal affairs from your business affairs is paramount to success. Thus, you should open a business checking account for your rental property. In doing so, you can avoid mixing up your own finances with your rental property finances. If you are managing more than one property, it is a good idea to open a separate account for each one. This way, you can track each property’s finances easier.

 

2. Focus on the Reserve Fund

Thinking ahead is one of the qualities of a successful property manager. Large future projects should always be a consideration while budgeting.

Setting up a reserve fund will prevent you from having to raise resident fees unexpectedly for an unexpected repair, and allows you to save up for expensive repairs and projects both expected and unexpected.

 

3. Budgeting with a Big Picture View

Successful accounting occurs when you not only look ahead to future expenses but when you also look behind. Looking at past budgets can give you a good sense of the areas that need to be changed on the budget as well as the areas that have been managed well. Always keep the past three years of budgets on hand to reference as you work on the current year.

 

4. Reconciling With Your Bank Account

Bank reconciliation is important because it is a method of checking and double-checking your finances. Not only does it protect your business in the event of an audit, but it can also help you find bank errors, duplications, or missing items. This is one of the best ways to ensure a perfect report. Although it can seem tedious to some, reconciling your bank account each month only takes a couple of hours and can even be set up to be automated.

 

5. Research State Laws

When managing property finances, it is extremely important to learn the rules and then abide by them. Whether these laws are primarily on a local or a state level, successful property management accounting requires research of the rules and careful implementation as well.

 

Property Management Accounting Summary

How do you keep books for a rental property? Start by choosing your preferred accounting method, and then move on to setting up your chart of accounts. From there, you can either go with single-entry bookkeeping or double-entry bookkeeping. For double-entry bookkeeping, record two entries per transaction — one for debit and one for credit — in your general ledger. From your general ledger, you can then prepare your financial statements.

If you need help, you can seek property management accounting services from professionals or invest in accounting software. Condo Manager provides HOA management companies and self-managed communities with comprehensive solutions at an affordable rate. Call us today at (800) 626-1267 or contact us online for a free demo.

 

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There is more to finding rental tenants than simply posting an ad online. If you want to find and keep good tenants, you need to follow a system and understand certain laws.

 

How to Find Quality Rental Tenants

Rental property owners are always on the lookout for high-quality tenants. Ideally, all renters would be upright citizens with outstanding rental histories and credit scores. Unfortunately, the reality is far from that. Here are some tips on how to find good tenants:

 

1. Come Up With a Rental Criteria

How do I choose a prospective tenant? The first thing you must do is set the right criteria. When crafting this, make sure to consider everything you are looking for in a tenant. If you don’t know where to start, it’s a good idea to think about what other landlords want in a tenant.

What do most landlords look for in tenants? Typically, landlords want tenants who can afford rent and pay it on time. Tenants should also be amiable and have no attitude problems. You should also take into account certain policies you have.

For instance, if you have a no-pets policy, then your prospective tenant obviously shouldn’t own a pet or is willing not to bring theirs into the property.

 

2. List Your Property Online

The best way to find tenants for rental property is to post an online listing. In fact, 75 percent of renters begin their search for a new residence online.

There’s just no denying it — you can reach a wider market by marketing your rental property through online avenues.

Of course, there’s also an art to creating an online listing for your rental property. When learning how to list a house for rent, start with a compelling title. This usually includes what potential renters can expect from your property. Include the price, number of beds, number of baths, the type of property, and the location. For example: $1,000/mo – 2 BR / 1 BT Apartment in Woodbury.

Describe the property in a paragraph and use adjectives to make it alluring. Mention any extra features or added amenities such as a pool or a view of the city. Your ad should also set expectations, so make sure to bring up the rental application process and any special policies you have. Remind potential rental tenants that they will need to authorize background checks, credit checks, and the like.

 

3. Pay Attention at Property Showings

After you find tenants online, you will need to show the property to interested parties either in-person or virtually. This is a good chance to get a feel of the prospective tenant and gauge their behavior. It’s usually not a good sign if your tenant is rude or is late to the appointment (or doesn’t show up altogether).

Property showings also allow you to ask important questions such as:

• Why are you moving?
• When you do plan to move in?
• Do you have pets?
• Do you smoke?
• Will you be living alone?

 

Tenant Screening 101: What to Check

The search for the perfect tenant doesn’t stop with a rental application. You should also obtain consent from your prospective tenant to conduct certain checks. If a tenant doesn’t consent, then that should be a red flag because it indicates that the person has something to hide. Make sure to check the following:

• Income or Employment Status. You need proof that your prospective renter has the financial ability to pay rent. It’s ideal to find renters with a monthly income at least three times the amount you charge in rent. You can check their income through pay stubs or even call their employer directly to verify the details.
• Credit Score. A credit report will allow you to determine the prospective tenant’s credit score. From that, you can surmise their income to debt ratio. You can have this done for a small fee.
• Background. A background check will let you know whether a prospective renter has a criminal history.
• Rental History. It’s also a good idea to contact the rental tenant’s previous landlords to find out about their past behavior. You can ask whether the tenant paid their rent on time, took care of the rental property, how they behaved, etc.

 

Know Your Federal and State Laws

As a landlord, you should familiarize yourself with the many laws that affect your dealings. This includes laws on a federal, state, and local level.

 

Fair Housing Act

This federal act ensures that all landlords treat all tenants fairly. It was written to prevent housing discrimination against certain classes of people. The act states that you can’t discriminate against tenants based on their race or color, national origin, sex, religion, familial status, and/or disability.

Several states also have their own fair housing rules that landlords must follow. For instance, in California, you can’t discriminate against tenants with certain criminal records. It’s important to check the laws in your state to prevent getting into legal trouble.

 

Landlord-Tenant Law

The landlord-tenant law states the rights and obligations of landlords and tenants. It outlines certain rules about lease agreements and security deposits, too. As a landlord, you should acquaint yourself with the landlord-tenant law so that you don’t accidentally violate the rights of your tenant.

What are the rights of a tenant? Tenants have a right to the following:

• Quiet enjoyment of their home
• Livable conditions
• A lead-free home
• A certain level of privacy

 

Reasons to Deny Tenants

It’s essential to maintain the utmost professionalism when finding and screening tenants. Making decisions based on personal biases or reasons can put you in legal trouble. There are many reasons to deny renting tenants, such as:

• Monthly income can’t cover rent and deposits
• Incomplete rental application
• Doesn’t authorize background, credit, or rental history checks
• Fails to provide you with proof of income or employment
• Gives you fake references
• Has a history of late rent payments
• Has a history of damaging rental properties

 

How to Keep Good Rental Tenants

Quality tenants are hard to find, so when you finally land one, you should do your best to keep them around. Making good tenants renew their lease agreements is much simpler than you might think, though.

How do I keep my tenants happy?

• Take Care of the Property. What do tenants want in a rental property? They want a clean space with nice amenities and working utilities. Taking care of your rental property is one way to ensure your tenants stay satisfied.
• Treat Tenants Equally and Fairly. How do you treat tenants? It’s important to treat all tenants equally, showing no favoritism or disdain for select tenants. You should also treat them fairly and without personal bias.
• Cultivate a Relationship Based on Respect. Respect is a vital ingredient in any healthy relationship, including one between landlords and tenants. When you respect your tenant (and they respect you), they’re more likely to keep renewing their lease.
• Respond. A responsive landlord is something a lot of renters look for. Make yourself reasonably available to your tenants for any concerns they may have. Consider having a dedicated line for emergencies, too.
• Offer Renewal Incentives. Everyone loves discounts and freebies. Think about providing your tenants with a discounted month if they choose to renew with you for another term.

 

The Role of HOAs and COAs

Many HOAs and COAs restrict owners from renting out their property. Association members might think this is infringing on their rights. But, provided the HOA or COA board is acting within the law and its power, it can absolutely restrict rentals.

Some HOAs and COAs may allow rentals, but they typically have rules and regulations to keep them in check. Both HOAs and COAs, though, must also follow federal and state housing laws. That means an association can’t specify the type of tenant property owners can and can’t rent to. Fair Housing laws still apply.

 

It Pays Off

Finding quality rental tenants takes work, but it’s definitely worth the time and effort. When you leave the process up to chance, you can get stuck with a bad tenant who never pays rent on time, causes damage to your rental property, and disrupts the neighborhood.

Managing a property or HOA community can be difficult without the right tools. Contact Condo Manager today for expert solutions designed for HOA management companies and self-managed HOAs. Call us at (800) 626-1267 or reach out to us online for a free demo.

 

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• What Should An HOA Do With Late HOA Payments

Many homeowners know that homeowners associations can place a lien on your property. But, did you also know that some associations, depending on the state, can place an HOA super lien instead?

 

What Is an HOA Super Lien?

Simply put, an HOA super lien is a type of lien that takes a higher priority than all other lien types. A lien automatically attaches to a property when the owner has failed to pay the monthly fees or assessments to their homeowners association. A super lien takes a much higher priority and operates similarly to a property tax lien.

To better comprehend the nature of super liens and how they work, though, you must first understand lien priority.

 

Breaking Down the Priority of Liens

When you buy a house, you take out the first mortgage. This mortgage, recorded first, serves as the first lien on your property. Sometimes, you may need to take out a second mortgage on your home. This mortgage is then recorded second, turning into the second lien. Whether or not a lien is first or second depends on the date the lien was recorded. As such, priority follows the recording date.

The priority of a lien decides which lien holders receive payment first following a foreclosure sale. Most of the time, the first mortgage holder gets all of the sale’s proceeds, leaving little to nothing for second or third lien holders, also known as junior lien holders.

In the context of a homeowners association, liens can be used as a form of covenant enforcement. Homeowners who default on their monthly dues or special assessments will see an HOA lien automatically placed on their property. The lien’s recording date typically follows the date the association’s CC&Rs were recorded or the fees’ due date. The HOA can then later foreclose on this lien.

Unfortunately, HOA liens usually take a lower priority than first and second mortgages, even if the mortgage was recorded after the HOA lien. Many associations have such stipulations written in their governing documents. Some states also deem mortgage liens as superior to HOA liens.

A super lien, though, overrides all of that. In states that allow them, super-priority liens take a higher ranking over all other liens. That includes first and second mortgage holders. Super liens apply to the part of an HOA lien that holds superiority over other lien holders. In such a case, the association’s interest takes priority.

 

The Case for HOA Super Liens

Some say an HOA super lien is unnecessary and harsh for homeowners. But, in reality, they help protect the value and desirability of a community. When homeowners fail to pay dues, the community can suffer maintenance issues and start to decline.

Super liens make sure homeowners associations receive the right amount of dues to maintain their neighborhood. Any late notice or insufficient funds are important and need to be paid. This helps keep the community’s worth high and acceptable for all other homeowners in the association.

 

When Does an HOA Lien Become an HOA Super Lien?

Whether or not your association can attach super liens depends on your location. In addition to the District of Columbia, there are currently a total of 21 states in the country that can give HOA liens the status of a super lien. HOA super lien states are as follows:

• Alabama
• Alaska
• Colorado
• Connecticut
• Delaware
• Florida
• Hawaii
• Illinois
• Maryland
• Massachusetts
• Minnesota
• Missouri
• Nevada
• New Hampshire
• New Jersey
• Oregon
• Pennsylvania
• Rhode Island
• Vermont
• Washington
• West Virginia

These states have differing laws, though, when it comes to how an HOA lien becomes a super lien. In some states, a regular lien can attain super lien status after a fixed number of months of delinquent dues and assessments. For instance, in Colorado, it is six months, while in Nevada, it is nine months. You can learn more about super lien states and their individual laws regarding super liens here.

 

Foreclosing on HOA Super Liens

When a property has a super lien, an association can initiate HOA lien foreclosure. Once the lien enters into foreclosure brought on by the HOA, it could remove the first mortgage.

Because of this, most lenders will usually settle the super lien to put a stop to the foreclosure and, thus, retain their place as the first lien holder.

Lenders will not just let the super lien amount go, though. Typically, they will add the amount to the homeowner’s (i.e. borrower) total mortgage debt. They will ask the borrower to reimburse them for the amount paid. If the borrower refuses or fails to do so, the lender may then initiate foreclosure.

 

What If the First Mortgage Holder Forecloses?

In some cases, the lender or first mortgage holder will foreclose on a property if the owner or borrower stops delivering mortgage payments. When that happens, what will become of the homeowners association lien?

 

For Regular HOA Liens

As mentioned above, first mortgage liens generally take priority over HOA liens. Therefore, when a mortgage holder forecloses on the property with an HOA lien attached, the HOA will not get anything.

It is important to check your own CC&Rs and state laws regulating the priority and nature of liens in your homeowners association. This way, you have a clear understanding of how your liens work and can set the proper expectations. When in doubt, it is always a good idea to consult with a foreclosure attorney with experience handling HOA cases.

 

For HOA Super Liens

As you may know by now, HOA super liens have more pull. Therefore, if the first mortgage holder forecloses in a state that allows HOA super liens, the association gets paid first. The amount the HOA receives depends on state laws, but it is usually a specific number of months’ worth of delinquent dues or assessments.

 

Moral of the Story

Homeowners have an obligation to pay their dues on time and in full. Liens and foreclosures are only two of the possible consequences you might face when you default on your payments. To avoid suffering these repercussions, it is best to stay up-to-date on all your dues payments and leave no room for error.

Collecting and paying dues and assessments can become a headache when done manually. Allow for easy dues collection and payment online with the help of Condo Manager’s software. Call us today at (800) 626-1267 or reach out to us online for a free demo.

 

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