Category Archives: MANAGEMENT

Pay Mortgage on or after the 1st.

Hey all, Just a short accounting tip for your BNB and to let you know that we are still alive and running our BNB.

In the meantime, here’s an easy accounting tip.

If you are making mortgage payments for your property, it helps cleanup your accounting if you do not make your payments before the 1st of the month that your payment is due for.

In other words, if you need to make a mortgage payment for April, make the payment April 1st or sometime after that and before the date that you will get charged a late payment. If you want to make January’s payment, do it in January.

For example,  even though you might get anxious and send out some kind of bizarre positive thoughts into the netherworld of computerized mortgage transactions, maybe trying to earn some kind of imaginary digital karma, better not to make the payment on March 29 since your accounting software may want to apply all charges to the month you actually make the payment – this  gets more complicated if you have any compounded charges on your mortgage like your landlords or flood insurance… and it looks goofy on your annual summary.

Essentially, this is helpful is when you do your tax accounting for the year everything just makes more sense. Your payments correspond to the appropriate month and if you’re talking about January’s payment, the correct year.

 

Please like, share, comment, follow my blog or contact me if you have any questions, or if you’ve got some nice tips.

CKY

 

Copyright © 2018-2019 Challen YeeAll Rights Reserved.

 

Is your BNB like another child?

Writer’s note: I wrote this article several weeks ago but it seems like a good time to post it. I may not post another article for a while as events can blur life at times. We thank our guests for bringing their bright light to shine.

Talk to anyone who is starting their own business and they will likely, albeit sometimes grudgingly, admit their business is like adopting another baby because its survival depends on you. Now you realize you have something you need to protect that no one else cares about, except for your booked guests who are counting on you to guarantee their plans for accommodations. Oh, and your mother most likely, because mothers almost always like to se their child be successful at something.

There is certainly a wide gamut of attitudes towards people who are running an BNB, everything from being non-aware, don’t give a hoot, to those neighbors who are afraid of their street becoming the next “DELTA HOUSE” (e.g. the fraternity in the movie comedy classic Animal House).

BNB? What are you talking about? Aren’t you just renting out some rooms, and money just starts falling off the trees … It seems so easy, right?

Every neighbors worst nightmare, a BNB taking the form of Animal House with toga parties every night. (Image credit: Coral Gables Art Cinema).Image may be subject to copyright.

No, my friends, unlike our corporate jobs, if you don’t do anything and you decide to not attend to run things, your little baby will die. That’s the responsibility a host takes when they set out on the adventure of renting out their place to guests.

AirBNB, like other companies like LYFT and many other service oriented companies that help serve as the interface between consumers and proprietors, greatly eases the difficulties related to money handling and advertising while making it easier to take the first steps of running your own business, including paying taxes.

Unlike LYFT, however, taking reservations, if you’re doing it right, is a 24/7 deal. I remember running my parent’s family business of parts sales and repair of electric cars and you, yep, you can get customer calls on Sunday complaining about their broken down electric truck, especially from one of our many family-owned flower nurseries back in the day when Silicon Valley was more agricultural than technical, but you usually do not get messages and inquiries at 4 am (Pacific Standard Time), like you might get from a guest sending an inquiry from Germany or Israel like you would running a BNB.

Despite the high tech assistance, however, it does not relieve the providers of the need to perform with as much excellence as possible, no matter which business model you choose, whether it’s accommodations, driving, or any other service and this new wave of internet-based businesses seem to be highly linked to customer reviews. Every job is subject to scrutiny and a broadcast to the public.

When was the last time your corporate job was reviewed and posted on the internet for everyone to see?

So if you have critics in your life, let them critics criticize, that’s what they do, it’s in their DNA.

Whether you are running a hot dog stand or a hard driving CEO of a tech start up, just do what you are willing to put forth the energy and resources to do and stick to it if that’s what you are willing to put up with to achieve your goals. No one is going to take responsibility for your child other than you.

Please like, share, comment, follow my blog or contact me if you have any questions

CKY

 

Copyright © 2019 Challen YeeAll Rights Reserved.

 

 

 

 

9 Tips for Facing an Unoccupied Month

Have you ever looked at your BNB schedule and see that after your current guest, you have no one booked for the next 30 days. It does give you a sinking feeling, especially if you’re relying on the income to survive.

 

Does your reservation calendar look like an empty beach? (photo of Drake’s Bay, CA north of San Francisco – by Challen)

 

There’s a number of things you can either try or consider since running a BNB you can’t really go out and start rounding up guests passing by with a lasso.

 

Here’s 9 tips, not in any particular order:

  • (1) Update your website or listing with new photos, better photos, or a catchy write up or title. So many listing around her promote Stanford, and if the listing actually resides in or near Stanford, that’s a good boost.

 

  • (2) Try lowering your prices under the next relevant search level. For example, lower them under the next $50 mark (i.e $250, $300, $350, $400, $450, etc). Searchers may be setting upper price limits to narrow down their choices.

 

  • (3)Take some faith in how guests tend to book your listing. Maybe you’ve had a lot of guests book within a week instead of two months ahead (like we’d all like to see that).

 

  • (4) Try “Instant Booking” (Airbnb). What this allows is for greater exposure to your listing as your will show up for both “Instant” and non-instant, instead of just non-instant listings.

 

  • (5) Try removing the extra guest costs if you are using them just to make the cost calculation easier.

 

  • (6) Update you listing to become more friendly to a guest. For example, use a keypad or other self-service mode of entry. This way a business man or woman doesn’t need to call you at 2 am to get a key or wonder if the key is actually in the hideaway place that you wrote.

 

  • (7) Offer something special (like food or other service), make the stay more attractive.

 

  • (8) Keep the darn place clean inside and in good order outside. It doesn’t matter of the guest is staying at a mansion or Motel 6,they want a clean place to stay. No one likes to stay in a beater. Take very positive steps and make amends in the listing and comments to make your listing a non-beater if yov’ve been reviewed as being on the dirty, trashy, or nasty side.

 

  • (9) Treat each guest and inquiry with respect and respond as soon as possible (if not immediately). Remember, you are in the hospitality business, not just a landlord or property manager. In fact, you may be the only ambassador of your town or neighborhood that the guest from another country may ever know.

 

Please like, share, comment, follow my blog or contact me if you have any questions, or if you’ve got some nice tips.

CKY

 

Copyright © 2019 Challen YeeAll Rights Reserved.

 

Staying Connected with Guests

Once you’ve got your booking, you’ve established communication with either the guest or travel coordinator for your guests.

As a host or as a guest, you will want to know which is the best way to connect in case there are any questions of concerns. In other words, “How will you communicate when your guests arrive?”

With Airbnb, they use a messenger within their APP that allows convenient and exclusive communication channel. This is the preferred method for all Airbnb host/guest communications.

However, this is not always available, or if you are not an Airbnb or the guests are not an airbnb member. In this case, as a secondary means, a local cell phone number is often used for text messaging or, worst comes to worse, or an situation exists that requires immediate and confirmed communication.

Another variation that I’ve used recently is the text option within the Airbnb APP.

This may be needed when the guest is from a foreign country and their web access may cause problems with their Airbnb APP that’s set up for outside the USA.

My experience using the message-their-private- out-of-the-USA-phone number works very well.

It’s still not quite as nice as keeping everything under one roof but it works well indeed.

Another app that guests like to use is WHATSAPP. because they know my cell number and I am a user of WHATSAPP, sometimes I’ll get an unexpected communication through this secure means.

The moral of the story is, before a guest arrives, it’s nice to work out these issues if you suspect there will be any problems. The worse thing is if they cannot enter the house AND they cannot contact you. (knock on wood!).

Please like, share, comment, follow my blog or contact me if you have any questions

CKY

 

Copyright © 2019 Challen YeeAll Rights Reserved.

 

BNB Value vs Property Tax

Here’s a Palo Alto near-specific problem. 

Please see the appropriate professionally certified advisor before making decisions based on what you find in the article’s content.

AND See legal Disclaimer at bottom.

Ok, let’s get on with the article…

Everyone complains about the prices in Silicon Valley, but Palo Alto takes the cake.

In a recent news article, the Palo Alto Zip Code 94301 is the record holder for highest average priced real estate in the nation, which generally translates to, expensive to own real estate, not just expensive to buy.

PROPERTY TAXES

California’s property tax  which amount to about 1.1% of your market value. That is, unless you fall under Prop 13/58 protections. There are usually other additional costs attached to your property tax, like county services or other smaller taxes, but 1.1% is the California State chunk the would be often  more than most people’s salaries. Let’s call the full market value times 1.1% “RULE #1”.

So you City Planners, before  you let a company like Google or Facebook start a big office in your little town, make sure your residents will likely be hammered with ever increasing home property values and therefore RULE #1. (unless you are in a State that does not tax property).

It may be  possible you might qualify to be waived from the market rate-based property taxes on inherited property. That’s assuming the aggregate base factor for your parents property tax is under 1M.

 

SOME RELIEF IF YOU

QUALIFY AND APPLY

BASE FACTOR IS, for those of you who do not know, the value the property tax is based on when your parent died, NOT the market value. Please consult with a Tax Advisor, but you need to APPLY for the Prop 58 Exemption (for investment properties). IF YOU DO  NOT APPLY you will suffer the consequences and your children will hate you for life for being such a ignorant poofball. Be alert, this application is time dependent after the death of your parent.

There’s good news: if the house was your parent’s primary residence, you have a 100% exemption to reassessment to market, unless you have to buy portions of it from your siblings then RULE #1 applies. Once again, please consult with a Tax Advisor who is educated in estate law and property tax laws if there is a chance you can avoid RULE #1.

And as you know, finding a single property under $1M in this area is virtually impossible in Palo Alto (unless you’re talking about EAST Palo Alto). However, if your aggregate investment properties’ BASE FACTOR all amount to less than $1M, you will have a complete Prop 58 exemption (please see disclaimer at bottom of article). If the aggregate Base Value exceeds $1M, then you will need to select which $1M of value will receive the exemption. The others will be reassessed at current market value.

The other good news is, if you have to speak to the Santa Clara County Tax Assessor’s Office, you will find some professional and helpful clerks to make sure you are pointed to the right info related to some tax exemption possibilities. Please seek their guidance and CHECK IF THESE RULES APPLY TO YOU.

 

My little RULE #1 RANT

The sad fact is, in order for a lot of residents of this area to survive, they need to rent out a room or a “granny unit” to someone to have the extra income to pay for the drudgery of RULE #1. Keep in mind what I said, many rent out just to pay the property tax, not to have extra money to send the kids to college or pay for a vacation – just to pay the damned tax.

SO the injustice is, the only people who can afford to pay the higher taxes are even more wealthy people while the less wealthy people get screwed because all of a sudden their taxes are unreal.  SO…., just some dynamics to think about in regards to taxing people to kingdom come linked to their private property or even their primary residence values… values that they have little or no control over. Sounds like slick way to rip off private property.

So which State doesn’t charge property tax?

So what does this have to do with a BNB?

Some link VALUE to NIGHTLY RATES

While it is true that there is supply and demand for accommodation services, and that raises the average price of lodging in Palo Alto and the surrounding areas, the tax responsibility is probably not on the radar of the average guest who decides to report to the world that, “there wasn’t enough value for the price at your place” (when in actuality it’s the whole expensive area, not just your place). Well…. one 4 out of 5 rating isn’t bad, but maybe we’re getting too technical.

I remember the first time we received a “4” for “Value” instead of a “5” from one of our great guests (I’m not being sarcastic, he was an excellent guest), and I actually messaged him privately wondering what his rational was. He was nice enough to give us his point of view citing the area is expensive.  Yeh, so even though we should not take it personally, it shows up on the review of our place, not Palo Alto, the City with the most expensive real estate and therefore some of the highest taxes in the United States.

OK, i’m cool now. I promise not to explode.

BTW, I don’t ask guests ever again since the first guy, why they decide on “4” instead of a “5” (LOL).

In actuality, I take a survey of area listings and have to determine what I believe is a “fair” price for what we have to offer. We’re doing alright so far.

Please like, share, comment, follow my blog or contact me if you have any questions

CKY

 

Legal Disclaimer: please note, I am not a tax advisor, or claim to have an certification to offer legal advice in the matters mentioned in this article or any post in my blogs, websites or other social media. You MUST consult with the appropriate certified legal representative to determine the facts of any matter related to or mentioned in this article or any article under my domains that may have any legal consequences before making any decisions.

 

Copyright © 2019 Challen YeeAll Rights Reserved.

Learn by jumping into chaos

OR “How I got involved in property management”

My current work involves Acupuncture and Oriental Medicine to being an out to pasture IC Layout Design Engineer, and I definitely did not become a property manager by seeking it out – it unceremoniously yanked me in.

I was  drawn into property management to save my mom from trouble and by extension, our whole family from trouble back in 2007. Sound melodramatic? It may have been dramatic, but definitely not mellow.

When I graduated from the Masters Program in Traditional Chinese Medicine (TCM) in the Spring of 2007 from Five Branches Institute (Santa Cruz, CA)  the last thing that was on my mind was becoming a property manager or dealing with problem tenants.

Part of my Chinese and Western Medicine library

The biggest thing on the mind of a TCM graduate is studying to successfully pass the California Licensing exam for Acupuncturist.  I had self-sponsored my way through this multi year process and just had about two months to prepare and with hopes of being able to focus on my studying to take that exam in Sacramento. I was ready to embark in my dream of a new life’s work.

I had left my Silicon Valley engineering career on the last day of 2002 and I had completed my Master’s! It was… awesome! It was a mountaintop experience, just having spent 4 years with some of the most kind and amazing people who were the students and teachers. I thought I could just begin a life of a health hermit helping people with their health problems and put the stress of Silicon Valley life behind me.

But NO, fate had another deal waiting for me.

Little did I know that in the previous couple months before my graduation, my mother who managed her own investment properties, was having problems obtaining back rent payments and then received a letter from the tenant complaining about the condition of the property.

Mom, who was about 83 years old at the time, was a kind landlord, though a bit too trusting in her tenants to help take care of her properties, and things were looking a little too legalistic in this one tenant’s written complaint that was carefully worded with some nefarious implications. In other words, it wasn’t just a simple, “Hey, our hot water’s out , could you send a plumber?”

The week after I graduated from Five Branches, I was set to study for my Licensing exam, so I did not go with my mom to visit the property and the tenant. She asked me if I wanted to go, but I wanted to begin studying. I wanted focus, be at one with my studies 😉

To cut to the point, when I heard how the visit went I was bothered. I knew just enough about how things should go to agitate my concern.

Having spent several years working with my parents, helping them with their businesses, full time in the late 1980’s and on my free time in the 1990’s. Spiritually and emotionally, I hardly had time to breath the fresh air,  it felt like I was being recalled to military service.  (C.K. YEE, we need your ass back out in the front lines, forget your Zen Meditation crap. You better get your seabag loaded on the boat, we’re getting underway) ;(

Considering I was not into property management before this event (though in 1989, I almost went for my real estate license), I am not sure why I was so willing (albeit a bit grudgingly) to take up the burden of dealing with this tenant for my mom but I immediately made clear that I would deal directly with the tenant. I wanted to make sure that my mom (and our family) would take this situation more carefully and so I took the matter into my own hands.

Looking back, I cannot tell you what I saw in myself, to think I was any better qualified to deal with this except, maybe, I would be willing to sit an listen to the tenant like I had practiced so many times with patients…. It’s not that simple though.

Over the next 5 months, I worked with the tenant.  Ultimately, they understood they had to move out because we planned to work on the house, which was in need of repairs and that for their safety, they needed to vacate the property.

In the process, I developed a close relationship with a local realtor, who is the most savvy realtor related to East Palo Alto that I’ve ever known, as well as an eviction attorney’s office whose paralegals were God’s gift to mankind, all of who I received valuable advice on landlord-tenant rights and property management.

It was not an easy process. Somehow, I figured out how to navigate the problem which included a few face to-face meetings, many attempts to communicate and even an offer for them to purchase the house, which they chose bail out of the opportunity.

The repair process took over 6 months to finish.

In June 2007, when I graduated from Five Branches, I weighed 150# and by August 2007 , when I took my Acupuncture licensing exam, I weighted 135#. I lost 15 pounds from anxiety and depression at the same time I was studying and managed to pass my Licensing exam. When I learned I passed the exam, it should have been a big-time celebration for me, but it was overshadowed by the ongoing tenant situation.

I received my Acupuncture License in October 2017 and soon began working out of a clinic in nearby Los Altos.

As I recall, there was talk by the Acupuncture Board that we might have to retake the exam due to some alleged cheating by some fringe group, but fortunately, I was saved  from that insanity.

Not quite the way I would have planned it but I did it. I DID IT.

Ever since that time, I have been involved in property management. However, due to the hard times of 2008 had to (and was able to) reenter the market as a engineer for several years more (while pursuing Chinese medicine part-time), but that’s how I get started as a property manager.

Please like, share, comment, follow my blog or contact me if you have any questions

CKY

Copyright © 2019 Challen YeeAll Rights Reserved.