With the rise of the freelance economy, more and more people are working for themselves — either at home, from a backyard office shed, or from a collaborative coworking space, where there are more perks and opportunities to network. These new professional spaces are popping up not only in conventional places, but also in less conventional ones like restaurants, buses, and even churches, as this project by Surman Weston (previous) has done — converting a Victorian-era Methodist church into a co-working space for the architects, an animator, two illustrators and a print designer.
Seen over at Dezeen, architects Tom Surman and Percy Weston transformed the old London church by removing old paint off the walls, and adding new furniture, a wall of adjustable-height shelving, vibrant stained glass walls and a floating staircase. They say:
The diamond motif used here echoes the geometry of the existing timber trusses, while the stained glass panes reference the building’s past as a place of worship. The aesthetic of the project was derived from the existing timber trusses. Sandblasting to remove the many layers of paint applied over the last 130 years revealed the remarkable texture of the original timbers.
The idea was to create a “canvas of textures,” all painted white, which would contrast with the brilliant stained glass surfaces to produce an airy, open space with depth and visual interest.
Besides serving as a temporary coworking space, the design can also transform into a residence in the future. That’s accomplished with the insertion of two mezzanines at either end of the space, which now function as a model-making studio and meeting space, but which can later become a bedroom and a study, say the architects:
The concept embraced the dual purpose required in the brief. Rather than designing a studio that could subsequently be transformed into a home, it combines the warmth of materiality that you might find in a home, with the size and flexibility that is required in a studio or office.
In addition to the central open space that acts as a multipurpose place for work, meetings and meals, a kitchen and bathroom have been added under one of these mezzanines, to facilitate its future conversion into a home.
We talk often about how adapting and reusing existing buildings is a better and more sustainable option than demolishing and building from scratch; not only is there less waste, but it also lends a certain unique appeal that only comes from rehabilitating the old into something into new and unexpected. For more, visit Surman Weston.
One of the benefits of owning and managing properties is the ability to leverage your taxes as a property owner. If you’re not an accountant, however, it can be more daunting than exciting—especially if you don’t know what you can deduct, or how to best position yourself and your income.
We’ve talked with a variety of professionals in the fields of property management, tax laws, and accounting to bring you their best tips for getting the most from your taxes.
1. Don’t forget to deduct repair costs
“If you pay a repairman or other person $600 or more during the year to perform services for a client’s property, you must separately report those payments to the IRS.”
—Stephen Fishman, Tax expert, attorney, and author
2. Claim your home office
“You may not consider your rental income to be a business with a regular office, but it is. You have to record your income and expenses somewhere and that is likely to be your desk or a room in your home. If you use a room or other dedicated space in your home exclusively for your rental activities you can claim a portion of your house expenses as a deduction against your rental revenues.”
3. Add additional revenue streams where possible
“In multi-family properties, look for the opportunity to add services like coin-operated laundry and vending machines, which will not only provide revenue but will add resale value by raising the property’s return on asset value, or capitalization rate.
In single-family homes, offer extra house cleaning and landscaping services to tenants when they sign the lease. They may be happy to pay extra to avoid responsibilities they’d otherwise take on. You can negotiate the rates of independent landscaping and cleaning services, contract them out, and collect a fee as the contractor. For instance, if a cleaner agrees on a $75/month fee, you may offer the service to your tenant for $85/month, increasing your annual revenue by $120.”
—Blake Hilgemann, Property Manager and contributor to BiggerPockets.com
4. Use rental losses to your benefit
“If a taxpayer is an ‘active participant’ in a real estate activity, they can normally use up to $25,000 of rental losses to offset other sources of income. Unfortunately, if a taxpayer’s Modified Adjusted Gross Income (MAGI) exceeds $100,000 those losses begin to be reduced and at $150,000 are phased out completely. Essentially, you can use rental losses to reduce your ordinary income unless you start making too much money.
One interesting exception to this is if you are a real estate professional. In those cases, the entirety of rental losses can be used against ordinary income—regardless of income level. There are other considerations, but the two main requirements are that:
- More than one half of your personal services performed across all businesses and activities are performed in real estate trades or businesses
- More than 750 hours of services are performed in real estate property trades or businesses in which the taxpayer materially participates
As with anything tax related, who exactly qualifies would vary on a case-by-case basis, but property management companies would be in a very good position to qualify as real estate professionals for the purpose of this deduction.”
—Micah Fraim, CPA and best-selling Amazon author
5. Minimize tax liability when you file
“Whether you’re running a property management business full-time or are a realtor who’s working as a property manager on the side, you can take steps to minimize your tax liability as a Schedule-C filer. [For example] track your mileage for every site visit and errand that you complete, which includes making bank deposits, buying office supplies, driving to the post office, affixing for rent signs, showing apartments, and attending meetings.”
—Thomas J. Williams, EA, Tax Accountant & Owner of Your Small Biz Accountant, LLC
6. Join the landlords’ association in your area
“Joining an association will provide you with a wealth of experience as well as sample leases, copies of laws and regulations, and lists of decent lawyers, contractors and inspectors. Some associations may even allow you to join before you buy a rental property.”
—Andrew Beattie, Investopedia
Jessica Thiefels has been writing and editing for more than 10 years and is now a professional freelancer and consultant. She’s worked with a variety of real estate clients and publishers, and has been featured on Forbes and Market Watch. She’s also an author for Inman, House Hunt Network, Homes.com and more.
High-rise living appeals to many people for the wealth of amenities, concierge-level services, convenient location and unique culture. But with this lifestyle comes unique challenges. Close quarters and the need for residents to exercise mutual respect can sometimes lead to friction and conflict. This is when formal policies need to come into play.
“Part of the draw for high-rise living is the diverse cultural experience of an urban neighborhood,” said Andrew Schlegel, CMCA, EVP at FirstService Residential Urban Management Division. “But bringing together a diverse group of people introduces an array of varying opinions, lifestyles and ways of conducting oneself. This can be a great thing, but to prevent the potential negative effects of natural differences, specific policies are a necessity for the association.”
Well-crafted community rules are a tool for creating harmony among residents. The challenge is creating policies and enforcing them in a fair and polite way. Many of the major issues residents face in a diverse high-rise community are complex. Your association may benefit from the help of a good high-rise management company in dealing with many of them. A solid company not only has experience, but also a vast knowledge of the law and a sense for what works best for residents.
Keeping that in mind, let’s take a look at some of the areas where concrete policies can help create order within a high-rise building.
1. Smoking – Yes? No? Restricted?
The hazards of smoking are undeniable. It’s the leading cause of preventable death throughout the U.S. and Canada. But increased fire risks create even more immediate danger for residents living in a high-rise building. That, among other reasons, is why so many buildings are going smoke free…a step you may want to consider if you haven’t already done so.
But how do you get there without potentially upsetting residents? Just take it step-by-step:
A) Form a committee to explore the issue (include owners and board members), and review public health data and research from medical professionals.
B) Seek feedback from your residents via a simple online survey. Ask them how they feel about a smoke-free environment and if they’ve experienced second-hand smoke. Ask them if they’ve seen cigarette butts or burn marks in common areas.
C) Review your governing documents to see what it takes to officially implement this policy, and communicate it clearly to your residents. You can read more tips on how to implement this type of policy here.
2. Pets – Yes or No? Some? What kinds? How big?
There’s a pet for every kind of person, but not every pet is viable for high-rise living. If there are no pet guidelines in your governing documents, draft clear policies that define what types of pets are acceptable, including animal types, size and weight.
The key here is communication – you’ll want to ensure all residents know the rules so they can comply. Remember that there will be common-sense exceptions, such as grandfathering in non-compliant pets. Also, keep in mind that federal law requires that all service animals be accommodated, at no cost to the owner. For a full discussion, read our pet policy article.
3. Flooring – No one wants to hear their neighbors.
Most problems with a neighbor probably boil down to a single word: noise. While you can address this issue with ordinances regarding quiet hours and music/television volumes, real conflicts arise when the problem is the flooring itself.
Some flooring materials make every step sound like a thunderclap, which can make life unbearable for people living downstairs. So what to do? If your governing documents or architectural guidelines don’t already address this, draft a policy that clearly outlines which types of flooring are acceptable and which ones aren’t.
Board members who would like to establish an effective flooring policy should lean on the expertise of architects and acousticians who can go beyond defining acceptable flooring types. These experts lend real knowledge in terms of how the floor should be constructed to minimize sound. Additionally, your new policy should include details about the construction approval process and who can complete the work. Most associations require that unit modifications be performed by a licensed and insured contractor. (Refer to your association’s governing documents for specifics.)
Clearly communicate the new rules to your residents, and you’re on your way to having a flooring policy that keeps the building quiet and fellow neighbors happy. For a deeper dive into how to implement a comprehensive flooring policy, check out this article.
4. Short-Term Rentals – Yes? No? On a limited basis?
The “sharing” economy is growing, but allowing owners to rent their units on a daily or weekly basis through online sites like Airbnb might not always be a good fit for your high-rise community.
Short-term renters are not subject to the vetting that long-term residents of the community undergo. They may be unaware of fire safety codes and other rules in the community that keep everyone safe, and that can be dangerous in an emergency. On the other hand, unit owners living in popular vacation areas might want to have the option to rent their space while they’re not at home. Not only can this generate extra income for the unit owner, but it can also increase property values by making the property more marketable to those looking to make income from their unit. Consider surveying your residents and then implementing the right short-term rental policy for your community.
If your community chooses to ban short-term rentals, don’t be afraid to enforce compliance with penalties. Likewise, create procedures that prevent unauthorized people from entering the premises, and document those instances when they occur. As with all policies, open communication with residents is the key to successful implementation. You can find out more about the sharing economy and how to address this growing trend by downloading our white paper.
There is no doubt these can be tough issues to tackle. But seeking the help of a knowledgeable high-rise management company can help you find clarity, develop a policy and achieve the kind of harmony that defines a great high-rise community. For additional help defining and implementing policy for your high-rise building, contact FirstService Residential, California’s leading property management company.
Driverless cars could become a regular feature of the roads as early as April – at least in California, which has decided to allow fully autonomous vehicles to be tested on the roads (none of those pesky humans who have been present in test drives so far). Arizona has already become a fair-weather center for testing driverless vehicles, thanks in large part to the governor’s support, and Uber announced last week that it has finished testing its self-driving trucks in Arizona and is now beginning to use them to move goods across the state.
It’s not just the U.S., either. The British government launched a review last week of laws governing self-driving vehicles, with the aim of getting autonomous cars on the road by 2021, and other countries around the world are also experimenting with autonomous vehicles.
Clearly a big step for the technology and automotive industries – no surprise that companies working on driverless vehicles include Google and Uber, as well as traditional automakers like Audi, BMW, Ford, GM, Volkswagen and Volvo – the advent of human-less driving could also redirect the traffic of our days, how we live our lives and get around. Perhaps somewhat less obviously, a future filled with autonomous vehicles could also spur some big changes in where we live and work, thus affecting the real estate market in addition to the transportation and tech industries.
Of course, we realize that for all the buzz, driverless cars could turn out to change the world no more than Google Glass or to transform transportation no more than the much-hyped Segway. While the success rate of driverless cars may not be as predictable as some may like to believe, it can still be instructive to peer through the windshield of a driverless future and see what twists and turns might lie on the road ahead.
The value of transit hubs
One question worth considering is what the proliferation of autonomous cars could mean for public transportation and the value of the real estate that has been built around transit hubs.
The proximity of office and residential buildings to public transit hubs has traditionally been seen as adding value to the property by making commuting easy, a phenomenon that would seem to be bolstered by the low car-ownership rates of millennials.
“Clearly, any sort of big transit infrastructure program can act as a huge stimulus for the development of surrounding real estate,” said Scott Homa, a director of United States office research for real estate firm JLL. “It’s starting to emerge as a universal theme across the U.S.”
Sections of the U.S. that have seen real estate development near new rail systems or train stations include the Somerville suburb of Boston; Chicago’s Fulton Market; downtown Kansas City, Missouri; and Austin, Texas, the New York Times reported last spring.
It’s possible that the availability of driverless vehicles could, like the increasing prevalence of ride-sharing, simply become one more reason for urbanites to avoid buying a car – thus making proximity to public transit at least as valuable as before.
But there’s another possibility, too: The introduction of a driverless vehicle option could make access to public transit less important to commuters. And that could have a major impact on the needs and demands of the buyers, tenants and renters of office and residential properties (whether single-family or multifamily).
“AVs [autonomous vehicles] are expected to significantly reduce travel cost, time and congestion, while increasing safety,” accounting firm KPMG said in a 2017 report on the impact of autonomous vehicles on the public transport sector. “Cost-efficient self-driving cars could change commuter preferences away from conventional public transport.”
It’s important to remember that it’s not just privately owned four-door sedans that could be roaming the roads without any humans behind the wheel. The Netherlands, China and Switzerland have been testing self-driving public transportation options such as electric driverless shuttles with capacities of up to nine people, as well as full-sized driverless buses.
With driverless cars, shuttles and buses thrown into the mix, offices and residential buildings that might previously have been seen as less attractive for commuters because of their distance from transit hubs could become more appealing than before. Seen through a real estate lens, that greater appeal could translate into increasing demand and rising property values.
The flip side is that properties that commanded high value due to their proximity to transit hubs could suddenly find themselves losing their edge.
Even in neighborhoods already served by public transit, autonomous vehicles could potentially become a threat to existing transportation systems. By supplementing public transit – or in some cases, even replacing it – autonomous cars could potentially render the existing public transportation system less important, ultimately voiding the assumption that proximity to transit hubs boosts property values.
The need for parking
Many of us drive to work in the morning and park near the office, where our cars sit unused until we’re ready to head home at the end of the day. The average privately owned car in the U.S. is in use just 5% of the time and spends the rest of the time parked, according to architecture, planning and consulting firm Gensler.
“America’s parking footprint, estimated at 500 million parking spaces, consumes more land than Delaware and Rhode Island combined,” Gensler said in a report on driverless cars. In New York City alone, parking covers the equivalent of two Central Parks.
But that picture could change to the extent that autonomous vehicles roll into action.
If driverless cars really do put the pedal to the metal, one ramification of having a car zoom away as soon as you get to your destination could be a reduced need for parking lots – which are, of course, a form of commercial real estate, even if they typically don’t involve buildings.
“AVs remove commuters’ demands for street and lot parking,” KPMG said in its autonomous vehicles report. Consulting firm McKinsey & Co. estimates that autonomous vehicles could reduce the need for parking space in the U.S. by more than 61 billion square feet.
That’s because driverless cars could potentially pick people up from their homes, drop them off at the office or the mall and then leave to park in a less prime area – or, like taxis, won’t even need to park, but will just move on to the next customer and the next trip.
Uber, already a popular alternative both to cars and to public transit, in November agreed to buy 24,000 SUVs from Volvo to form a fleet of driverless vehicles. Uber has said its driverless cars could hit the roads as early as next year.
A reduced need for parking could have a mixed effect on commercial real estate.
It could reduce the real estate costs for owners who currently assume they need to be able to provide parking, and it could spark construction and development on the site of existing parking lots and garages, such as 143 W. 40th Street and 14 S. William Street. Both Manhattan sites are among the 300 locations run by Icon Parking, New York City’s largest parking lot operator, which would presumably need to decide how it wants to change lanes should driverless vehicles lower demand for parking.
On a larger scale, in densely packed cities like New York, where land is at a premium, a diminished need for parking lots and garages could have a dramatic effect on the supply and demand equation. If there were to be a sudden influx of land available for redevelopment (and yes, that’s a big if), that could go a long way to creating a buyer’s market.
And once we’ve got driverless cars pulling up in the pretty near future and reducing the utility of parking lots, the next question is: What’s going to happen to those parking lots?
The answer: We don’t know what exactly they’ll become, but it’s safe to say that if all the ifs and whens come to pass, those suddenly superfluous parking lots and garages will be turned into something, meaning increased construction and development.
Driverless cars are increasingly getting the green light. Whether they’ll become merely one more transportation option or fundamentally alter the way we go is still unclear – but if it’s the latter, transportation is not the only industry that will be disrupted. The prospective ubiquity of autonomous vehicles might ultimately turn out well for commercial real estate as a whole, but we would be wise to expect some potholes along the way.