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Hi Everyone,

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I hope you are doing well. 

 

Just as I always have, every Sunday evening I sit down and work on my vacation rental business for a few hours.  I generally update my vacation rental listings, send my housekeepers an updated cleaning schedule, input door codes into my Schlage link locks, charge credit cards, send updated invoices showing that I charged the guest’s card and send directions to my guests.  And last Sunday was no different than a usual. 

 

Monday morning I received a reply email from an updated invoice from one of my guests.  It said, “Christine, my credit card company called me on Sunday to verify the charges for the rental payment.   I totally forgot about the rental payment and I did not recognize charge so I denied the charge.  This morning, I checked my email and only now did I realize that the charge was for the rental.  Can you please verify whether or not the charge went through?”

 

Okay so this is a first!  I have never had anyone deny the charges (on purpose or by mistake).  So my first call was to my credit card merchant account company to see whether or not the charges did indeed go through.  As of that moment, it had.  But they told me if the card holder denied the charges, it would show up on my account as a charge back.  My best bet would be to call the card holder and have them immediately call their bank and see if they can authorize the charges.  If the renter is not able to get the denial reversed, it would show up on my merchant account as a chargeback, which would have fees associated with it and could affect my credit standing (and rates).  Since all of this happened on a Sunday, there’s a good chance that it will indeed be able to be reversed with no problems.  I contacted the renter immediately and had him call his bank.  This time, everything worked out—disaster averted.

 

But this got me thinking.  I have had my personal credit card company call me to verify charges that I have made.   It seems that the fraud departments are becoming overly cautious.  If this happened once, it could certainly happen again. 

 

So, yet again my rental agreement enters its next evolutionary phase—I added another clause to my rental agreement stating if the renters deny the charges (even by mistake), then there will be a $50 fee added to their balance.  I have also altered my “verbal spiel” when taking reservations.  I am now telling  my guests that there is a chance that their credit card company may  call to verify the charges and if they do, be sure to approve the charges! 

 

After renting my homes for 15 years, even I still have to tweak my agreements on occasion. 

 

Happy Renting by Owner!

 

Christine Karpinski

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taxdeductions.jpgHi everyone!

 

If you are like most successful vacation rental owners, tax day means sending a check rather than receiving a refund, which also means that we’re the least likely to send our tax returns in January. 

 

Over the past few weeks, I have spent a considerable amount of time gathering information to send to my accountant so she can do my taxes.  After several years of being a vacation rental owner, I pretty much have the process down to a science.  But the only thing we have not figured out is how to do it quickly!

 

After I am done sending all the spreadsheets to our accountant, I also take this opportunity to look at my bills and see if there are any places where I can cut some corners.  And I also make it a point to set up schedules and budgets for maintenance and capital improvements for the current year. 

 

While looking at my bills for one of my properties, I noticed that my power bill increased significantly over the prior year.  I also noticed I had three service calls for in 2010 for the air conditioner and one already in 2011.  The HVAC system is over ten years old.  I called my HVAC guy and talked to him about it.  He said the unit could last another couple of months or even years but it was definitely nearing the end of its life.  I decided to go ahead and replace the HVAC system now rather than chance it.  This will accomplish three things: it should lower my power bill, since the new one is much more energy efficient, it takes care of necessary capital improvements for 2011 taxes and it is preventative maintenance.

 

I also looked at my cable, internet and phone charges for some of my older properties.  I tend to do my research when first setting up all the services, getting the best rates, but after everything is in place, I just pay the bills and never think about it again.  Now days, many companies offer bundled services—one rate if you use the same company for everything.  So I called the cable company and I ended up saving $80 per month with one of my properties and $60 per month for another property that’s a savings of nearly $1700 per year!

 

One quick reminder for all the vacation rental owners who filed and received compensation for the BP and/or GCCF loss of income claims:  You are required to claim any money you received from your claim.   You should have gotten a 1099 for all payments but even if you didn’t, you still should claim that income. 

 

If you still have not filed your taxes, you have one week from today to do so—taxes must be post marked by April 18, 2011.  Be sure to check out the list of deductions that you can take for your vacation rental property here.

 

Happy Renting!

Christine Karpinski