Phoenix metro becomes virtual investor's housing market

Buying sprees by billion-dollar hedge funds and real-estate investment firms have investors owning nearly 20 percent, or one out of every five, of the region's single-family houses and condominiums, according to an Arizona Republic analysis of recent sales data.

That's double the number of rentals considered normal in metro Phoenix in 2000, according to housing-market analysts.

Although it is too soon to gauge the impact of such a large increase in rental properties, the jump in investor-owned properties has the potential to change the character of neighborhoods, influence the options available to other homebuyers and ultimately alter the trajectory of the region's housing recovery.

Read more: Phoenix metro becomes virtual investor's housing market

Phoenix metro becomes virtual investor's housing market

Buying sprees by billion-dollar hedge funds and real-estate investment firms have investors owning nearly 20 percent, or one out of every five, of the region's single-family houses and condominiums, according to an Arizona Republic analysis of recent sales data.

That's double the number of rentals considered normal in metro Phoenix in 2000, according to housing-market analysts.

Although it is too soon to gauge the impact of such a large increase in rental properties, the jump in investor-owned properties has the potential to change the character of neighborhoods, influence the options available to other homebuyers and ultimately alter the trajectory of the region's housing recovery.

Read more: Phoenix metro becomes virtual investor's housing market

Metro Phoenix a seller's (and landlord's) market

Renters looking for houses in metro Phoenix are experiencing much of the same frenzy as buyers.

As reported on Page A1 today, new data from the Arizona Regional Multiple Listing Service and real-estate analyst Mike Orr show the supply of houses for rent in the region is nearly as tight as the supply of homes for sale, and the number of leases signed in the past few months is at record levels.

High demand for rentals is another indicator of metro Phoenix's housing-market recovery.

Rob and Sandra O'Dell discovered how competitive metro Phoenix's rental market has become when they began looking for a house in July. Rob O'Dell is The Republic's new investigative reporter, specializing in computer-assisted reporting. The couple drove up from Tucson on a Saturday to check out a central Phoenix rental home and found themselves at an open house with 30 other prospective renters.

Open houses for rental homes is a new trend in metro Phoenix and evidence of the high demand for the houses. Dismayed and surprised by their experience, the couple spent the next weekend in Phoenix looking for a place to rent. But it was "frustrating and exhausting," Rob said. Most rental houses they checked out already had multiple applications from renters or were in bad shape.

The charts in today's paper and online at money.azcentral.com show the median rents for homes and ZIP codes where rentals are leasing the fastest -- data that have never been reported. To find the addresses of most rentals, prospective tenants should call a real-estate agent who has access to the ARMLS database.

"Rentals have become a growing business for the region's real-estate agents," said Chris Heagerty, a director with ARMLS.

She said the number of rental contracts every month now is almost half the number of metro Phoenix's sales contracts.

The O'Dells were on their way back to Tucson when they drove through the Coronado neighborhood and found a house where the owner was just putting up a "for rent" sign. The couple checked out the house and offered to give the landlord the security deposit then so they wouldn't lose the house.

"I wrote her the $1,000 check on the spot," Rob said. "We had our place to live in Phoenix, and I had one of my first stories for The Arizona Republic."

by Catherine Reagor, columnist - Sept. 13, 2012 The Republic | azcentral.com




Metro Phoenix a seller's (and landlord's) market

Metro Phoenix a seller's (and landlord's) market

Renters looking for houses in metro Phoenix are experiencing much of the same frenzy as buyers.

As reported on Page A1 today, new data from the Arizona Regional Multiple Listing Service and real-estate analyst Mike Orr show the supply of houses for rent in the region is nearly as tight as the supply of homes for sale, and the number of leases signed in the past few months is at record levels.

High demand for rentals is another indicator of metro Phoenix's housing-market recovery.

Rob and Sandra O'Dell discovered how competitive metro Phoenix's rental market has become when they began looking for a house in July. Rob O'Dell is The Republic's new investigative reporter, specializing in computer-assisted reporting. The couple drove up from Tucson on a Saturday to check out a central Phoenix rental home and found themselves at an open house with 30 other prospective renters.

Open houses for rental homes is a new trend in metro Phoenix and evidence of the high demand for the houses. Dismayed and surprised by their experience, the couple spent the next weekend in Phoenix looking for a place to rent. But it was "frustrating and exhausting," Rob said. Most rental houses they checked out already had multiple applications from renters or were in bad shape.

The charts in today's paper and online at money.azcentral.com show the median rents for homes and ZIP codes where rentals are leasing the fastest -- data that have never been reported. To find the addresses of most rentals, prospective tenants should call a real-estate agent who has access to the ARMLS database.

"Rentals have become a growing business for the region's real-estate agents," said Chris Heagerty, a director with ARMLS.

She said the number of rental contracts every month now is almost half the number of metro Phoenix's sales contracts.

The O'Dells were on their way back to Tucson when they drove through the Coronado neighborhood and found a house where the owner was just putting up a "for rent" sign. The couple checked out the house and offered to give the landlord the security deposit then so they wouldn't lose the house.

"I wrote her the $1,000 check on the spot," Rob said. "We had our place to live in Phoenix, and I had one of my first stories for The Arizona Republic."

by Catherine Reagor, columnist - Sept. 13, 2012 The Republic | azcentral.com




Metro Phoenix a seller's (and landlord's) market

You can attach landlord's account

Question: I won a judgment against a former landlord in small-claims court for failure to return my security deposit. How can I make sure he pays me?

- Martin Diggs

Phoenix

Answer: The landlord is now required by the court to return your deposit, but that doesn't mean he will. Your best option is to have the landlord's bank account garnisheed. To do this, you need his bank-account information. You can probably get this off the back of one of your canceled checks paid to the landlord after he deposited it. Take that bank-account information to the same court that awarded you the judgment and ask for a "non-earnings" garnishment. Once the court provides this document to you, give it to a process server, who can serve the document on the landlord's bank. The bank should start garnisheeing the account immediately.

by Dave Cherry The Arizona Republic Jun. 6, 2011 12:00 AM



You can attach landlord's account

You can attach landlord's account

Question: I won a judgment against a former landlord in small-claims court for failure to return my security deposit. How can I make sure he pays me?

- Martin Diggs

Phoenix

Answer: The landlord is now required by the court to return your deposit, but that doesn't mean he will. Your best option is to have the landlord's bank account garnisheed. To do this, you need his bank-account information. You can probably get this off the back of one of your canceled checks paid to the landlord after he deposited it. Take that bank-account information to the same court that awarded you the judgment and ask for a "non-earnings" garnishment. Once the court provides this document to you, give it to a process server, who can serve the document on the landlord's bank. The bank should start garnisheeing the account immediately.

by Dave Cherry The Arizona Republic Jun. 6, 2011 12:00 AM



You can attach landlord's account

You can attach landlord's account

Question: I won a judgment against a former landlord in small-claims court for failure to return my security deposit. How can I make sure he pays me?

- Martin Diggs

Phoenix

Answer: The landlord is now required by the court to return your deposit, but that doesn't mean he will. Your best option is to have the landlord's bank account garnisheed. To do this, you need his bank-account information. You can probably get this off the back of one of your canceled checks paid to the landlord after he deposited it. Take that bank-account information to the same court that awarded you the judgment and ask for a "non-earnings" garnishment. Once the court provides this document to you, give it to a process server, who can serve the document on the landlord's bank. The bank should start garnisheeing the account immediately.

by Dave Cherry The Arizona Republic Jun. 6, 2011 12:00 AM



You can attach landlord's account

You can attach landlord's account

Question: I won a judgment against a former landlord in small-claims court for failure to return my security deposit. How can I make sure he pays me?

- Martin Diggs

Phoenix

Answer: The landlord is now required by the court to return your deposit, but that doesn't mean he will. Your best option is to have the landlord's bank account garnisheed. To do this, you need his bank-account information. You can probably get this off the back of one of your canceled checks paid to the landlord after he deposited it. Take that bank-account information to the same court that awarded you the judgment and ask for a "non-earnings" garnishment. Once the court provides this document to you, give it to a process server, who can serve the document on the landlord's bank. The bank should start garnisheeing the account immediately.

by Dave Cherry The Arizona Republic Jun. 6, 2011 12:00 AM



You can attach landlord's account

You can attach landlord's account

Question: I won a judgment against a former landlord in small-claims court for failure to return my security deposit. How can I make sure he pays me?

- Martin Diggs

Phoenix

Answer: The landlord is now required by the court to return your deposit, but that doesn't mean he will. Your best option is to have the landlord's bank account garnisheed. To do this, you need his bank-account information. You can probably get this off the back of one of your canceled checks paid to the landlord after he deposited it. Take that bank-account information to the same court that awarded you the judgment and ask for a "non-earnings" garnishment. Once the court provides this document to you, give it to a process server, who can serve the document on the landlord's bank. The bank should start garnisheeing the account immediately.

by Dave Cherry The Arizona Republic Jun. 6, 2011 12:00 AM



You can attach landlord's account

You can attach landlord's account

Question: I won a judgment against a former landlord in small-claims court for failure to return my security deposit. How can I make sure he pays me?

- Martin Diggs

Phoenix

Answer: The landlord is now required by the court to return your deposit, but that doesn't mean he will. Your best option is to have the landlord's bank account garnisheed. To do this, you need his bank-account information. You can probably get this off the back of one of your canceled checks paid to the landlord after he deposited it. Take that bank-account information to the same court that awarded you the judgment and ask for a "non-earnings" garnishment. Once the court provides this document to you, give it to a process server, who can serve the document on the landlord's bank. The bank should start garnisheeing the account immediately.

by Dave Cherry The Arizona Republic Jun. 6, 2011 12:00 AM



You can attach landlord's account

You can attach landlord's account

Question: I won a judgment against a former landlord in small-claims court for failure to return my security deposit. How can I make sure he pays me?

- Martin Diggs

Phoenix

Answer: The landlord is now required by the court to return your deposit, but that doesn't mean he will. Your best option is to have the landlord's bank account garnisheed. To do this, you need his bank-account information. You can probably get this off the back of one of your canceled checks paid to the landlord after he deposited it. Take that bank-account information to the same court that awarded you the judgment and ask for a "non-earnings" garnishment. Once the court provides this document to you, give it to a process server, who can serve the document on the landlord's bank. The bank should start garnisheeing the account immediately.

by Dave Cherry The Arizona Republic Jun. 6, 2011 12:00 AM



You can attach landlord's account

Tax rules put burden on landlords

As if declining housing prices, tenant job instability and the occasional hailstorm weren't enough, landlords now have something new to worry about: increased federal tax-reporting rules.

Suppose you own a rental home and hire a plumber, painter or landscaping company to work on it. You might need to collect the Social Security number, Employer Identification Number or Taxpayer Identification Number for each contractor so you can issue them 1099-MISC forms early next year.

If you neglect this new obligation, you could face penalties and possibly disallowed deductions, tax experts say.


The new 1099-reporting rules for rental-property owners, which took effect Jan. 1, now apply when you pay $600 or more to any contractor in a calendar year. They also could include payments made to other types of entities, such as utilities for water or power service.

"The rental provisions specifically apply to individuals, who aren't used to collecting this type of information," said Mark Luscombe, principal federal tax analyst at CCH Inc. in suburban Chicago.

Barry C. Melancon, president and CEO of the American Institute of CPAs, said the new reporting requirements place paperwork burdens on many businesses, including mom-and-pop operations.

"It's not something you'd do in the normal course of business," said Melancon, who visited metro Phoenix last week. "The vast majority of people aren't aware of it."

The reporting requirements also could apply to people who own a vacation home and rent it out for just part of the year.

In addition, landlords would be required to issue 1099s in January - weeks before most people get serious about filing their own income-tax returns. If some neglected to mail the forms promptly, that could trigger a ripple effect of delays.

Although the new rules have been in effect barely a month, there are efforts to repeal some provisions, Melancon said.

Even President Barack Obama seemed to criticize them when, in his recent State of the Union address, he cited "a flaw . . . that has placed an unnecessary bookkeeping burden on small business."

Yet the president played a big role in turning that flaw into law.

The rental-property rules stem from the Small Business Jobs Act of 2010, which Obama signed.

Obama also backed the Patient Protection and Affordable Care Act, which requires businesses buying $600 or more in goods or services from other companies to supply 1099s to those entities and the IRS.

The Senate has been moving toward repealing some business-reporting rules but not the one geared to landlords.

"If there was serious support for repealing that one, I would assume it would have been taken up at the same time," Luscombe said.

At this stage, landlords probably should assume and act as if the rules will be around for a while, suggests Elizabeth Hale, a CPA at eeCPA PLC in Phoenix.

That means requesting Social Security, Taxpayer or Employer Identification numbers now, before you hire vendors for single jobs or ongoing work totaling $600 or more.

"Once you pay someone, it's harder to get that information," said Hale, who recently discussed the issue at a meeting of the Independent Rental Owners Council, a group of Arizona landlords.

The rules also raise identity-theft worries for vendors "because you're giving out your Social Security and Employer Identification numbers all over the place," Hale said.

Landlords who employ a property manager should find out if the company is collecting the required numbers and issuing 1099s for work done on their rental units.

Hale also cited another hassle looming for rental-property owners: the need to collect information and issue 1099s every time you buy an appliance, air-conditioning unit or other tangible goods worth $600 or more for a rental unit - part of the business-to-business law cited above. If not repealed, that requirement is set to take effect on purchases starting in January 2012.

There's currently an exemption for collecting information and issuing 1099s if you buy $600 or more worth of items from corporations. But starting in 2012, that exemption ends.

These and other tighter 1099-reporting rules aim to close the "tax gap" - the difference between what taxpayers truly owe and actually pay. The IRS believes many vendors have not been reporting their full income. But the rules come at a cost of increased hassles.

"They want you to have a 1099 now for everything," Hale said. "It's like Big Brother is at work."

by Russ Wiles The Arizona Republic Feb. 6, 2011 12:00 AM




Tax rules put burden on landlords

Tax rules put burden on landlords

As if declining housing prices, tenant job instability and the occasional hailstorm weren't enough, landlords now have something new to worry about: increased federal tax-reporting rules.

Suppose you own a rental home and hire a plumber, painter or landscaping company to work on it. You might need to collect the Social Security number, Employer Identification Number or Taxpayer Identification Number for each contractor so you can issue them 1099-MISC forms early next year.

If you neglect this new obligation, you could face penalties and possibly disallowed deductions, tax experts say.


The new 1099-reporting rules for rental-property owners, which took effect Jan. 1, now apply when you pay $600 or more to any contractor in a calendar year. They also could include payments made to other types of entities, such as utilities for water or power service.

"The rental provisions specifically apply to individuals, who aren't used to collecting this type of information," said Mark Luscombe, principal federal tax analyst at CCH Inc. in suburban Chicago.

Barry C. Melancon, president and CEO of the American Institute of CPAs, said the new reporting requirements place paperwork burdens on many businesses, including mom-and-pop operations.

"It's not something you'd do in the normal course of business," said Melancon, who visited metro Phoenix last week. "The vast majority of people aren't aware of it."

The reporting requirements also could apply to people who own a vacation home and rent it out for just part of the year.

In addition, landlords would be required to issue 1099s in January - weeks before most people get serious about filing their own income-tax returns. If some neglected to mail the forms promptly, that could trigger a ripple effect of delays.

Although the new rules have been in effect barely a month, there are efforts to repeal some provisions, Melancon said.

Even President Barack Obama seemed to criticize them when, in his recent State of the Union address, he cited "a flaw . . . that has placed an unnecessary bookkeeping burden on small business."

Yet the president played a big role in turning that flaw into law.

The rental-property rules stem from the Small Business Jobs Act of 2010, which Obama signed.

Obama also backed the Patient Protection and Affordable Care Act, which requires businesses buying $600 or more in goods or services from other companies to supply 1099s to those entities and the IRS.

The Senate has been moving toward repealing some business-reporting rules but not the one geared to landlords.

"If there was serious support for repealing that one, I would assume it would have been taken up at the same time," Luscombe said.

At this stage, landlords probably should assume and act as if the rules will be around for a while, suggests Elizabeth Hale, a CPA at eeCPA PLC in Phoenix.

That means requesting Social Security, Taxpayer or Employer Identification numbers now, before you hire vendors for single jobs or ongoing work totaling $600 or more.

"Once you pay someone, it's harder to get that information," said Hale, who recently discussed the issue at a meeting of the Independent Rental Owners Council, a group of Arizona landlords.

The rules also raise identity-theft worries for vendors "because you're giving out your Social Security and Employer Identification numbers all over the place," Hale said.

Landlords who employ a property manager should find out if the company is collecting the required numbers and issuing 1099s for work done on their rental units.

Hale also cited another hassle looming for rental-property owners: the need to collect information and issue 1099s every time you buy an appliance, air-conditioning unit or other tangible goods worth $600 or more for a rental unit - part of the business-to-business law cited above. If not repealed, that requirement is set to take effect on purchases starting in January 2012.

There's currently an exemption for collecting information and issuing 1099s if you buy $600 or more worth of items from corporations. But starting in 2012, that exemption ends.

These and other tighter 1099-reporting rules aim to close the "tax gap" - the difference between what taxpayers truly owe and actually pay. The IRS believes many vendors have not been reporting their full income. But the rules come at a cost of increased hassles.

"They want you to have a 1099 now for everything," Hale said. "It's like Big Brother is at work."

by Russ Wiles The Arizona Republic Feb. 6, 2011 12:00 AM




Tax rules put burden on landlords

Tax rules put burden on landlords

As if declining housing prices, tenant job instability and the occasional hailstorm weren't enough, landlords now have something new to worry about: increased federal tax-reporting rules.

Suppose you own a rental home and hire a plumber, painter or landscaping company to work on it. You might need to collect the Social Security number, Employer Identification Number or Taxpayer Identification Number for each contractor so you can issue them 1099-MISC forms early next year.

If you neglect this new obligation, you could face penalties and possibly disallowed deductions, tax experts say.


The new 1099-reporting rules for rental-property owners, which took effect Jan. 1, now apply when you pay $600 or more to any contractor in a calendar year. They also could include payments made to other types of entities, such as utilities for water or power service.

"The rental provisions specifically apply to individuals, who aren't used to collecting this type of information," said Mark Luscombe, principal federal tax analyst at CCH Inc. in suburban Chicago.

Barry C. Melancon, president and CEO of the American Institute of CPAs, said the new reporting requirements place paperwork burdens on many businesses, including mom-and-pop operations.

"It's not something you'd do in the normal course of business," said Melancon, who visited metro Phoenix last week. "The vast majority of people aren't aware of it."

The reporting requirements also could apply to people who own a vacation home and rent it out for just part of the year.

In addition, landlords would be required to issue 1099s in January - weeks before most people get serious about filing their own income-tax returns. If some neglected to mail the forms promptly, that could trigger a ripple effect of delays.

Although the new rules have been in effect barely a month, there are efforts to repeal some provisions, Melancon said.

Even President Barack Obama seemed to criticize them when, in his recent State of the Union address, he cited "a flaw . . . that has placed an unnecessary bookkeeping burden on small business."

Yet the president played a big role in turning that flaw into law.

The rental-property rules stem from the Small Business Jobs Act of 2010, which Obama signed.

Obama also backed the Patient Protection and Affordable Care Act, which requires businesses buying $600 or more in goods or services from other companies to supply 1099s to those entities and the IRS.

The Senate has been moving toward repealing some business-reporting rules but not the one geared to landlords.

"If there was serious support for repealing that one, I would assume it would have been taken up at the same time," Luscombe said.

At this stage, landlords probably should assume and act as if the rules will be around for a while, suggests Elizabeth Hale, a CPA at eeCPA PLC in Phoenix.

That means requesting Social Security, Taxpayer or Employer Identification numbers now, before you hire vendors for single jobs or ongoing work totaling $600 or more.

"Once you pay someone, it's harder to get that information," said Hale, who recently discussed the issue at a meeting of the Independent Rental Owners Council, a group of Arizona landlords.

The rules also raise identity-theft worries for vendors "because you're giving out your Social Security and Employer Identification numbers all over the place," Hale said.

Landlords who employ a property manager should find out if the company is collecting the required numbers and issuing 1099s for work done on their rental units.

Hale also cited another hassle looming for rental-property owners: the need to collect information and issue 1099s every time you buy an appliance, air-conditioning unit or other tangible goods worth $600 or more for a rental unit - part of the business-to-business law cited above. If not repealed, that requirement is set to take effect on purchases starting in January 2012.

There's currently an exemption for collecting information and issuing 1099s if you buy $600 or more worth of items from corporations. But starting in 2012, that exemption ends.

These and other tighter 1099-reporting rules aim to close the "tax gap" - the difference between what taxpayers truly owe and actually pay. The IRS believes many vendors have not been reporting their full income. But the rules come at a cost of increased hassles.

"They want you to have a 1099 now for everything," Hale said. "It's like Big Brother is at work."

by Russ Wiles The Arizona Republic Feb. 6, 2011 12:00 AM




Tax rules put burden on landlords

Tax rules put burden on landlords

As if declining housing prices, tenant job instability and the occasional hailstorm weren't enough, landlords now have something new to worry about: increased federal tax-reporting rules.

Suppose you own a rental home and hire a plumber, painter or landscaping company to work on it. You might need to collect the Social Security number, Employer Identification Number or Taxpayer Identification Number for each contractor so you can issue them 1099-MISC forms early next year.

If you neglect this new obligation, you could face penalties and possibly disallowed deductions, tax experts say.


The new 1099-reporting rules for rental-property owners, which took effect Jan. 1, now apply when you pay $600 or more to any contractor in a calendar year. They also could include payments made to other types of entities, such as utilities for water or power service.

"The rental provisions specifically apply to individuals, who aren't used to collecting this type of information," said Mark Luscombe, principal federal tax analyst at CCH Inc. in suburban Chicago.

Barry C. Melancon, president and CEO of the American Institute of CPAs, said the new reporting requirements place paperwork burdens on many businesses, including mom-and-pop operations.

"It's not something you'd do in the normal course of business," said Melancon, who visited metro Phoenix last week. "The vast majority of people aren't aware of it."

The reporting requirements also could apply to people who own a vacation home and rent it out for just part of the year.

In addition, landlords would be required to issue 1099s in January - weeks before most people get serious about filing their own income-tax returns. If some neglected to mail the forms promptly, that could trigger a ripple effect of delays.

Although the new rules have been in effect barely a month, there are efforts to repeal some provisions, Melancon said.

Even President Barack Obama seemed to criticize them when, in his recent State of the Union address, he cited "a flaw . . . that has placed an unnecessary bookkeeping burden on small business."

Yet the president played a big role in turning that flaw into law.

The rental-property rules stem from the Small Business Jobs Act of 2010, which Obama signed.

Obama also backed the Patient Protection and Affordable Care Act, which requires businesses buying $600 or more in goods or services from other companies to supply 1099s to those entities and the IRS.

The Senate has been moving toward repealing some business-reporting rules but not the one geared to landlords.

"If there was serious support for repealing that one, I would assume it would have been taken up at the same time," Luscombe said.

At this stage, landlords probably should assume and act as if the rules will be around for a while, suggests Elizabeth Hale, a CPA at eeCPA PLC in Phoenix.

That means requesting Social Security, Taxpayer or Employer Identification numbers now, before you hire vendors for single jobs or ongoing work totaling $600 or more.

"Once you pay someone, it's harder to get that information," said Hale, who recently discussed the issue at a meeting of the Independent Rental Owners Council, a group of Arizona landlords.

The rules also raise identity-theft worries for vendors "because you're giving out your Social Security and Employer Identification numbers all over the place," Hale said.

Landlords who employ a property manager should find out if the company is collecting the required numbers and issuing 1099s for work done on their rental units.

Hale also cited another hassle looming for rental-property owners: the need to collect information and issue 1099s every time you buy an appliance, air-conditioning unit or other tangible goods worth $600 or more for a rental unit - part of the business-to-business law cited above. If not repealed, that requirement is set to take effect on purchases starting in January 2012.

There's currently an exemption for collecting information and issuing 1099s if you buy $600 or more worth of items from corporations. But starting in 2012, that exemption ends.

These and other tighter 1099-reporting rules aim to close the "tax gap" - the difference between what taxpayers truly owe and actually pay. The IRS believes many vendors have not been reporting their full income. But the rules come at a cost of increased hassles.

"They want you to have a 1099 now for everything," Hale said. "It's like Big Brother is at work."

by Russ Wiles The Arizona Republic Feb. 6, 2011 12:00 AM




Tax rules put burden on landlords

Tax rules put burden on landlords

As if declining housing prices, tenant job instability and the occasional hailstorm weren't enough, landlords now have something new to worry about: increased federal tax-reporting rules.

Suppose you own a rental home and hire a plumber, painter or landscaping company to work on it. You might need to collect the Social Security number, Employer Identification Number or Taxpayer Identification Number for each contractor so you can issue them 1099-MISC forms early next year.

If you neglect this new obligation, you could face penalties and possibly disallowed deductions, tax experts say.


The new 1099-reporting rules for rental-property owners, which took effect Jan. 1, now apply when you pay $600 or more to any contractor in a calendar year. They also could include payments made to other types of entities, such as utilities for water or power service.

"The rental provisions specifically apply to individuals, who aren't used to collecting this type of information," said Mark Luscombe, principal federal tax analyst at CCH Inc. in suburban Chicago.

Barry C. Melancon, president and CEO of the American Institute of CPAs, said the new reporting requirements place paperwork burdens on many businesses, including mom-and-pop operations.

"It's not something you'd do in the normal course of business," said Melancon, who visited metro Phoenix last week. "The vast majority of people aren't aware of it."

The reporting requirements also could apply to people who own a vacation home and rent it out for just part of the year.

In addition, landlords would be required to issue 1099s in January - weeks before most people get serious about filing their own income-tax returns. If some neglected to mail the forms promptly, that could trigger a ripple effect of delays.

Although the new rules have been in effect barely a month, there are efforts to repeal some provisions, Melancon said.

Even President Barack Obama seemed to criticize them when, in his recent State of the Union address, he cited "a flaw . . . that has placed an unnecessary bookkeeping burden on small business."

Yet the president played a big role in turning that flaw into law.

The rental-property rules stem from the Small Business Jobs Act of 2010, which Obama signed.

Obama also backed the Patient Protection and Affordable Care Act, which requires businesses buying $600 or more in goods or services from other companies to supply 1099s to those entities and the IRS.

The Senate has been moving toward repealing some business-reporting rules but not the one geared to landlords.

"If there was serious support for repealing that one, I would assume it would have been taken up at the same time," Luscombe said.

At this stage, landlords probably should assume and act as if the rules will be around for a while, suggests Elizabeth Hale, a CPA at eeCPA PLC in Phoenix.

That means requesting Social Security, Taxpayer or Employer Identification numbers now, before you hire vendors for single jobs or ongoing work totaling $600 or more.

"Once you pay someone, it's harder to get that information," said Hale, who recently discussed the issue at a meeting of the Independent Rental Owners Council, a group of Arizona landlords.

The rules also raise identity-theft worries for vendors "because you're giving out your Social Security and Employer Identification numbers all over the place," Hale said.

Landlords who employ a property manager should find out if the company is collecting the required numbers and issuing 1099s for work done on their rental units.

Hale also cited another hassle looming for rental-property owners: the need to collect information and issue 1099s every time you buy an appliance, air-conditioning unit or other tangible goods worth $600 or more for a rental unit - part of the business-to-business law cited above. If not repealed, that requirement is set to take effect on purchases starting in January 2012.

There's currently an exemption for collecting information and issuing 1099s if you buy $600 or more worth of items from corporations. But starting in 2012, that exemption ends.

These and other tighter 1099-reporting rules aim to close the "tax gap" - the difference between what taxpayers truly owe and actually pay. The IRS believes many vendors have not been reporting their full income. But the rules come at a cost of increased hassles.

"They want you to have a 1099 now for everything," Hale said. "It's like Big Brother is at work."

by Russ Wiles The Arizona Republic Feb. 6, 2011 12:00 AM




Tax rules put burden on landlords

Tax rules put burden on landlords

As if declining housing prices, tenant job instability and the occasional hailstorm weren't enough, landlords now have something new to worry about: increased federal tax-reporting rules.

Suppose you own a rental home and hire a plumber, painter or landscaping company to work on it. You might need to collect the Social Security number, Employer Identification Number or Taxpayer Identification Number for each contractor so you can issue them 1099-MISC forms early next year.

If you neglect this new obligation, you could face penalties and possibly disallowed deductions, tax experts say.


The new 1099-reporting rules for rental-property owners, which took effect Jan. 1, now apply when you pay $600 or more to any contractor in a calendar year. They also could include payments made to other types of entities, such as utilities for water or power service.

"The rental provisions specifically apply to individuals, who aren't used to collecting this type of information," said Mark Luscombe, principal federal tax analyst at CCH Inc. in suburban Chicago.

Barry C. Melancon, president and CEO of the American Institute of CPAs, said the new reporting requirements place paperwork burdens on many businesses, including mom-and-pop operations.

"It's not something you'd do in the normal course of business," said Melancon, who visited metro Phoenix last week. "The vast majority of people aren't aware of it."

The reporting requirements also could apply to people who own a vacation home and rent it out for just part of the year.

In addition, landlords would be required to issue 1099s in January - weeks before most people get serious about filing their own income-tax returns. If some neglected to mail the forms promptly, that could trigger a ripple effect of delays.

Although the new rules have been in effect barely a month, there are efforts to repeal some provisions, Melancon said.

Even President Barack Obama seemed to criticize them when, in his recent State of the Union address, he cited "a flaw . . . that has placed an unnecessary bookkeeping burden on small business."

Yet the president played a big role in turning that flaw into law.

The rental-property rules stem from the Small Business Jobs Act of 2010, which Obama signed.

Obama also backed the Patient Protection and Affordable Care Act, which requires businesses buying $600 or more in goods or services from other companies to supply 1099s to those entities and the IRS.

The Senate has been moving toward repealing some business-reporting rules but not the one geared to landlords.

"If there was serious support for repealing that one, I would assume it would have been taken up at the same time," Luscombe said.

At this stage, landlords probably should assume and act as if the rules will be around for a while, suggests Elizabeth Hale, a CPA at eeCPA PLC in Phoenix.

That means requesting Social Security, Taxpayer or Employer Identification numbers now, before you hire vendors for single jobs or ongoing work totaling $600 or more.

"Once you pay someone, it's harder to get that information," said Hale, who recently discussed the issue at a meeting of the Independent Rental Owners Council, a group of Arizona landlords.

The rules also raise identity-theft worries for vendors "because you're giving out your Social Security and Employer Identification numbers all over the place," Hale said.

Landlords who employ a property manager should find out if the company is collecting the required numbers and issuing 1099s for work done on their rental units.

Hale also cited another hassle looming for rental-property owners: the need to collect information and issue 1099s every time you buy an appliance, air-conditioning unit or other tangible goods worth $600 or more for a rental unit - part of the business-to-business law cited above. If not repealed, that requirement is set to take effect on purchases starting in January 2012.

There's currently an exemption for collecting information and issuing 1099s if you buy $600 or more worth of items from corporations. But starting in 2012, that exemption ends.

These and other tighter 1099-reporting rules aim to close the "tax gap" - the difference between what taxpayers truly owe and actually pay. The IRS believes many vendors have not been reporting their full income. But the rules come at a cost of increased hassles.

"They want you to have a 1099 now for everything," Hale said. "It's like Big Brother is at work."

by Russ Wiles The Arizona Republic Feb. 6, 2011 12:00 AM




Tax rules put burden on landlords

Tax rules put burden on landlords

As if declining housing prices, tenant job instability and the occasional hailstorm weren't enough, landlords now have something new to worry about: increased federal tax-reporting rules.

Suppose you own a rental home and hire a plumber, painter or landscaping company to work on it. You might need to collect the Social Security number, Employer Identification Number or Taxpayer Identification Number for each contractor so you can issue them 1099-MISC forms early next year.

If you neglect this new obligation, you could face penalties and possibly disallowed deductions, tax experts say.


The new 1099-reporting rules for rental-property owners, which took effect Jan. 1, now apply when you pay $600 or more to any contractor in a calendar year. They also could include payments made to other types of entities, such as utilities for water or power service.

"The rental provisions specifically apply to individuals, who aren't used to collecting this type of information," said Mark Luscombe, principal federal tax analyst at CCH Inc. in suburban Chicago.

Barry C. Melancon, president and CEO of the American Institute of CPAs, said the new reporting requirements place paperwork burdens on many businesses, including mom-and-pop operations.

"It's not something you'd do in the normal course of business," said Melancon, who visited metro Phoenix last week. "The vast majority of people aren't aware of it."

The reporting requirements also could apply to people who own a vacation home and rent it out for just part of the year.

In addition, landlords would be required to issue 1099s in January - weeks before most people get serious about filing their own income-tax returns. If some neglected to mail the forms promptly, that could trigger a ripple effect of delays.

Although the new rules have been in effect barely a month, there are efforts to repeal some provisions, Melancon said.

Even President Barack Obama seemed to criticize them when, in his recent State of the Union address, he cited "a flaw . . . that has placed an unnecessary bookkeeping burden on small business."

Yet the president played a big role in turning that flaw into law.

The rental-property rules stem from the Small Business Jobs Act of 2010, which Obama signed.

Obama also backed the Patient Protection and Affordable Care Act, which requires businesses buying $600 or more in goods or services from other companies to supply 1099s to those entities and the IRS.

The Senate has been moving toward repealing some business-reporting rules but not the one geared to landlords.

"If there was serious support for repealing that one, I would assume it would have been taken up at the same time," Luscombe said.

At this stage, landlords probably should assume and act as if the rules will be around for a while, suggests Elizabeth Hale, a CPA at eeCPA PLC in Phoenix.

That means requesting Social Security, Taxpayer or Employer Identification numbers now, before you hire vendors for single jobs or ongoing work totaling $600 or more.

"Once you pay someone, it's harder to get that information," said Hale, who recently discussed the issue at a meeting of the Independent Rental Owners Council, a group of Arizona landlords.

The rules also raise identity-theft worries for vendors "because you're giving out your Social Security and Employer Identification numbers all over the place," Hale said.

Landlords who employ a property manager should find out if the company is collecting the required numbers and issuing 1099s for work done on their rental units.

Hale also cited another hassle looming for rental-property owners: the need to collect information and issue 1099s every time you buy an appliance, air-conditioning unit or other tangible goods worth $600 or more for a rental unit - part of the business-to-business law cited above. If not repealed, that requirement is set to take effect on purchases starting in January 2012.

There's currently an exemption for collecting information and issuing 1099s if you buy $600 or more worth of items from corporations. But starting in 2012, that exemption ends.

These and other tighter 1099-reporting rules aim to close the "tax gap" - the difference between what taxpayers truly owe and actually pay. The IRS believes many vendors have not been reporting their full income. But the rules come at a cost of increased hassles.

"They want you to have a 1099 now for everything," Hale said. "It's like Big Brother is at work."

by Russ Wiles The Arizona Republic Feb. 6, 2011 12:00 AM




Tax rules put burden on landlords

Phoenix-area brokers report an increase in leasing activity for 2010

While sales of office, industrial and retail properties remained anemic in 2010, brokers reported an explosion of leasing activity as businesses made a mad rush to lock in long-term lease rates at market-bottom prices.

In all, Phoenix-area businesses in 2010 signed new leases on a net 5.9 million square feet of office space, said Craig Henig, senior managing director of commercial-real-estate firm CB Richard Ellis in Phoenix.

All that movement rivals the amount of activity during the local real-estate market's peak years of 2005 and 2006, Henig said, but it didn't cause a significant gain in leased space overall.

The total pickup of about 234,000 square feet made 2010 a turning point after two years of net decreases, he said, but it also shows that the vast majority of activity came from local moves that did not involve any expansion.

By year's end, the office-vacancy rate reached a recent high of almost 28 percent, said Bryon Carney, president and managing partner of Cassidy Turley BRE Commercial in Phoenix.

Henig's estimate was slightly lower at 26.2 percent, but both noted an increase from the end of 2009, when the vacancy rate was less than 25 percent.

The high year-end vacancy rate likely means a long spell without construction activity as the market works to absorb the available space, Carney said.

Relative winners in the office market in 2010 were downtown Phoenix, the Camelback Corridor, Scottsdale and Tempe. Suburban office properties on the edges of the Valley continued to struggle.

Henig said market watchers should expect to see sales of commercial properties increase in 2011 and 2012, as more lenders and loan servicers make the choice to place repossessed or struggling properties on the market.

About 95 percent of the commercial-real-estate sales in 2010 were short sale- or foreclosure-driven, he said, a trend that's expected to continue for at least two more years.

"I also think we're going to see more high-profile projects come to market," Henig said, adding that the listing of big commercial properties is likely to be a steady stream and not a flood.

"I don't think we're going to see an RTC-like purging of properties all at once."

Industrial strength

The industrial sector of the real-estate market had by far the biggest gain in occupied space in 2010, with businesses taking occupancy of an additional 3 million square feet, Carney said.

He said large corporate users of industrial space will continue to drive the market in 2011 and account for the majority of new jobs.

Economic-development groups and real-estate firms will continue their push to attract companies seeking a cost-effective gateway to the West Coast, local analysts said. And local companies are taking advantage of lower costs to purchase or lease new, larger properties.

Vacancy rates, which had been above 15 percent during the first quarter of 2010, were down to about 14 percent at year's end and are expected to be closer to 13 percent by the end of 2011, Carney said.

"Landlords should start to see relief as tenant activity continues to pick up," he said.

Retail hits bottom?

The retail sector probably had it the worst in 2010, while the multifamily-housing sector attracted the greatest number of property sales, the analysts and brokers said.

Several grocery-store closings and other retail failures drove down lease prices and led to increased vacancies.

"We believe 2010 was the bottom for (retail) rental rates," Carney said.

However, there were a few bright spots, too.

One recent deal involving retail property involved the site of the former Hard Rock Café and adjacent properties at 26th Street and Camelback Road, which sold in late December for $10.5 million to Alliance Residential Co.

Retail openings and expansions included national grocery chain WinCo, which has announced plans to open five Phoenix-area locations, and Colorado-based grocer Good Foods, which plans to open three or four Valley stores.

Quick service, casual-dining chains also have been expanding in the Phoenix area, including hamburger chains Five Guys, SmashBurger and Habit Burger, Carney said.

Apartment-sales transaction volume in 2010 was three times what it had been in 2009, as investors eager to put their money to work competed for a limited pool of available properties, said Chris Jantz, vice president of research at Cassidy Turley BRE Commercial.

The brokers said they expected apartment vacancy rates to continue dropping throughout 2011 as single-family-home foreclosures continue and relatively few new homes are built.

Renters should see apartment lease rates stay relatively flat, Jantz said, although rental communities are likely to offer fewer concessions such as periods of free or discounted rent.

That's especially true in the stronger submarkets, which include north Scottsdale, Fountain Hills and Ahwatukee Foothills, he said.

by J. Craig Anderson The Arizona Republic Jan. 7, 2011 12:00 AM




Phoenix-area brokers report an increase in leasing activity for 2010

Phoenix-area brokers report an increase in leasing activity for 2010

While sales of office, industrial and retail properties remained anemic in 2010, brokers reported an explosion of leasing activity as businesses made a mad rush to lock in long-term lease rates at market-bottom prices.

In all, Phoenix-area businesses in 2010 signed new leases on a net 5.9 million square feet of office space, said Craig Henig, senior managing director of commercial-real-estate firm CB Richard Ellis in Phoenix.

All that movement rivals the amount of activity during the local real-estate market's peak years of 2005 and 2006, Henig said, but it didn't cause a significant gain in leased space overall.

The total pickup of about 234,000 square feet made 2010 a turning point after two years of net decreases, he said, but it also shows that the vast majority of activity came from local moves that did not involve any expansion.

By year's end, the office-vacancy rate reached a recent high of almost 28 percent, said Bryon Carney, president and managing partner of Cassidy Turley BRE Commercial in Phoenix.

Henig's estimate was slightly lower at 26.2 percent, but both noted an increase from the end of 2009, when the vacancy rate was less than 25 percent.

The high year-end vacancy rate likely means a long spell without construction activity as the market works to absorb the available space, Carney said.

Relative winners in the office market in 2010 were downtown Phoenix, the Camelback Corridor, Scottsdale and Tempe. Suburban office properties on the edges of the Valley continued to struggle.

Henig said market watchers should expect to see sales of commercial properties increase in 2011 and 2012, as more lenders and loan servicers make the choice to place repossessed or struggling properties on the market.

About 95 percent of the commercial-real-estate sales in 2010 were short sale- or foreclosure-driven, he said, a trend that's expected to continue for at least two more years.

"I also think we're going to see more high-profile projects come to market," Henig said, adding that the listing of big commercial properties is likely to be a steady stream and not a flood.

"I don't think we're going to see an RTC-like purging of properties all at once."

Industrial strength

The industrial sector of the real-estate market had by far the biggest gain in occupied space in 2010, with businesses taking occupancy of an additional 3 million square feet, Carney said.

He said large corporate users of industrial space will continue to drive the market in 2011 and account for the majority of new jobs.

Economic-development groups and real-estate firms will continue their push to attract companies seeking a cost-effective gateway to the West Coast, local analysts said. And local companies are taking advantage of lower costs to purchase or lease new, larger properties.

Vacancy rates, which had been above 15 percent during the first quarter of 2010, were down to about 14 percent at year's end and are expected to be closer to 13 percent by the end of 2011, Carney said.

"Landlords should start to see relief as tenant activity continues to pick up," he said.

Retail hits bottom?

The retail sector probably had it the worst in 2010, while the multifamily-housing sector attracted the greatest number of property sales, the analysts and brokers said.

Several grocery-store closings and other retail failures drove down lease prices and led to increased vacancies.

"We believe 2010 was the bottom for (retail) rental rates," Carney said.

However, there were a few bright spots, too.

One recent deal involving retail property involved the site of the former Hard Rock Café and adjacent properties at 26th Street and Camelback Road, which sold in late December for $10.5 million to Alliance Residential Co.

Retail openings and expansions included national grocery chain WinCo, which has announced plans to open five Phoenix-area locations, and Colorado-based grocer Good Foods, which plans to open three or four Valley stores.

Quick service, casual-dining chains also have been expanding in the Phoenix area, including hamburger chains Five Guys, SmashBurger and Habit Burger, Carney said.

Apartment-sales transaction volume in 2010 was three times what it had been in 2009, as investors eager to put their money to work competed for a limited pool of available properties, said Chris Jantz, vice president of research at Cassidy Turley BRE Commercial.

The brokers said they expected apartment vacancy rates to continue dropping throughout 2011 as single-family-home foreclosures continue and relatively few new homes are built.

Renters should see apartment lease rates stay relatively flat, Jantz said, although rental communities are likely to offer fewer concessions such as periods of free or discounted rent.

That's especially true in the stronger submarkets, which include north Scottsdale, Fountain Hills and Ahwatukee Foothills, he said.

by J. Craig Anderson The Arizona Republic Jan. 7, 2011 12:00 AM




Phoenix-area brokers report an increase in leasing activity for 2010