So while I was looking into the different niches of realestate, I considered property management to generate income instead of my day job. What I found out here in Kentucky is that I essentially needed to be a broker first which meant being a realator before that.
My question is, is the MHP business considered a different type of business so that our managers don’t need to be licensed or is this a Pandora’s box question?
Thank you
You do not need to be licensed to operate your own property. You do need to be licensed to operate for hire to property owners.
That’s what I mean by the question, the manager is managing something they don’t own.
Where we are that is not the case Jim but the employers needs workmen comp on employes
Every state is different. In NC, my managers are not required to be brokers. They can show property and execute a lease. They may not, however, negotiate a lease if they are not brokers.
Ty
So… right. Things can be more complex. For instance, in Texas even if you won the property you must be ‘mobile home broker’ to show and sell homes.As an owner, in all of the states I deal in, as the owner of the park I can employ a manager. If that person gets a w-2 they are my employee. If they get a 1099 the rules change. In many states as a independent contractor you need some sort of licence to manage property. I know there are several companies that manage properties for owners, an many of them are located in Michigan. They manage properties in other states though. I know, because I once many moons ago when I had a real estate brokers licence, there was preciosity between many states. Each state has different requirements. Carl though gave a real key- if you pay workers comp they are your employee… if you do not cover them, they are independent and ‘other rules’ apply.
Thank you very much for your experience and knowledge.
Dealing with employee paperwork will be unfamiliar territory
There may be some confusion about whether a manager (or other worker) is an employee or an independent contractor based upon whether you issue a W-2 or pay worker’s comp. The determination is based upon a combination of facts and circumstances and it will be the IRS that will make the controlling decision. The link to some of the criteria is:http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-EmployeeThere are major adverse consequences for treating a worker as an independent contractor when he is determined to be an employee such as liability for employee injury in addition to any penalty that the IRS imposes. Be VERY careful in this area.Howard
Yes sir, in this business, I see this being my weakest area of understanding.
Louvie, I use intuit payroll and they handle everything for me. All federal and state taxes and form filing. I own property in three different states and just click the buttons every month.
The independent contractor debate has been going on for ages. I personally pay the extra money for taxes and WC. This way I rest easy.
Thanks for the feedback, I appreciate you taking time to share your experience.Ken