Being an income property owner is a huge commitment, but, if handled properly, that huge commitment can bring equally large financial rewards.

Income from Renters

The biggest benefit of owning a rental property is that the renters will provide you with a direct income stream. Those monthly rent checks go straight into your business account, ideally more than offsetting any expenses for the month.

For example, if you own a house that you rent out for $1,000 per month, that house when fully occupied will put $12,000 per year back into your accounts.

It’s hard to argue with a direct income stream like that. It is worth nothing, though, that those kinds of figures are optimistic ones and you shouldn’t just dive in expecting those results. Still, even partial results can be very good. If you can keep the property rented for just 75% of the year, that’s still $9,000 a year in income, after all.

Sweat Equity

The other factor that you should consider is that your sweat equity is likely to add additional value to the property as you maintain and upgrade it. Doing things like repainting the home, adding new siding, refinishing the inside, doing some basic landscaping to the yard, and so on will add value to the home without significant financial cost.

Not only will this allow you to charge more for rent, it will also increase the value of the property itself should you choose to sell it in the future.

If you enjoy home improvement projects, this should be a major attraction for buying a rental property. You’ll have the opportunity to fix it up upon acquisition as well as in between tenants, which will return very nice dividends for you.

5. Huge Tax Write-Offs for Income Property

As a rental property owner, you are entitled to huge tax deductions. You can write-off interest on your mortgage or on any credit cards used to make purchases for the property. You can write-off your insurance, maintenance repairs, travel expenses, any legal and professional fees, and even your property taxes. You can see a more extensive list at Nolo.com

On top of all of these deductions, the government also allows you to depreciate the purchase price of your property based on a set depreciation schedule, even if your property is actually appreciating in value.

Using our above example, you receive $3,480 in rental income for the year ($290 each month * 12 months). If you made this money at a regular job or in the stock market, you would lose a significant portion of it to pay income taxes. However, by owning a rental property, you can offset the $3,480 income with the depreciation expense for your property, thus being able to reduce or completely eliminate the amount of taxes you have to pay on this rental income.

Speak to an accountant to determine all of your specific tax write-offs.

Being an income property owner is a huge commitment, but, if handled properly, that huge commitment can bring equally large financial rewards.

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Death and taxes are two of life’s certainties. But as a landlord, you face one more certainty other people don’t — extreme time deficit. Property management is something that can consume every minute of every hour of your day…literally.

A landlord always has to ensure the safety of an occupied rental property. That it follows all housing codes and is in good repair. And when emergencies, like flooding or gas leaks, arise, a landlord has to respond immediately—even if the problem happens in the middle of night.

Then there’s the small matter of rent. Tenants need to pay on time but sometimes they don’t. As a landlord, it’s your responsibility to not only collect money owed but to stay on top of situations — such as failure to pay rent — that could lead to eviction and/or other legal action. And no matter how difficult the circumstances, you still need to handle these matters without sacrificing your professionalism.

And that’s just for the people who already live on your property.

If you need to find tenants, you have to go through the process of advertising the property online and with brick-and-mortar real estate agencies.  Then you interview potential tenants and do background checks. And even then, you’re not always guaranteed that a new renter will work out to your satisfaction. The person could end up breaking a lease for reasons beyond his or her control, such as a divorce or new job in another city, which leaves you needing to look for a new tenant and scrounging for time to do it.

Herman Boswell can help. Our property management experts work hard to maintain an open line of communication with tenants. Landlords always have the information they need to take the appropriate action. And when it comes time to find new renters, we not only provide you with detailed market analyses of rental property in your area. We also advertise your property through all channels, carefully screen all potential tenants and provide clear leasing guidelines.

We have been proud to serve North Texans for more than 30 years. Our current portfolio includes almost 900 clients and a track record that boasts low rates of eviction and of vacancy.

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Ink pen with agreement between landlord and tenant

Right of Entry in the State of Texas

Texas has no statute that governs when landlords can enter occupied rental units. So theoretically, that means you could enter residences any time you wish. But if you’re concerned about maintaining good relationships with your tenants, that’s not a good idea.

The smart way to go is to take into account what statutes in other states guarantee renters. What this ultimately means is that you offer your tenants reasonable privacy rights against intrusions.

In practice, you should try to give at least 24 hours’ notice before entering a rented apartment to make (or assess for) repairs or show the unit to prospective new tenants. The more time you are able to give your current renters, the better. You might also consider entering only at specified times, such as normal business hours during the workweek.

In the event of an emergency, such as a fire, burst water pipe, or gas leak, you have the right to enter without notice. You may also enter the premises if a tenant has moved out without notifying you or if you have a court order to do so. Under no circumstances should you enter just to “check up” on your tenant – that is a true invasion of privacy.

On occasion, a tenant will refuse you access. If a tenant does this repeatedly, then you can assert your right to enter, provided you do so in a peaceful manner. If the tenant still bars access and you suspect something is seriously amiss, you may need to take legal action.

Even though Texas has no set legal guidelines regarding right of entry, you may want to establish your own and put them in writing. That way, you protect your interests as well as those of your tenants.

Nobody said being a landlord was easy. And it doesn’t help that Texas law is sometimes unclear about the extent of your rights with respect to your tenants. The experts at Herman Boswell can help by creating a tenant management plan that you – and your renters – can live with. Contact us today!

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When you collect rent, money goes to pay business-related expenses such as insurance, taxes and the mortgage. It also gets used for other bills, such as those that come from advertising, property maintenance, utilities, water and garbage. And if you have a bookkeeper or handyman, you need to pay them as well.

But what happens when your rentals aren’t bringing in enough to pay for everything and cash gets tight?

The first thing to do is go over your monthly bills carefully, paying special attention to what’s going on with heat, electricity and water bills.  Maybe you have a tenant who needs to open a window because the temperature is too high in his or her unit.  If you control the thermostat, you might want to ask your renters whether they are getting too much heat.

If your tenants control in-home thermostats, ask them if you can run a check. Explain the situation to them. Perhaps you can get your renters to regulate their controllers more carefully.  If it turns out that that defective thermostats are what are causing the problem, you may need to make a few replacements.

You might also consider putting in some weather stripping along windows and doors. If your rental home, condominium or apartment complex was built before 1970, the building itself may not have proper insulation.  You may want to look into this, but be sure to do the math so that you know how long it will take you to get a return on your investment.

If it’s the water bills that are out of control, then you’ll probably want to do an inspection of all the faucets, toilets and water heaters for leaks.  A slow drip from any indoor or outdoor water-bearing device can add up to quite a few extra gallons that you have to pay for at the end of the month.

No matter how tight things get, you should never tap into money saved for taxes nor should you even think about using the security deposits your tenants gave you when they moved in. Some states like Texas are less stringent about this than others, but as a matter of ethics, it’s to your benefit to keep that money separate.

At Herman Boswell, we believe that the one of the keys to successful landlording is good cashflow management.  Our experts pride themselves on staying on top of the financial issues that matter most to our clients.  When you need an experienced, top-notch team real estate management team to safeguard your investments, contact us!

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Making the decision to hire a property management company is not easy but it’s often necessary for property owners inundated with the responsibilities that come with owning multiple properties. Knowing what to expect is the first step in having a great working relationship with your real estate property management team. Keep these dos and don’ts in mind when you hire a property manager.

Property Management Dos

Do: Keep communication open. For an owner, being able to effectively communicate with your property management team is critical to ensuring that your tenants’ needs are met and your reputation as an owner stays intact. When your property manager contacts you with tenant concerns like repairs, objectively consider the solutions that are offered. Even if you disagree with the property manager’s suggestions, by effectively communicating, you’ll set the tone that you are approachable and easy to work with. For property managers, communication is one of the most desirable qualities, as you’ll be communicating with both owners and tenants, as well as maintenance staff and contractors. Keeping the lines of communication open will help things run smoothly.

Do: Read the fine print. Whenever you work with a property management company, you will be given what’s called a Property Management Agreement. This important document outlines everything that is expected of the property manager, as well as what’s expected of the owner. Always carefully read over the Property Management Agreement and make sure you ask questions about anything that you don’t understand.

Do: Get to know your property manager. In the search for a property manager to help you run the day-to-day operations of your properties, it can be tempting to go with the first property manager you come across. However, for a successful long-term working relationship, it’s better to interview candidates until you find one who is a good fit. Once you choose the ideal property manager or management company, spend some time getting to know the person or people who will make your life as a property owner easier.

Property Management Don’ts

Don’t: Take a hands-off approach. As an owner, it can be tempting to let the property management company handle everything without any input from you. That’s not the best way to approach a property management partnership. Avoiding communication with your property management team is a recipe for disaster and good follow-up is essential to keep your properties running efficiently.

Don’t: Shy away from automation. Though property management certainly involves a lot of communication and human interaction, that doesn’t mean automation should be overlooked. From collecting rent payments to logging and resolving maintenance requests, some level of automation is essential for efficient property management. If your property management team suggests automation software or processes, be open-

minded and take the time to understand how technology and automation can work of you.

Don’t: Hire on the Fly. All rental management companies are not created equal, so take your time when deciding who to work with. Do your research by reading client testimonials, getting feedback from current or former clients (if possible), and asking the property management company to demonstrate how they get results for owners. If you have questions about any part of working with a property manager, be sure to ask upfront. Putting off questions or concerns until later can be disastrous.

Herman Boswell Property Management – Experienced Residential Property Managers 

By following these simples dos and don’ts, you can take the stress out of hiring a quality property management company. If you’re searching for a property manager in the greater Dallas area, Herman Boswell Property Management has a professional team of reliable property management associates who work with you to ensure you have happy tenants and profitable properties.

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Owning commercial or residential property is not easy and property management is a busy role that involves dealing with a variety of individuals and tasks on a daily basis. A skilled and fully-staffed property management team is essential to maximizing profits and keeping tenants happy, but individuals can quickly become overwhelmed when keeping up with maintenance requests, tenant issues, collecting payments, and other tasks.  

Finding out how automation can assist in helping pare down some of these day-to-day tasks is essential, not only for property management staff but also for owners who are looking to expand operations.  

Property management automation tools allow business to be streamlined and help immensely with time management. Though it is not possible, or even desirable, to eliminate the human component of property management, there are some ways to effectively manage the more repetitive and tedious property management tasks.  

Automation not only saves time and money — it also minimizes the risk that comes with juggling too many things at once.  

Appointment Setting 

Property management professionals are tasked with showing properties – sometimes several times a day – to prospective tenants or buyers. From scheduling conference calls to conducting tours, it may seem like the property management team’s work is never done.  

Automated scheduling is one of many ways to address the problem of keeping up with appointments and walkthroughs.  Utilizing email software that makes scheduling easy is recommended. Implementing time-saving tools like chat bots on your website or online, self-served meeting schedule software allows prospects to pick a time that works best for them without having to deal with a seemingly endless game of phone tag to make an appointment.  

Make Touring Easier with Automation 

Showing a property is essential for attracting tenants and buyers but it can be extremely time consuming for property managers, especially since a showing does not always result in a sale.  

Technology has come a long way and it is now possible to enlist the help of technology to make the touring process practically effortless. Popover showing technology tools include Bluetooth enabled keys and lock boxes that allow property managers to communicate with prospect beforehand and provide them the necessary tools to access the property at their convenience. Prospects can easily check-in at the appointed time, provide feedback to the owner, and complete surveys at the end of the tour to rate the property and their overall showing experience.  

Other Popular Uses for Automation Tools 

There are a few more automation tools that are essential for a time-conscious property management professional. Here are more ways to make property management duties simpler:  

• Collecting rent and deposits: Automating rent payments not only frees up property management staff so they can focus on logistics and marketing, it also makes life easier for tenants who also have busy lives. 
• Maintenance requests: Automated maintenance request system allow tents to seek help for non-emergency and urgent maintenance needs without the stress of calling after hours.  
• Bookkeeping: Automating bookkeeping entries will help owners and property managers immensely when it is time to verify financials or file taxes.  
• Create a paperless environment: Property ownership and property management traditionally involved the use of forms and other documentation that can quickly pile up. Shifting toward automation will keep many tasks online, eliminating the need for piles of paper.  

Take Property Management into the 21st Century 

Automation can seem scary to property management professionals and owners, but it doesn’t have to be. Doing everyday tasks more efficiently will improve your bottom line and reduce the stress of property management duties.  

For a tech-savvy team of property management professionals in the metropolitan Arlington, Texas, community, look no further than Herman Boswell Property Management. With more than 30 years of experience, the pros at Herman Boswell Property Management work hard to deliver the best property management experience for both tenants and owners.  

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There’s been some pessimism lately concerning the future of the North Texas housing market. Here are some facts to put the market’s health in perspective.

In November, home sales in North Texas fell eight percent, the biggest year-over-year decline in over seven years. The average time it takes to sell a house through the MLS (multiple listing service provided by real estate agents) is up ten percent from last year, and total property purchases through the MLS are down one percent for the first eleven months of 2018. That’s the first downturn in local home sales since the Great Recession.

The downturn earned Dallas a place on Realtor.com’s list of ten cities supposedly hit the hardest by a housing slowdown. The site reported these year-over-year changes between October 2017 to October 2018 for Dallas:

• Median list price $335,050
• Change in list price -1.4%
• Change in inventory +15.5%
• Listings with price reductions +14.0%

A Wall Street Journal article from November 26^th stated, “Yet even with the booming growth, Dallas’s once vibrant housing market is sputtering. In the high-end subdivisions in the suburb of Frisco, builders are cutting prices on new homes by up to $150,000”. The article also mentioned how prices have grown “out of whack with historic norms”, and that home prices have risen faster than wages, resulting in buyers who can’t keep up.

These circumstances led Zillow to classify the Dallas-Fort Worth-Arlington market as “cool”.

There are other factors contributing to the slowdown. According to the Dallas News, “Higher mortgage rates have added as much as fifteen percent to the payments on a home purchase during the last twelve months”. Add this to the fact that median house costs have increased more than forty percent over the last five years, and you have homeowners and buyers having to adjust their budgets and expectations for future purchases.

It’s Not All Gloomy

However, it’s not all doom and gloom. In fact, experts say the underlying fundamentals of the housing market in the Dallas-Fort Worth area are sound. In their opinion, the local home market is merely returning to a normal, stable condition, after overheating in 2012. The demand for housing is still there, with the region’s job market and population continuing to increase at a rapid rate. Another good sign is there’s still only a three month supply of pre-owned homes on the market, which is half of what is considered a normal inventory, and half the long-term average for North Texas.

As of early December, pre-owned home sales were nearly tied with the total this time last year, a record high year for sales. And despite the fact home purchase forecasts for the Dallas-Fort Worth area are predicting a drop of nearly one percent for 2019, it would be the second best year ever for home sales in North Texas.

Furthermore, Zillow is predicting that Dallas will be one of the U.S. home markets likely to outperform the rest of the country in 2019 with regard to home value appreciation and housing market health. Zillow’s panel of economists said they expected the U.S. home value to grow an average of 3.8 percent in 2019, while a recent Realtor.com report stated the Dallas-Fort Worth home prices would grow 4.3 percent next year.

Although overall sales have slowed down, luxury property sales in North Texas are setting records. According to the Texas Association of Realtors, luxury home sales in the Dallas-Fort Worth-Arlington area were up 10.3 percent for the twelve month period ending in October. As well, this area had more million dollar home sales than any other Texas major metro area.

Forbes recently reported that the best cities in Texas to own rental property as an investment included Fort Worth, Garland, and Arlington. The article stated many home seekers are deciding to rent instead of buy, and, “as a result, rental rates are surging”. This is good news for landlords and those looking to buy investment rental property in those areas.

Overall, there’s still every reason for optimism regarding the North Texas housing market.

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The namesake of accomplished real estate broker Herman Boswell, Herman Boswell Property Management began in Arlington, Texas and has since expanded to serve various Texas communities. The company was founded in 1984 to provide the highest quality residential property management services and serve the needs of real estate professionals in the region.

Herman Boswell Property Management does it all. Aside from traditional property management services, the company also specializes in resort property management, real estate management, and investment property management. We also work to keep property management costs down while looking for ways to increase the profitability of the properties we manage.

Taking Care of All Your Property Management Needs

One of Texas’ premier rental property management companies, Dallas-based Herman Boswell Property Management offers a full range of professional property management services for owners in the Greater Dallas area. Our dedicated property management team works hard to provide owners with quality services that maximize efficiency and increase productivity, ensuring that eviction rates stay low and vacancies are filled quickly with quality tenants.

Herman Boswell Property Management maintains an A+ Better Business Bureau rating and has successfully managed over 900 properties in the Dallas area. Client satisfaction remains our number one priority and we not only offer comprehensive property management, but our website is also a wealth of information for those who have questions or concerns about property management. The Herman Boswell Property Management website answers frequently asked questions (FAQs) about our property management services with DIY help topics. Topics include what is property management, how to choose a rental management company, what does a property manager do, the elements of a sound property management agreement, what is the role of a professional property manager. By answering the most commonly asked questions, Herman Boswell ensures all of our questions are answered, guaranteeing the total property management solution.

We Handle It All

Herman Boswell Property Management is your go-to source for all of your property management and real estate needs. We handle everything from advertising your property to conducting routine inspections as well as deposit and rent collector services. We also provide comprehensive applicant screening, ensuring that only the highest-quality applicants are approved during the rental process. We take the guesswork out of rental management by handling all paperwork including lease contracts, renewals, as well as lease addendums. In the event that eviction needs to be filed, Herman Boswell Property Management gives you peace of mind by taking care of the process from start to finish.

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Simultaneously, the alternative work arrangements and classes going online pushed a spike in relocation rates. It is important to consider the real estate market situation in whatever area you’re considering investing in. The battle against the deadly virus is also far from over. As a real estate investor, you must be well-equipped with accurate data concerning the global pandemic’s impact.

Before we kick off a whole new year, here are the effects of the previous year and expectations for 2021:

Long-term Impact of 2020 on Real Estate Demand

When calculating how the last year would affect the real estate demand in 2021, we need first to look into the supply inventory. Acquiring months’ supply of inventory data can provide a clear picture of the current market conditions. Knowing the volume of transactions, fluctuation of prices, and mortgage interests allow you to come up with an estimate on when properties can sell.

Every six months serves as a scale with a moderate price appreciation, which is normal and balanced if the prices increase by 2% to 3%. Texas has not reached a balanced market since 2008. In the past year, Austin reached 2.1 months of inventory. Lower months’ supply of inventory indicates a higher demand and a spike in property pricing.

Texas property prices are at an all-time high, with the median listing price at $359,739. In comparison, the average pricing all over the US starts at $345,500. While there is a slight difference with the average prices, experts find it a practical reason for people to look for other options. As a result, a growing number of Texans expect to lean towards property rentals instead.

Thus, higher occupancy rates for rental units will make sense for the Texas real estate market in 2021.

How Does This Affect You?

The market expects tremendous competition in scoring affordable properties for people considering relocating to Texas or acquiring a starter home. Make sure that you begin your search as early as today to find the right home for you. With Herman Boswell Property Management’s help, you can gain better insight and assess a plethora of options suitable for your budget and needs. You can access property listings around Texas, which includes both new construction and up-and-coming developments.

The Future of Mortgage Interest Rates

While assessing the mortgage interest rates over the last years, it is typical for a 30-year fixed-rate mortgage to cover 1.75% of the 10-year U.S. Treasury bond. As you know, a year of US Treasury bonds amounts to 0.7%. The addition of 1.75% to the 10-year Treasury results in a 2.45% mortgage interest rate. This inflation accounts for the mortgage interest rates of today.

Granted that we enter an economic recession when the crisis continues, the federal law mandates industries to decrease the rates to 2.5%. This opportunity aims to provide homeowners the ability to bounce back. Many experts anticipated this would happen in 2020, but mortgage forbearance risks can agitate the market.

Millennials and Gen Z: The New Generation of Buyers

Millennials and Gen Z’s are the frontiers of the preceding generations and play a fundamental role in the real estate market’s future. The oldest generation of millennials will turn 40 in 2021. They account for a considerable portion of trade-up buyers that have lived long enough to measure their equity gains. In contrast, younger millennials go forward to their “roaring 20s”. They are gradually building their properties and assets similar to older Gen Zs (24-year-olds) this year.

The recent data revealed that Millennials and Gen Z gamble with more significant debts to take advantage of low mortgage rates. Despite the soaring prices of 2020 property listings, they (38%) did not seem to hesitate to make down payments. In other words, they are lowering their mortgage budget, and their home search standards are never in question when looking for properties. Most of them are motivated to live in neighborhoods with expensive properties to guarantee safety and security. The remaining percentage of the people surveyed would prefer to lower their budget to earn more savings.

2021 Outlook for the Real Estate Market

The following factors imply that the downturn of the Texas real estate market is not likely happening this year:

1. Over the years, the population of Texas has continuously increased. Texas population growth was peaked between 2000 and 2018, reaching over 7.4 million residents and homeowners. The primary reason behind this increase is associated with economic growth in the state and vast opportunities. Although the 2020 pandemic has affected Texas’s migration rates, its actual impact will likely come to fruition in 2021.

1. Oil and technology are the cornerstones to the success of the Texas economy throughout the years. The past year prompted oil industries to decrease prices, which can potentially cause the economy’s downfall. However, Texas has been showing gradual recovery with its modest economic growth over the past months. Studies found that the unemployment rate decreased from 13.5% in April to 8.3% in September.
2. Although Texas is declared one of the top states to provide plenty of job opportunities in 2020, the job growth rate rates significantly slowed down. Compared to the 2019 data (2.3% growth), its job growth rate is down to 1.6%. This growth rate will likely continue in 2021 as one of the adverse effects of the pandemic.
3. According to the Market Recovery Index, a vast portion of Texas’ housing market surpassed the benchmark for recovery from the COVID-19 pandemic.

Your rental properties represent a significant investment.  Protect that investment with a property management firm you can depend on.  Contact Herman Boswell Property Management.

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