Family home in a north American suburb.

REMOTE LANDLORD PROPERTY MANAGEMENT

Do you own investment property in North Texas and live outside that area – or even in another state?  It’s a challenge for sure!  But sometimes that challenge can be overwhelming, even for the most organized individuals.

Following are four tips to help you succeed as a remote landlord.

1.  Automate as many of your services as possible

Some common problems that can cause friction between tenants and remote landlords are lost keys and lighting and/or watering systems that don’t turn on (or get shut off) at the proper time.

To avoid dealing with these hassles, you may consider investing in digital and/or automated systems.  For example, you could purchase a keyless entry service that allows for lock management from a smartphone.  And you could install automatic lights and/or sprinkler systems.

2.  Prepare a list of recommended services

Gathering a list of local services will ensure that your tenants have everything they need for almost any situation.  For example, you could provide information on all the local hospitals, police stations, and repair services.

You could also make a list for entertainment purposes, like parks, shopping areas, and restaurants.  Many tenants will appreciate this amenity, especially if they happen to be new to the area where your rental property is located.

3.  Hire a permanent cleaning/maintenance service

When a tenant vacates a property, you will need to make sure the premises are presentable for the next renter.  The best, most cost-effective way to handle this is to look for a service that is (1) on call and (2) offers a discount for long-term services.  Remember: one-time cleaning and maintenance services are much more expensive than hiring a person or company for the long term.

4.  Find a trustworthy property management team

Probably the single best thing you can do as a remote landlord is invest in the services of a property management company.  No matter where you call home, Herman Boswell can assist you with tenant placement/management, rent collection and maintenance.  Our experts are here to give you the freedom, flexibility and peace of mind you deserve: contact us today!

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Most tenants will maintain your rental property to a reasonable degree, follow the rules outlined in their lease and pay their rent on time each month.  Deadbeats, though, won’t.  When faced with uncooperative renters, eviction may be your best, and only, option.

Gather evidence

If your tenant is responsible for any property damage, take photos.  Also save paper copies of all written and electronic correspondence with your tenant regarding any other infractions, including noisiness and late and/or unpaid rent.

Go over the lease

Note any sections that the tenant has violated.  Be sure you are able to document your findings.

Send a notice of eviction

State the reasons for the eviction and what date the tenant must vacate the property.  Consult all local eviction laws, which vary from state to state.

File the eviction at your local courthouse

To make the eviction official, you’ll need to file the appropriate legal paperwork.  Your tenant will receive written notice that you have filed a case against him.

Take all evidence to court

The tenant might leave the property after you file the eviction notice.  But he or she may still take the case to court and argue against the eviction.  In that case, use your evidence to convince the judge that you have a renter who deserves to be evicted.

Dealing with tenants, even good ones, is hard work.  So having even one bad tenant could make your life hell.  But Herman Boswell can help.  Our experts know exactly how to handle difficult tenants in a way that will minimize damage to you and your property.  For the peace of mind you deserve, contact us today!

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CoreLogic, a California-based provider of real estate information and analytics, issued a report that home prices in the Fort Worth-Arlington area decreased in January from a year ago. While this might be seen as bad news, this figure includes the sales of distressed properties and only represents a 1.9 percent drop compared with January 2011. Without the distressed sales included, home prices in the area are actually increasing by 3 percent. Distressed sales include short sales and real-estate-owned transactions, or properties sold by lenders.

Nationally, the trend was lower. Home prices, including distressed sales, declined by 3.1 percent in January, the sixth consecutive monthly decline. However, when distressed sales are excluded, prices were seen to still be declining by 0.9 percent. So things are definitely better than the national average here in the Arlington area.

CoreLogic’s chief economist Mark Fleming, commenting on the report, said, “Although home price declines are slowly improving and not far from the bottom, home prices are down to nearly the same levels as 10 years ago.”

In another report, the company found that completed foreclosures were down across the nation in January. There were 69,000 completed foreclosures in January 2012 as compared to 80,000 in January 2011. Texas ranked fifth as the state with the largest number of completed foreclosures over the last year ending in January 2012 with some 57,000.

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LANDLORDING : THE HIDDEN COSTS

 

Real estate concept.

The learning curve for new landlords can be steep.  There’s learning how to deal with tenants, maintenance and legal issues and of course, all the paperwork that goes with renting properties.

But that’s only part of the story.  If you are a novice landlord, you will also have to be prepared to cope with other costs that you may not have considered.

Increased insurance and tax costs

Rental properties can be more expensive to insure than regular properties.  For example, the premium for a rental home can run as much as 25% more than typical homeowner’s insurance.  Rent may help to cover increased costs – so long as it is occupied.  There may be times when it is not, such as the period between tenancies.

Unless you live on your rental property, you’ll likely be subject to an increased tax burden.  At the same time however, some expenses associated with renting the property may generate tax breaks.  Consulting with tax professionals can help clarify the possibilities inherent in your particular situation.

Administrative charges and legal fees

Landlords have to pay for administrative costs related to actually getting new tenants. This can include those associated with interviewing, checking credit histories and also references.  Additionally, many cities require that owners register rental homes, make them available for examination and absorb all costs associated with both.

Should a tenant need to be evicted or in the event of some other legal dispute, you’ll need to be prepared to pay for the services of a lawyer.  And sometimes the fees can be quite hefty, up to $200 per hour or more.

Maintenance costs

A landlord often has to spend money on upgrades to rental properties to attract suitable tenants.  And even after people do move in, he or she will usually be under some kind of contractual obligation to fix maintenance issues as they arise.  A security deposit can usually help offset these expenses – unless the tenant completely trashes the property, which does unfortunately happen.

With so many hidden costs, how can a new landlord get in the game and win it?

The experts at Herman Boswell can help you not only manage your investment properties, but enhance profitability.  Our dedicated professionals are among the most trusted names in property management in North Dallas.  For the peace of mind and security you deserve, contact us today!

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Late fees are an important part of any property management business.  That’s why it’s important that you make it clear when rent due dates, grace periods and late fees are due in all rental agreements you draw up with your tenants.

Following are five strategies you can implement to ensure you receive the rent due on your investment properties in a timely manner:

1. Define payment terms

Every lease agreement should begin with clear rent payment terms.  Information should include the day rent is due each month, what the grace period is (this can range from 3 to 5 days) and when rent is considered late.

2. Determine late charges

The late charges you establish should be fair, reasonable and be in keeping with monthly rent and/or state regulations.  In general, the total amount you should charge should not be more than one quarter of the month’s rent.  They can be assessed as:

• a flat fee due immediately after the grace period ends
• a percentage of monthly rent (usually 4-6%) based on rent amount
• a daily late fee that accrues each day after the grace period

3. Contact tenants

If a renter misses a rent deadline, give him or her a reminder via email or the telephone. Mistakes happen, but sometimes one late payment may lead to more in the future.

4. Set precedents – and stick to them

As a landlord, you need to be consistent with your late fee policies.  Failing to communicate and impose fees could cause you problems later, especially if you have to evict a tenant.  Courts need evidence that you are abiding by rules in order for you to protect your legal rights as a landlord.

5. Amend rental agreements

If your current leases do not have clear rent payment terms, consider revising them as soon as possible.  Depending on the kind of agreements you have, you may not be able to do this until renewal time.  Contact a legal professional if you need help.

Collecting, and enforcing, rental policies are among the difficult tasks busy landlords face.  But Herman Boswell can help.  Our professionals have the skills and savvy that get results.  Let us show you an easier way to manage your investment properties: contact us today!

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Disabled tenants present special challenges.  You can’t treat them differently from able-bodied renters.  At the same time, though, you may need to make special accommodations for them.

The first thing to clarify is who is considered disabled.  The federal Fair Housing Act and Fair Housing Amendments state that a person is disabled if he or she has a physical or mental disability that limits one or more major life activities.  These may include:

• mobility, visual and/or hearing impairments
• mental illness or retardation
• chronic alcoholism (if it is being addressed in a recovery program)
• HIV or AIDS

As a landlord, you cannot make decisions about where a disabled individual will live on a property.  For example, if you are renting two units, one on the ground floor and one the second floor, you must show both units to a disabled applicant, even if you believe the ground floor unit would be best for the person.

After a disabled tenant moves in, and at your own expense, you may also need to adjust rules, regulations and/or services to give that individual an equal opportunity to use and enjoy a rental.  For example, if you provide parking, you may need to offer a disabled tenant in a wheelchair a space that is spacious and close to where the person lives.

A disabled tenant also has the right to make reasonable accommodations at his or her own expense.  Special faucets or door handles or a wheelchair ramp are some of the accommodations such an individual could ask for.  You have the right to approve these changes and ask for proof that they will address the disabled tenant’s needs.

Handling tenants, especially those with special needs, can be one of the hardest things you’ll ever have to do.  The Herman Boswell team of real estate experts can make that task a little easier for you.  We have the experience and the know-how you need to help you get the job done right.  For property management you can count on, contact us today!

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Are you a landlord struggling to manage multiple property holdings? If so, chances are that you’d benefit from handing over management of those homes, apartments and/or condos to a property management company. But before you seek this kind of assistance, you need to make sure you know who you’re dealing with.

Here’s a list of a few important things to look for in a property management firm:

• Make sure that any company you consider has the relevant credentials. In most states including Texas, a property management company must be licensed as a real estate broker if they are collecting rent, listing properties for rent or helping to negotiate leases.
• Ask the company for a few references and get feedback from past clients. Also try to speak with current clients and see what they have to say about the kind of service they are receiving from the company.
• Investigate the firm’s overall track record and consider the kinds of properties that firm has managed in the past.
• Look at how the company handles such issues as monthly reports, collections and finances. You should also get information on reply time: that is, how quickly the firm responds to problems or complaints.
• Check to see if the firm is a member of the local Chamber of Commerce and whether or not it has any other business affiliations. Professional memberships can give you an idea of the company’s status within the property management industry.

Your properties represent a significant financial investment: their management should only be entrusted to a property management firm with a proven track record of success. Herman Boswell Property Management is proud to offer service that consistently exceeds industry standards. We look after your real estate interests so that you can relax.

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Most real estate owners have had problems with taking care of their property at one point or another.

Handling one’s personal home is a difficult task that requires a substantial amount of time. That said, the responsibility, stress, and effort required for the task increases exponentially if a person becomes the owner of more than one property, and even more so if they have tenants. The solution to this complicated issue is to hire a property management company that employees property managers who know the law, have experience, and can deal with people in a civil manner.

Although hiring a property management company is a superb investment on the part of the real estate owner, thorough research must be done in searching for the correct company, given that these individuals will be managing what is quite probably your most valuable asset.

Here are some mistakes to avoid when choosing a property management company.

1. Hiring a company based solely on price.
A company may offer a price that seems favorable- that is until you experience their services. Make sure you look at what they are offering and see if it correlates with your demands. You might have to pay more money to some companies, but this addition will be worthwhile if they offer an abundance of services- you’ll be getting the best value rather than the best price.

2. Hiring an inexperienced company.
This issue comes up, once again, as a result of monetary considerations. If a property management company has not managed any properties, or very few properties, they are still undergoing a learning process, and one you will be paying for. An inexperienced manager could be too extreme with your tenants in two ways- either too tyrannical or too lenient. Both scenarios end with you losing money.

3. Hiring a property management company that is not certified.
Certification is a useful measure of the adequacy of a property manager. An independent, objective board decides on whether or not an individual has the qualifications to undertake this particular stream of employment. If a person doesn’t meet certification standards, they likely will not meet your standards either.

4. Hiring a property manager with too many obligations.
While it is detrimental to hire an individual who has no experience, it is equally negative to have a property manager who overextends their capabilities. It is important to have a balance in the two extremes. If your potential property manager takes care of a property where they are earning more money, having to do less work, or have personal connections with the property owners, there is a good chance that you will not be their top priority.

When evaluating a property management company, it is essential to have all of these criteria in mind. Nevertheless, a savvy real estate owner should not stop here. You should make your own additions to this list, including requirements that are specific to your own vision of what a property management company should offer you. Additionally, do not compromise on your expectations too much because it is likely that you will be working with this company for a substantial period of time.

If you own a rental property in any of the following areas:

• Arlington,
• Bedford,
• Benbrook,
• Burleson,
• Cedar Hill,
• Colleyville,
• Crowley,
• Duncanville,
• Euless,
• Fort Worth,
• Grand Prairie,
• Grapevine,
• Hurst,
• Lake Worth,
• Mansfield,
• Saginaw,
• Southlake,
• Watauga, or
• White Settlement,

then the property management company you can count on is Herman Boswell Property Management.

We advise you to definitely shop around but Herman Boswell Property Management has 37 years of property management experience to bring to bear on the needs of your particular property or properties. We oversee more than 700 properties. There is a reason why people trust us. Find out why.

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Depending on your level of familiarity, you might already be aware that real
estate investment is a great way to reap a residual income. If that alone
does not sell you on the value of investing in a rental property, perhaps the
appreciation and tax benefits will.

Passive Income

For starters, investing in real estate is touted as a great method for
generating a low-maintenance, passive income. You invest in the beginning,
but it is your eventual tenants that pay the mortgage, effectively growing
your equity long-term. Once the property is paid off, you will be able to
collect passive income. In essence, you are generating revenue from the
money you have already invested in the property.

There are many benefits of passive income from a rental property. Once
you have set it up, it should require little to no upkeep from you. Of course,
this will depend on the condition of the rental property when you initially
make your purchase, but after any needed updates are complete, the
ongoing maintenance should ideally be minimal.

Passive income is great for adding a bit of extra money to your retirement
fund and reaching your additional wealth-building goals with little to no
effort. With the right ingredients and dedication, you can eventually build
your wealth with ease.

Property Appreciation

There are various factors to consider that will influence property
appreciation. Appreciation is the growth in value that is generally a
byproduct of the community conditions and quality of the neighborhood
where your property is located.

Finding a good, solid property or area where real estate prices have
consistently risen in recent years is a strong indicator that the
neighborhood will continue to develop and maintain a high value.
Additionally, you can attract good tenants this way. Having an attractive
property that is close to major transportation or highways makes for a
great selling point to potential renters.

If it is your first time purchasing a rental property as an investment, you
could consider investing in something nearby so you can monitor the
condition of the place and efficiently handle anything that might come up.
Buying something lower cost and fixing it up can be good if you are looking
for a short-term turn-around, though you should try to avoid “money pits”
when it comes to rentals. Attractive and move-in-ready options are optimal
for keeping the initial investment smaller on the front end.

Collateral

Real estate is commonly an asset that is used as collateral. Before being
issued a loan, lenders want to see that you can repay it and keep up with
your financial obligations. In the event you establish a successful rental
property, you can build your collateral as evidence that you are a
responsible steward of the investment.

Collateral is an important consideration when investing in rental properties,
and one you should feel relatively sure of before investing. Having a healthy
amount to invest and put into the property at the onset is key to ensuring
you will maintain strong financial health and good collateral with your
prospective lenders.

Tax Advantages

One of the greatest advantages of owning rental property as an investment
is the availability of deductions for the investor. In fact, real estate is one of
the most tax-advantaged investments out there.

Tax write-offs that are available include costs associated with interest on
mortgages, operating expenses, depreciation, interest, repairs, and more.
Because many real estate investors choose to own their properties with an
entity (for example, a limited liability corporation), they are eligible for
deductions related to the operation of a business. This savvy tip allows
investors to avoid shouldering individual expenses and taking on
unnecessary costs.

Deducting depreciation, the property's total loss in value over its expected
lifetime is another way of lowering your tax burden. The natural loss in
value is a huge advantage for real estate investors, as it gives way to
greater deductions on expenses long term.

If you ultimately sell the property for more than you purchased it, you are
also eligible for capital gains taxes. These tend to have lower rates than
ordinary income taxes. As a real estate investor, you are also able to
leverage various tax-deferred methods on your real estate depending on
the transaction. One example would be swapping an investment property
for like-kind property, essentially avoiding any changes in cost or
depreciation.

Conclusion

When investing in rental property, it’s important to partner with individuals
who have extensive property ownership and management experience.
Contact Herman Boswell Property Management to discover all we have to
offer.

The post Why Rental Properties are a Great Investment appeared first on Herman Boswell Property Management.

Fixed-Rate

If you’re looking for something with some consistency while buying and
owning a home, a fixed-rate mortgage can offer just what you need. A
fixed-rate mortgage remains at the same interest rate for the entire life of
the loan. For example, whether you have 10 years or 30 years left on your
mortgage, the rate will always remain the same.

A fixed-rate mortgage can be ideal for those borrowers on a tight budget
because it will have the same monthly payment for the principle and
interest amount. However, once decided on a fixed-rate, the rate does not
change even if the standard financial indices that determined these rates
do. This means borrowers would not be able to benefit from reduced
interest rates if/when they decrease, but they will also not be impacted by
increased rates if/when the rates increase.

Adjustable-Rate

In contrast to a fixed-rate mortgage, an adjustable-rate mortgage’s interest
rate varies over the loan’s lifetime. Adjustable rates often go up or go down
based on a standard financial index, such as the Treasury bill yield or the
Federal Reserve. Typically, an index or range of the interest rates is
provided when selecting a mortgage, but these can vary with time because,
as the standard financial index shifts, the lender adjusts the interest rates.
An adjustable-rate mortgage can be advantageous if buyers are looking to
take advantage of a period of low-interest rates.

Some adjustable-rate mortgages feature combinations of fixed and
adjustable interest rates. For example, lenders may offer an adjustable
mortgage with an introductory fixed rate for five years, and then after that
initial five-year period expires, the interest rate will fluctuate annually or
several times a year after that.

Federal Housing Administration (FHA) Loan

The Federal Housing Administration (FHA) is umbrellaed by the United
States Department of Housing and Urban Development (HUD). Since 1934,
FHA insures a loan so that your private lender can offer lower down
payments, closing costs, and relaxed requirements for loan qualifications.
FHA resources and loans can offer assistance for renters and homeowners
to afford their payments. They also ensure fair lending to all races,
religions, sexes, and disabled persons. More information on eligibility can
be found here.

Veterans Affairs (VA) Loan

The Veterans Affairs (VA) Loan was created in 1944 by the United States
government to help veterans, service members, and their families purchase
a home with little to no down payment or exceptional credit after serving
their country.

There are two types of VA home loans: direct and VA-backed. In the former,
the VA acts as the mortgage lender, helping you apply for and manage your
loans. These rates are often better (i.e. lower, more competitive) than a
private bank or other lenders. For a VA-backed home loan, a portion of your
home loan is guaranteed by the VA; thus, making it easier for you to meet
private lenders’ qualifications for a home mortgage.

The VA home loans have also allowed veterans and service members to
put $0 down on a mortgage to purchase a home! The backing of the loan
by the VA also means that veterans and service members may have access
to more competitive interest rates, relaxed loan qualifications, and banks
do not require private mortgage insurance. It’s no wonder that the VA has
helped over 24 million American veterans and service members find a
home for their families! More information is available here.

Balloon Mortgage

A balloon mortgage is a type of loan that starts with low (interest only) or
no monthly payments; however, the full balance of the loan is due in
full—along with any interest—at the end of the loan period. It is called a
“balloon” mortgage because the full balance of the borrowed amount is not
due back until the end of the loan term, so the payments get very large at
the end of the loan lifetime.

Balloon mortgages can have fixed or variable/adjustable interest rates but
are more common in commercial real estate than in residential. However,
borrowers may prefer a balloon mortgage if they are only looking to own a
home for a short period. In this case, the homeowner will pay only interest
rates until they sell the home, then use the sale of the home to pay back
their remaining balance.

This type of mortgage can be risky, though. The homeowner must be able
to repay the loan at the end of the term or refinance it for at least the
amount of the balloon payment, pending approval from the lender. The
balloon mortgage also reduces the homeowner’s equity during
homeownership. Construction businesses may opt for balloon mortgages
because these mortgages allow for short-term financing without collateral.
Once the company has built the new property, it may refinance the balloon
mortgage at a lower rate by leveraging the new building as collateral.

Jumbo Loan

Just like homes, loans also come in all shapes and sizes. As the name
implies, jumbo loans are mortgages to finance more expensive homes than
a conventional conforming loan may cover. The Federal Housing Finance
Agency (FHFA) sets the ceiling of these conforming loans at $510,400 for
2020 (but can vary by state and county), so any mortgage for a home more

expensive is considered non-conforming, or jumbo. With more money,
comes more strict qualifications from your lender. For a jumbo loan,
borrowers should expect to have a higher credit score (700+), 20%+ down
payment, and little debt compared to their income to qualify for their non-
conforming loan.

United States Department of Agriculture (USDA) Loan

The United States Department of Agriculture (USDA) offers specialized
mortgages for low- to moderate-income homebuyers in rural areas. The
USDA offers these loans to those who do not make more than 15% of the
local median salary live in a locality with a population under 20,000. To
qualify, one must have a steady income, 640+ credit score, and a 41% or
less debt-to-income ratio. The USDA backs these loans from private
lenders, and this allows rural buyers to finance the entire purchase price of
the home ($0 down!) and get competitive fixed interest rates on their
mortgage. More information can be found here.

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