As a landlord, you either have rented (or will eventually) rent out a single living space to more than one individual. This is usually not problematic. But — and no matter how seasoned a landlord you are — you still need to be aware at all times about how to define the individuals who are your clients. Their relationship to you could make all the legal difference in the world, especially if the tenancy doesn’t work out.

Tenant

This refers to a person who has signed a lease or a rental agreement for occupancy of a particular unit. Since he or she has a direct relationship with you as landlord, that person can hold you accountable for all promises stated in the lease or rental agreement. At the same time, you can hold that person responsible for the contents of that same contract.

Co-tenant

A co-tenant refers to two or more tenants who rent the same property under the same lease or rental agreement. Each is 100% responsible for carrying out the agreement, including paying the rent in full. Co-tenancy can also occur after you rent out a property and whenever you add someone else to another person’s lease or rental agreement.

Subtenant

A sub-tenant is someone who rents directly from the tenant and not from you as landlord. In effect, the tenant becomes the subtenant’s landlord. The subtenant may take over for a portion of the lease term — for the summer, for example, with the tenant returning in September — or may live there at the same time as the tenant. Sub-­tenants have an indirect relationship with you as the main landlord. They therefore cannot enforce many of the lease or rental agreement terms.

Roommates

This refers to two or more people living under the same roof and sharing rent and utility expenses. Roommates are usually — but not always — co-tenants. For example, a roommate may instead be a subtenant of the original tenant. Unless you have accepted the presence of the roommate, either by making the person a co-tenant or explicitly or allowing the subtenancy, a roommate has the legal status of a long-term guest, with few if any legal protections.

The reason you need to remember these definitions is that tenancy can get complicated, especially if you are not around to check on the status of a rental living situation. For example, someone who signed a contract as a single tenant may allow a friend or family member to move in…and not tell you. If there are problems between the new roommates that involve damage to the actual rental property, you could be in for some legal wrangling and more headaches than you expected.

At Herman Boswell, we understand that landlording can be difficult, especially if you also happen to work and/or have family obligations. That’s why we’re to help. Our real estate professionals can offer you the management expertise that can give you the peace of mind you deserve. Simplify your life: contact us today!

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Legally, you can use the information you receive through a background check in your rental decisions.  But beware: you must follow state and federal laws very carefully when you (1) obtain a background check and (2) notify a tenant of a housing request denial.

Get permission to do a background check in writing

When you do run a background check, federal law requires you to get a prospective tenant’s written permission.  Smart landlords typically will include this request in their housing applications so they get everything they need at once.

Determine your rental criteria and apply them fairly

You are free to set your own business standards for using tenant background checks in application decisions.  However, it’s in your best interest to ensure that you and any employees you may have are consistent in how you apply these standards to avoid charges of discrimination.

Understand the dos and don’ts of adverse actions

Federal law also requires that you notify a tenant in writing if information from a background check results in an “adverse action” against the tenant.  An adverse action can take the form of:

• an outright denial of the housing application
• requiring the prospective tenant to pay extra security deposit
• having him/her get a co-signer

If you do take an adverse action against your applicant, you must inform the person of the name and contact information of the credit bureau or tenant screening agency, as well as information on how the tenant can get a free copy of this report.

Watch out for criminal background exceptions

While it’s legal for you to deny a prospective renter housing because of a criminal background, a significant exception does exist to this rule.  You can refuse an applicant who has conviction for drug sales or manufacture, but federal disability laws protect recovering drug users.  Bottom line: you cannot use a conviction or simple possession or use of drugs to deny someone housing.

Keeping so many important details straight is one of the most daunting tasks busy landlords face.  But Herman Boswell can help.  Our real estate experts make it their business to stay abreast of all the rules and regulations that affect property management. For the peace of mind you deserve, contact us today!

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When you’re a landlord, not only do you have to worry about the usual headaches like leaky pipes and broken appliances, you’ve also got to steer clear of legal mistakes that could get you into a lot of hot water.

Be careful what you ask

The federal Fair Housing Act prohibits a landlord from refusing to rent for reasons pertaining to race, color, religion, national origin, sex or gender, disability, and familial status.  You should therefore avoid asking questions that may appear discriminatory or suggest an intent to discriminate.

Make proper health and safety disclosures

You need to tell prospective tenants whether certain conditions or situations apply to your rental property.  These typically include:

• notice of mold, when you know or have a reason to believe it exists
• notice of sex offenders that live in the area, if you have knowledge of this
• disclosure of recent deaths that occurred in the rental unit
• disclosure of lead-based paint if the property was built before 1978

You also need to take basic safety measures, such as providing locks and adequate lighting.

Repair as necessary

Every state imposes an “implied warranty of habitability” on all rental units.  That means that even if your rental agreement does not specify who is responsible for certain repairs, you must still make sure that the rental property itself is fit to live in.  Failure to make major repairs, especially when a tenant requests them, can result in a lawsuit.

Respect tenant privacy

You should never enter a tenant’s rental unit without first giving a 24-hour written or verbal notice, and this only when showing the unit to a prospective tenant, making a repair or inspecting the property.  The only exception to this is when an emergency occurs.

Being a landlord is tough, especially if it’s not your primary job.  But Herman Boswell can help.  Our real estate management experts have the skills and knowledge to protect your investment and offer you the peace of mind you deserve.  Don’t hesitate: contact us today!

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The house money in human hands

PRICING YOUR RENTAL FOR MAXIMUM PROFIT

Getting the best price for a rental property may seem easy to do.  But the minute you begin looking more closely, it becomes clear that there’s more to rental pricing than meets the eye.

First impressions matter

When renters evaluate a rental property, they are not only looking at things like appearance, size and features, they are also sizing up the person doing the showing.  So the more professional and reliable you come across, the more prospective tenants will be willing to pay for your rental.

Do the homework

Before you actually start talking to tenants, you’ll need to know exactly how much you can, and should, ask for your unit.  To do this, you’ll need to look at the rental rates of comparable properties in and around the area where your property is located.  That way, if a prospective tenant should question the price, then you’ll have a basis from which to push back.

Stay aware of trends and laws

Make it your business to stay on top of trends in both the rental and real estate industry.  This means reading studies and reports for the facts and figures you need to help you make sure that you are not only pricing your property well, but also marketing it correctly.  You’ll also need to school yourself on the more technical parts of renting, including state and federal laws governing such things as liability and tax/investment issues.

Don’t cut corners

The best way to get top dollar for your property is to look over as many qualified prospective tenants as possible.  If landlording is not your main job, then you will have to set aside blocks of time in the evenings and on weekends.  You’ll also need to make sure that you review and screen candidate information, especially as it pertains to credit and finances, very carefully before finalizing any agreement.

Sound like a lot of work?  It is.  That’s where the experts at Herman Boswell come in.  Our property management professionals are here to help you get the most for your rental property.  For the financial peace of mind you deserve, contact us today!

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If you haven’t raised your rent in the last few years, consider this: according to the Bureau of Labor and Statistics, the rent index is currently rising at an annualized rate of 3.6%.  So you’re probably overdue for an increase.

At the same time, you may worry that by increasing your rates, you’ll lose good tenants.  It doesn’t have to happen that way, especially if you follow these simple guidelines.

Do your homework

Assess the current rental market in your area and the value of your specific tenants.  Some key questions to ask are:

• When was the last time you raised rents?
• How do your current rates compare to those of similar properties?
• What is the demand for rental units and what are the current vacancy rates?
• Should you increase rates only on in-demand units (for example, one bedroom vs. studio)?
• Which of your tenants are the most valuable and would you consider excluding these individuals from the increase to ensure you keep them?

Be prepared

Once you’ve determined how much to raise rent and on which units, be ready to address negative feedback with justifications for your action.  Legitimate reasons include:

• increased property taxes and fees
• higher utility costs
• increases in janitorial, repair and maintenance costs
• improvement projects designed to enhance tenant living spaces

Be sure to note the length of time since the last increase, especially if you haven’t raised rents for an extended period.

Communicate clearly

Announce the increase in a typed notice on letterhead in concise language.  Consider making explicit some of the main reasons you are raising rent to address complaints before they occur.  Be sure that you adhere to the specified advance notice requirements in your leases and that you make yourself available to tenants should they wish to discuss the increase with you in person.

Raising rent isn’t fun.  But it can be made easier if you have the help of a company like Herman Boswell.  Our professionals are experts in both real estate and tenant management and can see to all the details that go into raising rent the right way.  For the peace of mind you deserve, contact us today!

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Raising rent is not easy to do. In fact, it can be almost as difficult as asking for a raise from your boss. But strategies do exist that can help you move beyond the angst.

The first thing you need to know is that you do not need to explain why you are raising the rent to your tenants. Your one legal responsibility is to inform renters in writing A) that an increase is coming and B) how much that increase will be.

That said, following are two simple but highly effective ways you can adjust tenant rent so as to lessen the psychological impact it will have on both you and your tenants.

Strategy 1: Make small increases at the time of lease renewal automatic

Most tenants expect a slight rent increase at renewal, usually in the amount of $20 to $50. But if you suddenly add $200 or more after not having raised the rent for a long period of time, you’ll very likely receive some negative feedback. A good rule of thumb is to increase rent between 3% and 5% a year.

You might consider making an exception to this if you have a good tenant you’d like to see stay on. In that case, you might waive the rent increase if they renew for another year. You can always make up the difference by raising the rent when that person finally moves out.

Strategy 2: Send an increase notice 60 days before lease end

Sending a rent increase letter this far in advance lets you know what the tenant’s intentions are. If he or she doesn’t plan to renew the lease, you have time to start marketing and showing the place without having a vacancy period.

You’ll need to state what the new rent will be and the date it becomes effective, which would be the day after the lease ends. If you have a fixed-term lease, you could include or attach a new lease with your letter or email. If you have a month-to-month lease, the tenant won’t need to sign a renewal since it automatically renews every month.

Herman Boswell understands that successful landlording not only requires substantial infusions of time and energy, but also good business and interpersonal savvy. That’s why our real estate professionals are ready to share their expertise with you when you need it.

\You have a life to live and investments to protect: let Herman Boswell help you on the road to better property management today!

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If you’re a Texas landlord who rents out property that’s part of a home owner association, it’s wise to familiarize yourself with the state laws that affect Home Owners Associations.  It’s yet another task on the never-ending landlord do-list.  But knowledge is power, especially when it comes to keeping your real estate investments safe.

Following are summaries of the top 3 Texas Home Owners Association laws that you need to know about.  They are the newest ones on Texas law books and took effect between September 1, 2011 and January 1, 2012.

Law #1: Regarding Home Owners Association records

Covenants, conditions and restrictions (CC&Rs) – the Home Owners Association governing documents that dictate how the homeowners association operates and what rules the owners (as well as their tenants and guests) must obey – must be recorded in the real estate records of the county where your property is located.  So should any amendments to them.

The same holds true for articles of formation, bylaws, design guidelines and any rules or policies affecting you as a homeowner.  A Home Owners Association must also post these documents online.

If an HOA does not adhere to these guidelines, then those rules, bylaws etc. are unenforceable.

Law #2: Regarding Home Owners Association board meetings

All Texas Home Owners Associations must give notice to home owners of in-person board meetings.  With certain exceptions for executive sessions, they must open these meetings to homeowners.

What this means for you as a landlord is that if you have not received notice about a meeting that concerns such issues that directly concern you (for example, fines and home assessment increases), boards cannot consider/decide upon those issues.

Law #3: Regarding annual owners’ meetings

Texas Home Owners Association boards must hold annual owners’ meetings.  If they do not, then you as a property owner have the right to call one.

If the board still will not hold a meeting following such a demand, then you and other home owners may form a committee to elect board members.

At Herman Boswell, we know that landlords can get squeezed between responsibilities to tenants as well as other entities like home owner associations.  This is where we can help.  Our team of real estate professionals can monitor each area of your life as a landlord so you don’t have to.  For property management expertise you can count on, contact us!

The post TOP 3 HOME OWNERS ASSOCIATION LAWS TEXAS LANDLORDS SHOULD KNOW ABOUT appeared first on Herman Boswell Property Management.

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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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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