Tenancies run in cycles. A new tenant moves in to your rental apartment or home, stays for a period of time and then leaves. After that, you need to find a new tenant so you can keep up with proprietary bills. But what should you do between the time the old renter moves out and the new one moves in?

Take care of the small stuff

Tenants sometimes forget to have gas and electricity services turned off. So one of the first things you’ll need to do is contact the utility company to make sure everything is in order.

Evaluate the interior

No matter how careful a tenant has been, you’ll still need to make sure that the inside of the apartment receives at minimum a new paint job. You may also want to consider modernizing the kitchen and/or bathroom and adding up-to-date amenities like “smart” appliances or door locks. Remember: the more you invest in a rental, the more likely it is that you will attract higher quality tenants who can pay higher rent and will be more likely to stay for a longer period.

Don’t forget the exterior

Where applicable, don’t forget to also pay attention to the exterior of the property. What a potential tenant sees on the outside will leave a lasting impression, and you want that impression to be positive. Simple things like fresh exterior paint and or a few potted plants by the front door can do wonders for property image.

Replace the carpet or flooring

Once you’ve made all the necessary repairs on the inside and out, you may also want to think about replacing the carpet or flooring, especially if it shows signs of wear and tear. If you decide on hardwood floors, consider bamboo flooring instead. It’s cheaper and more eco-friendly and doesn’t scratch as easily as hardwood.

Herman Boswell has been in the North Texas property management business for more than 30 years. We have the know-how to help you keep up with the challenges of being a landlord. Let us show you a better way to manage your real estate investment properties: contact us today!

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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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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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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!

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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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