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How to Begin Investing in Real Estate

How to Begin Investing in Real Estate

Are you thinking about getting started in Real Estate investing in the Houston Texas area? If so, you’re not alone.

Many people have made the decision to invest in real estate over the last year thanks to historically low mortgage interest rates and demand for rental property across Houston and the United States.

In this article we will share with you several tips you can use for getting started in Real Estate investment.

How To Get Started Investing In Real Estate

Buying shares in a real estate investment trust. You can invest in a REIT, but doing so involves buying shares of a portfolio of properties. “It’s really more like buying a stock or buying into a fund,” Baron says. “It’s a completely different animal from owning real estate directly.”

“There are three layers of value – the real estate itself, the management and cash flow that supports the trust, and the fund based on the trust,” explains Gary Gastineau, founder of ETFConsultants.com, based in Bonita Springs, Florida. “It’s a very different vehicle than buying real estate, but most of us can’t just go out and buy 1 percent of a skyscraper.”
Adding a REIT to your portfolio can complement stock and bond funds, Gastineau says, but you must be sure you understand how the real estate fund is designed and how its managers will likely extract value from the holdings. You can buy shares of REITs and real estate-based funds, but the performance of the funds is based on both cash flow and gains from occasionally selling properties – a very different scenario from the typical performance drivers of stock and bond funds.

Direct ownership. This is anything but a passive investment, Baron says. “People think it’s easy money, that there’s not a lot of work, that tenants will pay on time and that pipes never leak,” he says.

Some individuals enter the market by buying a small apartment building, he explains. You should research diligently to find a good deal on a building that produces positive cash flow and has no hidden defects that will require expensive repairs. Don’t take investment guidance from a real estate agent, Baron warns. To them, everything is a good investment, because they only win a commission when you buy.

Don’t assume your personal experience as a homeowner translates to managing rentals, just on a bigger scale, he adds. From complying with fair housing rental regulations to insurance, to making sure the property complies with building codes and common-sense safety guidelines, property management dominates your wallet and your time. “It’s a very complicated asset. But because it’s a physical asset, people think it isn’t complicated,” Baron says. “People way underestimate the number of issues that come up.”

One way to test your tolerance for being a landlord is to buy a duplex or a small apartment building, with the aim of living in one unit and renting the others.

A nascent rebound seems to be buoyed by millennials who are edging into the market as owner-occupants. Thin on cash, 20-somethings are finding they can gain a toehold into homeownership by buying a small, multiunit property, such as a duplex or three-apartment building. Their plan is to live in one unit and rent out the others, says John Mosey, president and CEO of Northstar MLS, a Saint Paul, Minnesota-based data service for real estate brokers.

Although this arrangement can stretch down payment dollars, it also demands a Himalayan learning curve: first-time homeownership simultaneous with first-time landlord.

The most important consideration for potential first-time landlords is to not assume today’s rising rental rates will lift future cash flow, Mosey says. Today’s tight rental market will be eased as projects under construction enter the market. That means rents will level off, so it’s best to work cash flow and return numbers using conservative projections, Mosey says.

Key cash-flow factors include not only predictable costs, such as property taxes, but also variables that can affect the appeal of the units to potential renters. For example, Mosey says, you may think including heat and water in the monthly rent will attract renters. But the actual cost of heat and water is quite different for a single occupant compared with a unit shared by three roommates. The more water and heat they use, the less money you keep.

Source – US News

Start Investing In Real Estate With Property Management

Once you buy your first rental property in the Houston Texas area make the right decision to manage your property correctly with professional property management with Vestpro Residential Service. Contact us today by calling (832) 498-0016 or click here to connect with us online. 

 

Posted by on June 22, 2016 in Real Estate Investing Tips

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8 Ways Real Estate Is Your Smartest Investment

8 Ways Real Estate Is Your Smartest Investment

 

Have you been thinking about investing in Real Estate but don’t know if it’s a smart investment to make for your portfolio? You’re not alone. 

Although Real Estate has been a strong place to invest for the last 4 years many people are still sitting on the fence deciding if they should but their first rental property when the right time has already arrived.

Stop what you’re doing, read this article and learn 8 reasons why you should get started with investing in Real Estate in Houston or elsewhere across the United States right now.

1. Positive cash flow.

One of the biggest benefits to income producing real estate investments is that leases generally secure the assets. This provides a regular income stream that is significantly higher than the typical stock dividend yields.

2. Using leverage to multiply asset value.

Another important characteristic of commercial real estate investing is the ability to place debt on the asset, which is several times the original equity. This allows you to buy more assets with less money and significantly multiply asset value and increase equity as the loans are paid down.

3. Low-cost debt leveraged to multiply cash flow.

Placing “positive leverage” on an asset allows for investors to effectively increase positive cash flow from operations by borrowing money at a lower cost than the property pays out. For example, if a property generating a 6 prcent cash-on-cash return were to have debt placed on it at 4 percent, the investors would be paid 6 percent on the equity portion and approximately 2 percent on the money borrowed, thereby leveraging debt.

4. Hedge on inflation.

For each dollar that is created, there is a corresponding liability. Real estate investments have historically shown the highest correlation to inflation when compared to other asset classes, such as the S&P 500, 10-year Treasury notes and corporate bonds.

As countries around the world continue to print money to spur economic growth, it is important to recognize the benefits of owning income producing real estate as a hedge against inflation. Generally speaking, when inflation occurs, the price of real estate, particularly multi-tenant assets that have a high ratio of labor and replacement costs, will also rise.

5. Capitalize on the physical assets.

Income-producing real estate is one of the few investment classes that, as a hard asset, has meaningful value. The property’s land has value, as does the structure itself, and the income it produces has value to future investors. Income producing real estate investments do not have red and green days, as does the stock market.

 6. Maximizing tax benefits.

The US Tax Code benefits real estate owners in a number of ways, including unlimited mortgage interest deductions and depreciation accelerations that can shield a portion of the positive cash flow generated and paid out to investors. At the time of sale, IRS allows investors a 1031 provision, allowing investors to exchange into a like-kind instrument and defer all taxable gains into the future. (See your tax advisor for full explanation.)

7. Asset value appreciation.

Over time, more and more inflation has made it into the economy, drastically reducing purchasing power. However, income producing real estate investments have historically provided excellent appreciation in value that meet and exceed other investment types. Properties historically increase in value as the net operating income of the property improves through rent increases and more effective management of the asset.

Click here to read reason #8!

Get Houston Texas Property Management 

Once you buy your first rental properties you owe it to yourself to get started with Houston Texas Property Management because, property management will save you the time, money and hassle of having to manage your rental properties yourself and best of all you will be able to devote more time to growing your investment portfolio.

Learn more about the affordable property management services we can offer you by calling us at (832) 498-0016 or click here to connect with us online. 

 

 

 

 

Posted by on June 14, 2016 in Real Estate Investing Tips

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What To Know When Searching For Houston Texas Property Management Companies

What To Know When Searching For Houston Texas Property Management Companies

Are you searching for Houston Texas Property Management Companies online? If so, you’ve come to the right place. Here’s what you should know when searching for a property management company.

Choose An Experienced Property Manager

Although most Houston Texas Property Management Companies claim that they are experienced when it comes to customer service, tenant retention, rent collection, maintenance and all of the day-to-day responsibilities that come with property management, you should take the time to review a company online to verify their experience.

You can do this online by searching the Better Business Bureau’s website or on social media websites like Facebook and Google my Business.

About Houston Texas Property Management Companies

Once you find a property management company that you’re interested in working with you should verify that they have actually have a team that specializes in maintenance, book keeping, and customer service because hiring a team will give you confidence that all aspects of your rental properties are professionally managed by a caring team of professionals instead of just one person.

Confirm That Your Tenants Can Pay Their Rent Online

Last of all, but most important, before continuing your search for Houston Texas Property Management Companies you should also confirm that the property management company offers their tenants the ability to pay rent online because, most renters are accustomed to paying their bills online and this will also make it easier for you to get paid as well.

Get Houston Texas Property Management

For affordable Houston Texas Property Management contact Vestpro Residential Services today by calling us at (832) 498-0016 or connect with us online.

 

Posted by on June 7, 2016 in Property Management Tips

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Houston Texas Property Management – 3 Tips for Tenant Retention

Houston Texas Property Management – 3 Tips for Tenant Retention

 

By Vestpro Residential Services, LLC

As a long time Houston Texas Property Management company we can tell you without a doubt that tenant retention is one of the keys to success with owning profitable rental properties because, the longer you have your properties rented for means you will have long term cash flow from each rental property.

If you haven’t thought about what you can do to retain your tenants this article will provide you with 3 tips you can use for tenant retention.

Tip #1 – Practice the Art of Regular Communication with Your Tenants

Although you may have the best tenants in the world, you should always practice the art of regular communication with them because, regular communication with your tenants will not only show them that you care and appreciate their business, it will also encourage them to contact you should problems occur at your rental property that need to be fixed or resolved.

Houston Texas Property Management

Tip #2 – Offer Your Tenants Incentives

Another successful Houston Texas Property Management tip that we can offer you is to consider offering your tenants incentives for doing things like paying their rent on time to reporting maintenance problems or issues to you when they occur. Some of the incentives you should consider offering your tenants include: free Wi-Fi (depending on rental property), free memberships to local health clubs and gift cards from local grocery stores.

Tip #3 – Create a Referral Program

Last of all, but most important, in the world of property management we know that if a tenant is responsible, pays their rent on time and keeps their rental clean the chances are that they have friends or family members who have similar tastes and traits so if you want to get more great tenants like the one that you currently have you should consider starting a referral program which includes paying your tenants a “bounty” when they refer people to you who may be interested in renting one or more of your rental properties.

Get Houston Texas Property Management

For Houston Texas Property Management contact Vestpro Residential Services, LLC today by calling us at (832) 498-0016 or click here to connect with us online.

 

Posted by on June 1, 2016 in Property Management Tips

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Landlord Tenant Laws Texas

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One of the keys to success with successfully owning a portfolio of rental properties in Texas is knowing landlord tenant laws because, the longer you own rental property the more likely it is that you may face a landlord-tenant dispute so it’s best to know the laws.

Landlord Tenant Law Refresher

Landlord Tenant Laws Texas

Required Landlord Disclosures in Texas

Under Texas law, landlords must disclose specific information to tenants (usually in the lease or rental agreement), such as the identity of anyone authorized to act on the landlord’s behalf and the tenant’s rights when the landlord fails to make necessary repairs. For a full list, see Texas Required Landlord Disclosures.

Texas Security Deposit Limit and Return

Texas state law does not limit how much a landlord can charge for a security deposit. However, it does limit when it must be returned (within 30 days after a tenant moves) and sets other restrictions on deposits. See Texas Security Deposit Limits and Deadlines for more on the subject.

Small Claims Lawsuits in Texas

Tenants can sue landlords in Justice Court for the return of their deposit, up to a dollar amount of $10,000. See Filing a Security Deposit Lawsuit in Texas Justice Court for advice for tenants filing suit. Landlords defending a security deposit lawsuit should check out Texas Landlord’s Guide to Security Deposit Disputes in Justice Court.

Texas Late Fees and Other Rent Rules

State law regulates several rent-related issues, including late fees and how much time (three days in Texas) a tenant who has not paid rent has to move. For details, see Texas Late Fees, Termination for Nonpayment of Rent, and Other Rent Rules.

Tenant Rights to Withhold Rent in Texas

Tenants may withhold rent or exercise the right to “repair and deduct” if a landlord fails to take care of important repairs, such as a broken heater. For specifics, see Texas Tenant Rights to Withhold Rent or “Repair and Deduct”.

Texas Termination and Eviction Rules

State laws specify when and how a landlord may terminate a tenancy. For example, a landlord may give a Texas tenant who has failed to pay rent an unconditional quit notice that gives the tenant three days (the lease may specify a different amount of time) to move out before the landlord can file for eviction. See State Laws on Unconditional Quit Terminations and State Laws on Termination for Violation of Lease for details on these types of termination notices in Texas.

Source

Get Property Management Here

For affordable property management contact Vestpro Residential Services, LLC today by calling us at (832) 498-0016 or connect with us online.

We currently serve clients in Houston, Atascocita, Clear Lake, Huffman, Humble and look forward to the opportunity of earning your business!

 

Posted by on May 27, 2016 in Landlord Tenant Laws

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How to Handle Emergencies and Keep More Tenants

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One of the biggest problems that can hurt any property owner is how they handle emergencies at their rental properties. Sadly, how any property owner handles emergencies should be one of the most important skills that they master because, it’s very easy to lose tenants if you don’t handle an emergency at your rental property quickly and efficiently.

In this post we will share with you several tips that you can use for handling emergencies at your Houston Texas Rental Properties so you can keep your tenants happy and not lose business.

Tip #1 – Make Contact with You Easy

Although you may not want to be available to your tenants 24/7, the reality is that swift communication with your tenants is the key to success with resolving problems and keeping them happy.

If you don’t have a team managing your rental properties you should consider signing up for a call center so that you can receive messages and be contacted after business hours should problems occur.

Tip #2 – Document Everything

Regardless if it’s a broken pipe or leaky toilet, you should document all problems that occur at your rental property and then document the solutions to those problems because, some tenants may use problems as excuses to not pay their rent, or to move to another rental property, and proper documentation is an important part or professionally managing a rental property and generating long term income from it.

Tip #3 – Keep a List of Contractors On Hand

Another important thing you can do to handle problems at your rental property quickly is to have a list of contractors on hand that you know offers fast, reliable service, especially after hours or on weekends, because, this will enable you have someone you can call to resolve problems quickly without further delaying getting the problem fixed.

Get Houston Texas Property Management

To get property management for your Houston Texas Rental Properties contact Vestpro Residential Services today by calling us at (832) 498-0016 or click here to connect with us online.

 

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Posted by on May 16, 2016 in Property Management Tips

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How To Get Started With Entry Level Rental Property Investing — Even if You’re Renting

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There’s no denying that now is a great time for anyone to invest in Houston Texas Real Estate but how do you get started with Real Estate investing even when you’re renting?

Most people will tell you that you have to be a homeowner to get started with Real Estate investing but the good news is that getting started is a lot easier than you think.

You can get a mortgage through the FHA with a super low down payment if you live in the home. So, how do you live in it and rent it out too? No, not a roommate. You can purchase a duplex home and rent out one side while you live in the other. Because it is your principle residence, you can get FHA lending. You not only now own your home, you’re an investor too! The FHA will even let you count the future rental income to help you to qualify for the loan!

I’m not blowing smoke, and I’ll use a real life example duplex for sale in Houston, Texas, as well as rental rates, all as currently listed at Zillow.com. Here are the home particulars:

• Listed selling price is $255,000.
• Each side of the duplex is approximately 1996 square feet in size.
• Built in 2007.
• Rents of apartments and one side of duplexes in the local area justify a conservative rent income of $1,100 to 1,200/month.
• Zillow’s mortgage estimator shows the payment will be approx. $1,497/month.

Let’s become the world’s worst negotiator and pay full price for this home. However, we’re going to take advantage of the FHA and our credit score is good, so we’re going to be able to get a 3.5% down payment. With closing costs, we’ll bring about $9,350 to the closing table. Let’s run the numbers:

• You’ll be paying approximately $1,687/month with taxes and insurance included.
• You can reasonably expect to rent out the home for $1,150/month.
• Your gross out-of-pocket to live there is now $537/month.

Source – Huffington post

Get Houston Texas Property Management

Once you get started with buying your first rental properties make sure you save the time, money and hassle of managing those rental properties yourself with our Houston Texas Property Management services.

Call Vestpro Residential Services at (832) 498-0016 or CLICK HERE to connect with us online. 

 

 

Posted by on May 9, 2016 in Real Estate Investing Tips

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Is It Time For You To Consider Houston Property Management?

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There’s no denying that now is a great time to invest in local real estate thanks to great prices and low mortgage interest rates but as you grow your portfolio or rental properties you will also face more responsibility if you are managing those properties yourself and this is why you should consider Houston Property Management.

If you’ve been debating hiring a Houston Property Manager here’s how we can save you the time, money and hassle of managing rental properties yourself.

On Time Rent Collection

When you hire a Houston Property Manager you can rely on them for collecting your rent on time every month and either depositing the rent into your bank account or mailing you a check each month.

A property manager will also eliminate all rent collection delays and or excuses that traditionally come with rent collection for some owners plus insure that your rent is collected professionally each month without you having to go through the hassle of rent collection yourself. 

Professional Property Management

Your rental property will be professionally managed by a qualified property manager including all of the additional time consuming aspects of property management like maintenance requests and other service related issues.

Excellent Customer Service

Sometimes having an actual human being to call your tenants back matters most in the world of property management and when you hire a professional Houston Property Manager you can have confidence that all of your tenants will be responded to in a timely manner when they call or email the property manager.

Excellent Backup For You

Another benefit of hiring an experienced Houston Property Manager is that you can depend on them to be on top of any issues related to your property so that regardless if you live in Portland or are out of state your home or multi-family rental property will be professionally managed by caring professionals.

More Time to Grow Your Portfolio

Last of all, but most important, when you hire a professional Houston Property Manager you will have more time to focus on growing your portfolio of rental properties and focus on the next rental that you want to purchase for your portfolio.

Get Houston Property Management 

To learn more about our Houston Property Management Services contact Vestpro Residential Services today by calling us at (832) 498-0016 or click here to connect with us online.

 

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Posted by on May 7, 2016 in Property Management Tips

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What Are Fair Housing Laws? Are You Familiar With Them?

fair housing

Fair Housing Laws have been on the minds of many landlords across the United States this year but sadly few people really know what Fair Housing Laws mean and how it affects them if they own rental properties in the Houston area, or elsewhere in the United States.

In this article we will break down what exactly are fair housing laws and how they affect you if you plan on renting property.

Fair Housing Law History

Since 1968’s Fair Housing Act it’s been illegal for property owners to not rent to someone based on their age, family status, handicap, race, sexual preference or disability.

Under fair housing laws you may not:

  • Advertise your rental to show a preference to other races, religions or protected categories.
  • Set up standards to restrict individuals in the groups mentioned in the Fair Housing Act.
  • Require a larger deposit after a tenant moves in, change the terms of the lease, or develop and inconsistent policy for dealing with late rental payments from tenants.

Something That Cannot Be Ignored

Fair Housing Laws are important and must not be ignored because they level the playing field for rental properties in Houston, or nationwide, and insure that all renters regardless of their race, religion or origin will be able to rent safely in this country.

Get Professional Property Management Here

If you own one or more rental properties in the Houston Texas area you need professional property management to insure that all of your rentals are managed professionally and that the laws are followed. To learn more about the property management services that Vestpro Residential Services can offer you contact us today by calling (832) 498-0016 or click here to connect with us online. 

 

Posted by on April 26, 2016 in Fair Housing Laws

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3 tips for getting your Houston Texas Rental Property Ready For Summer

 

Houston Texas Rental Properties

Summer is right around the corner and with the weather already in the 70’s and 80’s during the spring one can only imagine what the summer is going to be like that’s why it’s important for you to get your Houston Texas Rental Property ready for summer by following these simple tips.

Tip #1 – Inspect Your HVAC System

Since your tenants will be using their HVAC systems during the summer months you should get HVAC and air conditioning units inspected now to insure that they are all running smoothly during summer months once warmer weather arrives.

 

Tip #2 – Check Insulation and Weather Stripping

Last of all, but most important, you should check the weather and insulation in your Houston Texas Rental Properties because proper insulation and weather striping will help your tenants to lower their energy costs and insure that their homes stay cool during the summer months.

Tip #3 – Close Up Crawl Spaces Under Homes

If your Houston Rental has a crawl space underneath it you should close up that space or any access point to your basement or underneath your home immediately because snakes and critters will seek shelter in cool spaces during the warmer months in Houston.

Tip #4 – Clean Up Brush And Dead Vegetation Surrounding Your Property

Take the time to clean up brush and dead vegetation surrounding your property since this will also make your yard space less attractive to critters and also create a firebreak between your home and open spaces if a fire breaks out during the summer.

Tip #5 – Remove Wood From Your Home

Another fire hazard and inviting spot for critters like snakes are wood piles and if one of your Houston Rental Properties has a wood pile somewhere on the property you should move it immediately to insure that the best interests of your tenants are protected during the hot Houston summer.

Get Property Management For Your Houston Texas Rental Property 

To learn more about how you can get your Houston Texas Rental Property ready for summer, or to speak with us about our property management services, contact Vestpro Residential Services today by calling us at (832) 498-0016 or click here to connect with us online.

 

Posted by on April 19, 2016 in Houston Texas Rental Property

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