Enjoy The Tax Benefits Of Renting Your Home During Special Events


Are you planning on going on vacation this year? If so, you might want to wait to go on vacation during an annual event in the Houston area.

You may be able to rent your home for more money while a special event is in progress like Comicpalooza because more people will be in town during the week of that event and willing to pay higher rental rates.

Could Be Tax Free Income

Homeowners go on vacation and make tax-free income while temporary tenants rent their home. Homeowners can benefit from a little known provision in the tax code that does not require taxpayers to recognize the income derived from renting their home for less than 15 days per year. See Plan Ahead for Tax Time When Renting Out Residential or Vacation Property- special rules.

This situation can particularly benefit homeowners where there are large sporting events nearby like golf and tennis tournaments, championship games or other high attendance venues. The demand for a private residence can be more attractive than staying in a hotel which makes the price go up.

Obviously, there are challenges with personal belongings and damage but getting a premium rental rate and not having to recognize the income could be worth it. You’ll certainly want to discuss this with your tax professional prior to making this decision. You’d probably also want to get some help from an experienced real estate professional.

Source – In Touch Weekly

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5 Tips for a Low Stress First Rental Property Investment

Tip #1: Advice is OK, but Do Your Own Research

Take courses, read investment books, go to a seminar, or any other learning process that helps you to gain confidence to make decisions. I suggest that any books, courses or seminars be about how to select locations, value properties and evaluate the rental market. Your success will be based on your due diligence and most of all buying right in the right area.

Your first rental property investment is best done in your area of residence, where you know what’s going on economically. You want to know that the economy will support today’s decision into the future, as this isn’t a short term strategy. Understand who the major employers are, what drives people to move in or move away, and if things look good into the near future.

Tip #2: Don’t Just Rely on Real Estate Agents

Sure, now and then you can work with a real estate agent who handles foreclosures and get a good deal. Remember though that these will be “listed” foreclosures on the MLS, Multiple Listing Service. You and all of your competitor investors have access to the same information, so competition will likely drive up your cost of acquisition.

If you do your own marketing and locate motivated sellers, you have a greater chance of negotiation a good deal. Another approach is to work with an experienced real estate wholesaler. They are investors too, but they are experts and finding great deals that they can flip to rental property buyers at a below-market value price. Just check their references out and be sure they do know what they’re doing.

Tip #3: Know What Will Rent and for How Much

Check with property managers who handle single family homes. Go to the classifieds and check out what homes similar to the one you’re considering are renting for. Are the owners offering incentives like free months? This is usually a sign of a soft rental market or heavy competition, so you may want to try another neighborhood or property type.

Call on ads, drive around, talk to landlords as if you’re a tenant. The most important thing for you to know before the next tip is what you can reasonably and conservatively expect for rental income and low vacancy.

Tip #4: Get the Right Financing & Cash Flow

You need to know all of your costs, including estimating repairs and other maintenance costs. But, the mortgage is going to be your largest cash outlay, so it is your most important cost consideration. You’ll need to put 20% down or more in most cases. For a rental unit you may also pay a slightly higher mortgage interest rate. A great credit history helps in this regard.

Get a firm handle on all of your costs, then see what your mortgage payment with taxes and insurance escrowed will be. Let’s use an example of a $150,000 home with a $32,500 down payment and closing costs. If you can manage to clear even $250/month over cash out of pocket, your return on the actual cash invested is going to be around 9%.

Tip #5: Lock in Equity at the Closing Table

NEVER buy at retail market value. If you can’t get the home at a 10-20% discount to its current market value, don’t do the deal. You want to leave the closing table with that equity as either future profit or a cushion should you have to sell before your initially planned liquidation date.

If you’re going to work with a wholesaler who you may meet at a local investment club, be clear that you’ll want to see their valuation calcs and you’ll check them with your own. You give them your requirement. If it’s 15% below market value, then they will know what they have to deliver.

You’re in control here, and you don’t have to make a deal until you know it’s going to be a great investment.

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How to make landscape maintenance easier at your Houston rental property

Is landscape maintenance a problem at your Houston rental property? If so, like most owners you’re probably searching for ways to simplify landscape maintenance to either make your job easier or ensure that the landscaping is easy for your tenants to maintain.

Thankfully, landscape maintenance is easier than ever before especially if you follow these simple tips.

Invest in a Tractor

Getting the job done easily and efficiently comes down to having the best equipment. If you don’t currently have a tractor to help with your landscaping, this should be the number one item on your list.

“Whether you are building a fish pond, retaining wall or planting shrubs to beautify your home, you need a tractor,” says Dave Boyt at Hobbyfarms.com. “Use the front end loader of rear lift to move rocks and fill dirt and the blade to sculpt the ground, level off hills, direct drainage and build small ponds.”

When choosing a tractor, the most important factor to consider is horsepower: “If you are going to make a mistake, always make the mistake of buying too much horsepower,” says William C. Nelson III, president of Nelson Tractor Company. Horsepower will determine load size, which attachments you can use, and more.

Use this guide from Countryside Daily to determine the best tractor for your needs.

Choose Native Plants

Before you start planning the layout of your flowerbed or garden, find out which plants are native to your area. Native plants have already been proven to thrive in the soil and the climate in your immediate area, allowing you to do less while maintaining their regular growing cycle, according to Better Homes and Gardens.

Use the official USDA zone map to determine which plants will live most successfully in your region.

Build a Berm

A berm, or a small mound of dirt where you can plant flowers and trees, is a great way to make landscaping easier for two reasons:

  1. This landscaping element helps with drainage, thanks to the gentle slope of the mound. That means you have to worry less about overwatering your plants, as extra water will flow down the sides.
  2. A berm creates a focal point in your yard. With just one out front or back, you can forget about dealing with extra plants and other elements that would require more work to maintain. Add brightly colored plants to make it stand out.

HouseLogic recommends keeping the berm about 2 feet high, with 4 to 6 feet in width for every foot in height.

Don’t Focus on Plants & Trees

Plants and trees are what take a lot of maintenance time. Instead, focus on turning your landscape into an oasis with other elements that will look great even without regular upkeep. For example, build a flat rock walkway from your garage to the back patio, or create a community space where residents can sit on benches and enjoy evening fires. These small touches will go a long way in creating an inviting space that doesn’t require constant maintenance.

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For professional property management contact Vestpro Residential Services at (832) 498-0016 or click here to connect with us online.

Should you sell your Humble Texas home or rent it out?

Are you thinking about selling or renting out your Humble Texas home but can’t decide which decision is the right one to make?

You’re not alone.

Although the Humble Texas Real Estate market is going strong it may be a better decision for you to rent your property out rather than sell it, especially for these reasons.

Reason 1 – Your Home Will Generate Cash Flow

A rental property will bring in positive cash flow which you can depend on and use to supplement your income from your other investments

Reason 2 – Real Estate Is A True Asset

When you own Real Estate you will still continue to own a true asset that will continue to appreciate over time. 

Reason 3 – Owning Rental Property Is Easy

Thanks to property management services like Vestpro Residential Services you will be able to rent out your Humble Texas home without the traditional hassle or headaches which come with owning rental property.

We take care of everything for you so you can enjoy life and rental income as well.

Reason 4 – Create Income For Your Retirement 

Another great reason to rent your Humble Texas property is the fact that you can use the income generated from your home for your retirement.

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What to Look for When Investing in Multifamily Real Estate

Are you planning on investing in multifamily Real Estate for the first time and don’t exactly know what you should be looking for when it comes to investing in your first property?

In this article, we will share with you several tips that you can use for acquiring your first multifamily rental property to add to your Real Estate investment portfolio.

Tip #1 – Where Is It Located?

The first step towards finding the right multifamily rental property is analyzing the location because that old saying of “location, location, location” when buying or selling a single-family home is also true when it comes to investing in multifamily Real Estate.

Ideally, you should be investing in a multifamily property that’s in town, or within one hour of a major town, near shops/stores, close to schools or a major university, and within a short drive of major recreation options.

As an investor, you should also be searching for properties that are in high yield, high growth, well-maintained areas that are in demand or are rumored to be the future location for development by large corporations like Amazon.com.

Tip #2 – What Is the Total Number of Rental Units?

Once you find a great multifamily rental property the next step is to analyze the total number of rental units and the total number of rooms in each unit because this will also add to the desirability of the building itself and aid in keeping those units rented on a long-term basis.

More often than not you will find that most tenants are looking for 3-bedroom, 2 bath units so if you find a multifamily property that matches this criterion, and the building is in a great location, you may want to move forward with investing in that property.

Let’s say that you’re wanting to start small; in this case, you should consider investing in a multifamily rental property that’s either a duplex, triplex, or four-plex because these units are fairly easy for anyone to manage on their own while they are just getting started with owning multifamily rental properties.

Tip #3 – Verify the Potential Income

So, you’ve found a great multifamily rental property in a nice area that you’re excited about purchasing. Before moving forward with buying that property you should verify the potential income.

This tip is vital because even though the property may look great on the surface it could be in an area that’s not close to anything desirable and the building may have more vacancies than you know.

To verify the potential income, you should drive by other multifamily rentals in the area, speak with local property managers about what other buildings are renting for, and use the Internet to verify rents and prices of those buildings.

Tip #4 – Review the Costs

When buying a multifamily rental property, it’s also important for you to keep the costs in mind because financing the building may be different for you (depending on your credit score and finances) than it would be to finance a single-family residence.

Even though the financing side will be different, keep in mind that you may be able to qualify for owner-occupied financing if you decide to live in one rental while renting the other units out.

Tip #5 – Learn More About the Seller

Another important thing to do when buying a multifamily rental property is to learn more about the seller and their motivation for selling the property.

The property may be priced low but there could also be a story behind why the owner is selling for that price so don’t hesitate to ask questions before moving forward with buying a multifamily rental.

Tip #6 – Get Your Financing in Order

During the process of buying a multifamily rental property, it’s important for you to remember that financing is the same as buying a single-family home. You will have to have money ready for a down payment, a good credit score, and you should also be able to qualify for a traditional mortgage or FHA financing if needed.

Besides getting your financing in the order it’s also best to have one or more people that you can turn to for a co-signer (if needed).

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What tax impact will disasters have for Houston rental property owners?

Once it’s finished, 2017 will be remembered as one of the toughest years in recent memory especially thanks to Hurricane Harvey which formed on August 17th, carving a path of destruction in Houston and along the Gulf Coast until it dissipated on September 3rd.

What Tax Impact Will Natural Disasters Have For Property Owners In Houston?

When a major disaster occurs, the IRS normally tries to help the victims out by extending tax deadlines. After all, no one wants to have to worry about making tax payments or filing returns while their property is underwater or destroyed by a fire. For example, victims of Hurricanes Harvey, Irma, and Maria will not be required to make most types of tax payments and filings until January 31, 2018.

The IRS automatically identifies taxpayers located in a covered disaster area and applies the extended deadlines. Thus, to benefit from the extended deadlines, your rental property simply has to be located in a federally declared major disaster area. There is no need to ask the IRS for a deadline extension. You can determine if an area has been declared a disaster area by checking the FEMA website.

Deducting Losses from a Disaster

Insurance is always the first line of financial defense when disasters occur. However, not all rental properties are fully covered for losses due to natural disasters. Some types of losses may not be covered at all. For example, losses due to floods, hurricanes, and earthquakes may not be covered unless the property owner has obtained a supplemental policy. Even if a loss is covered, the property owner may still have to pay for part of the cost of repairing or replacing the rental property.

Fortunately, any uninsured casualty losses are deductible by rental property owners, subject to certain limitations. A “casualty” is damage, destruction, or loss of property due to an event that is sudden, unexpected, or unusual. Deductible casualty losses can result from many different causes, including (but not limited to):

  • Earthquakes
  • Fires
  • Floods
  • Government-ordered demolition or relocation of a building that is unsafe to use because of a disaster
  • Landslides
  • Sonic booms
  • Storms, including hurricanes and tornadoes
  • Terrorist attacks
  • Vandalism, including vandalism to rental properties by tenants
  • Volcanic eruptions

One thing that all of the events in the above list have in common is that they are sudden—they happen quickly. Suddenness is the hallmark of a casualty loss. Thus, loss of property due to slow, progressive deterioration is not deductible as a casualty loss. For example, the steady weakening or deterioration of a rental building due to normal wind and weather conditions is not a deductible casualty loss.

The Role of Insurance After a Disaster

A rental property owner may take a deduction for casualty losses only to the extent that the loss is not covered by insurance. If the loss is fully covered, there is no deduction. A property owner can’t avoid this rule by not filing an insurance claim. Indeed, a timely insurance claim must be filed, even if it will result in cancellation of the property owner’s policy or an increase in premiums.

The amount of the claimed casualty loss must be reduced by any insurance recovery received, or reasonably expected to be received if it hasn’t yet been paid. If it later turns out that the property owner receives less insurance than expected, the owner can deduct the amount the following year. If the owner receives more insurance payments than expected, the extra amount is included as income for the year in which it is received.

Amount of Casualty Loss Deduction

How much a rental property owner may deduct depends on whether the property was completely or partially destroyed.

If the property is completely destroyed (or stolen), the deduction is calculated as follows:

Adjusted basis – salvage value– insurance proceeds = Deductible loss

Adjusted basis is the property’s original cost, plus the value of any improvements, minus any deductions taken for depreciation or Section 179 expensing. The adjusted basis for rental buildings, land improvements, and landscaping are each determined separately. Adjusted basis should be easily found from a rental property’s depreciation schedules and/or tax returns filed for the property. Salvage value is the value of whatever remains after the property 
is destroyed; in cases of total destruction, this is often nothing.

If the rental property is not completely destroyed, the amount of the casualty loss is the lesser of 1. The property’s adjusted basis or 2. The decrease in the fair market value of the property due to the casualty, minus any salvage value and insurance proceeds.

An appraisal can be used to determine the reduction in fair market value of partly damaged property, as well as salvage value. Alternatively, the cost of cleaning up or making repairs after a casualty can be used as a measure of the decrease in fair market value if all of the following conditions are met:

  • The repairs are actually made
  • The repairs are necessary to bring the property back to the condition it was in before the casualty
  • The amount spent for repairs is not excessive
The repairs are for the damage only
The value of the property after the repairs is not greater than its value before the casualty

The amount of a casualty loss to rental property must be calculated separately for each item that is damaged or destroyed. This may include a rental building, landscaping, and other land improvements apart from the building. However, it is not necessary to separately deduct personal items inside a rental property, such as appliances.

Example of Casualty Losses

John’s rental building suffered wind damage due to a hurricane. The hurricane not only damaged the building, but damaged his landscaping—trees and shrubs—as well. John must separately calculate his casualty loss for the building and
 the landscaping. The adjusted basis of the building is $566,000. The trees and shrubs have an adjusted basis of $10,000. John hires an appraiser who determines that the fair market value of the building immediately before the hurricane was $700,000, and was $650,000 immediately afterwards. The fair market value of the trees and shrubs immediately before the casualty was $4000, and afterwards was $500. John’s insurance did not cover hurricane wind damage, so he expects to receive no insurance proceeds.

John calculates his casualty loss for the building as follows:

  • Adjusted basis of rental building before hurricane: $566,000
  • Fair market value before hurricane: $700,000
  • Fair market value after hurricane: 
  • Decrease in fair market value: $50,000
  • Amount of loss (line 1 or line 4, whichever is less): $50,000
  • Insurance reimbursement: 
  • Deductible casualty loss = $50,000

John separately calculates his loss for the landscaping as follows:

  • Adjusted basis of landscaping before hurricane: $10,000
  • Fair market value before hurricane: $4,000
  • Fair market value after hurricane: 
  • Decrease in fair market value: $3,500
  • Amount of loss (line 1 or line 4, whichever is less): $3,500
  • Insurance reimbursement: 0
  • Deductible casualty loss 
= $3,500

Deducting Losses in Federal Disaster Areas from Prior Year Taxes

Casualty losses are generally deductible in the year in which the casualty occurs. However, if a deductible casualty loss occurs in an area that is declared a federal disaster by the president, the property owner may elect to deduct the loss for the previous year. This will provide a quick tax refund, since the owner will get back part of the tax paid for the prior year. If the owner already filed the tax return for the prior year, an amended return for the year must be filed.

Casualty Gains

It’s quite common for a rental property owner to have a casualty gain rather than a loss. This occurs when the insurance reimbursement an owner receives exceeds the adjusted basis of a property that has been completely destroyed.

Example of Casualty Gains: Part 1

Sheila owns a rental building with a fair market value of $500,000. After years of depreciation deductions, its adjusted basis is $250,000. The building is totally destroyed in a fire. Sheila receives $480,000 in insurance proceeds. She has a $230,000 casualty gain.

A casualty gain is taxable income. However, the property owner need not pay tax on the gain the year it is received if the owner replaces the destroyed property and the cost exceeds the insurance recovery. Instead, the gain is postponed until the replacement property is ultimately sold or otherwise disposed of. The basis of the replacement property is reduced by the amount of this postponed gain.

To qualify as replacement property, the new property must be similar or related in service or use to the property it replaces. However, the rules are more liberal if the destroyed property was located in a federally declared disaster area. In this event, any replacement property acquired for use in any business is treated as replacement property. Moreover, the replacement property doesn’t have to be located in the federally declared disaster area.

To avoid paying tax on a casualty gain, the property must replaced within two years after the close of the first tax year in which insurance proceeds are received. However, if the property is located in a federally declared disaster are, this period is increased to four years.

The property owner doesn’t have to use the insurance proceeds to acquire the replacement property. Rather, the owner has the option of spending the money they receive from the insurance company for other purposes, and borrowing money to buy replacement property.

Example of Casualty Gains: Part 2

Assume that Sheila uses her $480,000 insurance proceeds to construct a new rental building. The new building cost $600,000. Sheila need not pay any tax on her $230,000 casualty gain since she reinvested her entire gain in replacement property. However, the basis of the new building is reduced by $230,000 to $370,000. This way, tax on the gain will have to be paid when Sheila ultimately disposes of the replacement property.

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Property Management Tips – Is It A Bad Thing To Own Too Many Rentals?

Are you thinking about buying rentals to add to your portfolio and are wondering if it can be a bad thing to own too many? The answer to this question is both yes and no.

Yes, it can be a bad thing to own too many rental properties unless you hire a professional property management company to manage those rentals for you.

If you’ve been “on the fence” debating if you should hire a property management company or not to professionally manage your rental properties, this article will provide you with reasons to hire a property manager.

Rent Collection

One of the biggest problems most property owners who own homes or multi-family properties have is collecting rent from their tenants each month especially when their tenants fall behind on paying.

Thankfully when you hire Vestpro Residential Services to manage your Houston Texas Rental Properties you can have confidence that your rentals will be professionally managed and rent will be collected from your tenants on time each month eliminating the need for you to contact tenants or start collections against them if they don’t pay.


Another big problem for some owners has been the issue of maintenance because, it’s not always easy to handle maintenance issues if you own multiple properties.

With Vestpro on your side you will have peace of mind in knowing that your tenants will call us when they have maintenance issues and this will also help you keep tenants as well because, your tenants will know that the can depend on the property management company to solve problems when they occur instead of hearing making empty promises.

Customer Service

Last of all, but most important is customer service.

Many property owners offer customer service and poor support so that whenever there is an issue at one or more of their properties it will go unresolved for weeks or months.

At Vestpro we take pride in offering great customer service so that if your tenants call in with an issue they will be served by true customer service professionals every time.

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Will Your Rental Make More Money With A Laundry Room?

Thinking about building a laundry room at your rental property? Yes, it’s true that laundry rooms are a good investment to make but before you spend the money it’s important to ask yourself these questions.

Question #1 – Will My Tenants Actually Use This Laundry Facility?

The very first thing you should do before building a laundry room on site at your four-plex, or multi-family unit, is to speak with each of your tenants personally and find out if they would be open to using a laundry room if there was one on site.

You should also ask your tenants where they do their laundry now, and how much they are paying per load, so you have a better idea of what local laundromats are charging in the area.

Question #2 – How Many Washers and Dryers Will I Need?

To avoid overspending on washers, dryers, and other hardware, you should consider starting small and maybe buying two washers and dryers first.

Also another thing you can do to make adding more washers and dryers in the future easy is to add additional outlets and plumbing to your laundry room when it’s under construction.

Question #3 – What Will Your Laundry Room Hours Be?

As with any laundromat in Houston Texas Rental Property it’s important to have set hours for the laundry room in your Houston Texas Rental Property that way people know when they can use it. This will help to keep noise at a minimum in the evening and insure that all tenants respect the laundry facility.

Houston Texas Rental Property Management

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Is Your Rental Scaring Away Renters? Click Here!

Have you put a lot of time, money and energy into your rental property only to find that it’s still not renting and you can’t figure out why?

Your Curb Appeal Is Scary

Take a look at the curb appeal for your Rental and think like a potential renter.

Are there overgrown trees or bushes?

Does the grass look like it hasn’t been mowed since last year?

If you answered yes to either of these questions it’s time to do a property clean up and do your part to improve the curb appeal of your rental property.

The Inside of Your Rental Property Is Scary

When was the last time that you spent 10 minutes inside your rental?

Does it have plenty of light inside? If not, lack of light can be sending potential renters away since light always helps to make the inside of a rental look brighter and cheery.

Consider improving the lighting in each room and also painting the rooms of your rental bright colors like yellow or green since bright colors will bring light to any room regardless if the room gets a lot of natural light or not.

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Tips for Getting Your Rental Property Ready for Fall Weather

Fall 2017 is officially here and with it comes a change in weather! If your rental property isn’t ready for the change in weather it could be left unprotected. Thankfully, you can get ready for fall weather simply by following the tips in this article.

Do end-of-season yard maintenance.This doesn’t just include raking the leaves (although that’s important, too!). It also means trimming the hedges, fertilizing the grass, trimming unwieldy branches, and removing any weeds or roots that may impact siding, patios, and walkways.

Pack up and store outdoor items.It may seem a little premature to do now–but if the recent spate of hurricanes is any indication of what the rest of this season will look like, it’s a good idea to start now. Clean, pack up, and store outdoor furniture, grills, and other items that could be damaged by late fall or winter weather. If your property is located in a hurricane-prone area, be sure to tie down any large items that could wash or blow away.

Drain water lines.If your property is located in a cold-weather climate, now is a good time to turn off the water leading to outdoor spigots. Turn off sprinkler systems and drain outdoor hoses to prevent water from freezing and bursting the lines.

Clear debris from gutters.One of the best things about fall is watching leaves transform into beautiful shades of red, orange, and yellow. But it only lasts for so long–and then those leaves fall, clogging gutters in the process. Be sure to clear all debris from rain gutters to prevent water from pooling–or worse, causing roof damage.

Inspect the roof.Climbing up a ladder and getting onto the roof is not for the faint of heart, but it’s a worthwhile exercise to ensure that the roof is in good condition when you’re heading into the winter months. Loose or missing shingles are easier to replace during the fall. Otherwise, you could face costly roof repairs caused by hail, sleet, and snow.

Seal windows and install storm doors.Aging seams and weather stripping around windows and doors often lets cold air in and warm air out. This drives up heating costs, which can add up for landlords and HOAs that pay for heat as part of their fees. Seal drafty windows and doors with caulk, install new windows if necessary, and swap out screens with storm doors and windows.

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