How often should your Houston TX rental property be inspected?

If you’re like most owners you’ve probably wondered how often should you have your Houston TX rental property inspected.

Should you have it inspected every three months, six months or one year? In this blog post we will answer this question and provide you with more property management tips.

How Often Do I Need a Rental Home Inspection?

So how often should you schedule a rental home inspection? It depends upon several factors:

If you have crawlspaces or a basement, you might want to invest in a rental home inspection every 2-3 years, or each time your property comes up for re-rental. You may also want to inspect this more frequently if you have older plumbing or wiring, or if your home is in an area with a lot of moisture, an extreme climate, or both.

If your home is newer and was professionally inspected when you bought it, and you don’t have major weather extremes, you can probably get away with a longer inspection cycle.

If your home has never been professionally inspected since you’ve owned it, do it now.

Another reason to have a rental home inspection is if you are planning a major renovation project anyway. Why? You don’t want to have already committed thousands of dollars to a bathroom remodel only to discover that you need to replace your furnace. Conduct a reconnaissance before you march.

Get Houston Texas Property Management Here

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

 

 

 

 

Are turnkey rental properties a smart investment for you to make?

On television, turnkey rental properties are highly touted because, many people like the idea of purchasing a rental property without having to do any work to get it ready for rent but the BIG question is are these rental properties a smart investment to make? 

About Turnkey Rental Properties

When we use the term “turnkey rental properties,” we are referring to the loosely defined investment strategy of buying, rehabbing, and managing a property through a third party. The process of working with a turnkey real estate provider typically looks something like this:

  1. Finding a property: Based on your personal investment goals, the company will help you to identify and build a portfolio of properties. Most claim to have a pre-vetted database of turnkey investment properties for you to consider. Some also have proprietary software to evaluate which properties are likely to produce the greatest returns.
  2. Funding the investment: Unlike experienced investors, most turnkey buyers are unfamiliar with the various ways to finance rental properties (e.g. various loan products, 401K, 1031 exchange). The turnkey provider will help you to evaluate a range of financing alternatives depending on your individual circumstances and goals.
  3. Acquiring the property: Once you’ve identified the property you’d like to purchase, the turnkey provider will assist you with all of the paperwork, home inspections, appraisals, loan documents, and more. They provide end-to-end service, much like a real estate agent would, but they specialize in working with long-distance buyers who want to take a hands-off approach.
  4. Renovating the property: Depending on the situation, some turnkey rental properties will be in need of major renovations, while others may simply need minor repairs to bring the property up to code. The turnkey provider will manage all renovations and maintenance for you.
  5. Managing the property: The primary reason that people buy turnkey rental properties is because someone else pledges to manage the property on a day-to-day basis. This includes finding tenants as well as responding to any tenant needs (e.g. fixing a leaky sink). It ostensibly creates a stress-free investment opportunity—all that’s left for the buyer to do is deposit those rent checks!

Generally speaking, most turnkey firms will charge around a 3% fee for property acquisition, and then anywhere from 7 to 10% for ongoing management of turnkey rental properties.

That said, it’s important to know that there are hundreds of turnkey firms across the U.S., and no two are exactly alike. Some will buy, rehab, rent, and THEN sell a property to you (the investor). Others specialize in helping you to find cheap properties (for as little as $20,000!) that need major renovations—and the turnkey company will take on all of those renovations for you. The range of services can vary greatly, so be sure to thoroughly research several turnkey providers before you commit to anything.

The Growing Popularity of Turnkey Rental Properties

Turnkey rental properties have proven a great fit for people like Yang Guo, a 30-year-old data scientist who lives and works for a tech company in San Francisco. Even though he earns a good salary, he’s been priced out of the Bay Area. Nonetheless, Guo still wanted to add real estate to his investment portfolio.

Guo ultimately purchased two properties: A small home in the suburbs of Birmingham, AL and another outside of Columbia, SC. He worked with HomeUnion, a turnkey real estate provider based in Irvine, CA. HomeUnion helped Guo to purchase the two properties for a total of $60,000—quite the bargain in comparison with the Bay Area, where the median home price is over $675,000. HomeUnion, a 3-year-old startup, handled all of the necessary renovations, and they now manage the property for Guo. He’s never actually seen the properties or met the tenants—but he collects a rent check each month from 2000 miles away.

“There’s too much risk with buying property in the Bay Area,” Guo says. “As long as the cash flow is coming and hitting my bank account, I basically don’t care about seeing them in person.”

Novice real estate investors like Guo are attracted to turnkey rental properties because they’re lower-cost and less time-intensive to manage. The average turnkey investment property sells for between $50,000 and $150,000. Most are located in markets that were hit hard by the housing crisis. For example, Florida, North Carolina, Tennessee, Georgia, and Ohio have experienced an explosion of turnkey rental properties. In Florida, for instance, an estimated 12% of landlords are from out-of-state. Turnkey investors tend to come from high-priced markets and want to buy in states with low home prices and relatively strong rents.

However, long-distance real estate investors tend to lack local market knowledge. “You see these people coming from California and what I like to call ‘yuppie-ing up a place,’ but they don’t realize it’s not in the best area because they didn’t do their homework,” says Tony Kazanas, a Cleveland area real estate agent. There are all sorts of miscellaneous things that novice real estate investors don’t consider, like local vacancy rates or the need to obtain hurricane or other specialty insurance. Turnkey companies fill these important gaps by providing local market expertise.

The Dangers of Turnkey Rental Properties

Based on our overview so far, turnkey real estate investment might seem like a no-brainer! Not so fast: Turnkey providers often target uneducated buyers and sell the promise of a stress-free, cash flow-generating investment opportunity. Unfortunately, too many buyers forget to do their due diligence. They fall for a compelling pitch and slick marketing materials, only to regret the investment down the road.

See, there has been an explosion of turnkey providers since the downturn of the housing market. Many of these companies are run by young adults in their early 20s who have little experience in real estate. They bank on the fact that most out-of-state buyers won’t come to see the properties they’re selling in person, which often haven’t been upgraded to turnkey standards. Some are pitching portfolios of turnkey rental properties that look like they’re straight out of the foreclosure process, where upgrades haven’t even begun. This isn’t a red flag for someone who intends to spend money on renovating the homes; but many turnkey investment providers sell people on the fact that the homes have already been renovated when that isn’t actually the case.

As it turns out, many of these turnkey providers are expert internet marketers, not expert real estate professionals. Many are less than capable of managing the properties that they’re selling to you.

Here are some key warning signs that a turnkey real estate company may not be as legitimate as they seem on the surface:

  • Inexperienced operators: Find out how long the company has been in business, where they’ve invested in real estate, and how many buyers they’ve worked with. Don’t be shy about calling references. If you’re going to be getting into business with someone, you have the right to do your due diligence before signing on the dotted line.

  • Lack of direct investments: Has the company invested in its own portfolio of turnkey rental properties? If so, what types of returns are they getting? It’s a major red flag if the company doesn’t own and manage its own properties—how else will they know how to look after yours?

  • Weak support structure: Is the person who’s selling you on the investment the same person responsible for property acquisition, renovation, tenanting, and maintenance? If so, that’s an indication that there’s a weak support structure in place. Legitimate turnkey firms typically have a deep bench with professionals of varying expertise. If someone promises you that they can do it all alone, how much individual attention will your properties really be getting?

  • Shoddy renovations: Before going into business with a turnkey company, take the time to tour a few of the other properties that they manage. What condition is the property in, and have the renovations been done properly? If the company claims that thorough renovations have already been completed on the property you’re considering, an inspection is worth every penny. Otherwise, you could get stuck with costly repairs down the road.

  • Rental guarantees: Experienced real estate investors know that there is no such thing as a “rental guarantee.” A property may be more or less likely to rent quickly, but there’s no guarantee that it will be rented at the price the turnkey operator has stated. Spend some time doing your own market research to understand what rent prices are like in the area where you’re looking to purchase.

  • Overpriced properties: Similarly, spend some time researching the local market. Turnkey providers are notorious for selling overpriced homes to out-of-state investors who are used to expensive real estate markets. A home that sells for $200,000 might seem like a bargain compared to where you live—but if local comps are selling for half that, then there’s a good chance you’re being duped.

Get Property Management Help Here

For affordable and professional property management contact Vestpro Residential Services today by calling us at (832) 971-1841 or CLICK HERE to connect with us online.

 

Should You Accept A Partial Rent Payment At Your Houston Rental Property?

HOUSTON, TX. – If you’ve owned Houston Rental Property for any length of time you know that things change in the rental market for a variety of reasons.

Your tenants may become unemployed temporarily, roommates may move out, and you may be asked at least once if you will accept a partial rent payment but the BIG question is should you accept a partial rent payment?

Get Everything in Writing

As with any business arrangement when it comes to a partial rent payment you should get everything in writing including the amount of the first partial rent payment and when you expect the remaining balance to be due.

Your written agreement with your tenant should also include late fees that they are expected to pay as well just so they will understand that they are expected to have their rent caught up by a specified date instead of constantly rolling over the money that they are behind on their rent by each month.

partial rent payments

If You Don’t Want To Accept Partial Rent Payments

If you’re not open to accepting a partial rent payment from your tenants you should make sure that your lease clearly states that partial rent payments are not accepted just so you can fall back on your lease and follow through with some of the typical penalties for tenants who are late paying their rent including late fees, daily late fees and eviction.

Partial rent payment situations hardly ever work out in the favor of the owner because once the tenant and the owner agree to a partial rent payment arrangement, the tenant may expect the ability to make partial rent payments in the future.

Worse yet, if the property owner or landlord chooses to evict the tenant they may be required by the courts to wait until the same time in the following month after the partial rent payment was collected because some courts will not start the eviction process in the same month that the partial rent payment was collected.

Get Property Management for Your Houston Rental Property

For effective property management at your Houston Rental Property contact Vestpro Residential Services today by calling us at (831) 971-1841 or click here to connect with us through our website.

Houston Rental Property Trends 2016

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There’s no denying that the Houston Rental Property Market has enjoyed strong growth in recent years but with overbuilding and few energy jobs than last year where does the rental market stand right now?

In this article, we will break down the local rental market and provide you with insight about what to expect from Houston if you plan on buying rental property in the area or moving to Houston and renting here.

About The Houston Rental Property Market

Over the last two years Houston has been one of the top cities in the United States for job growth but with falling oil prices earlier this year and overbuilding we’ve seen a drop in the rental growth rate but, while hiring in the energy industry remains soft the city has predicted that we can expect to see over 20,000 jobs added this year.

In fact, the oversupply of luxury apartments may have contributed to the scarcity of affordable rentals. The Chronicle also mentioned that over 6,000 units have already been knocked down or are scheduled for demolition. These older and cheaper units were to be replaced by more expensive housing.

People with higher incomes may benefit from decreases in rent or other concessions that landlords might offer. Renters with more modest incomes still won’t find the rents affordable and may have trouble locating cheaper rentals in many parts of the city. While landlords may struggle with occupancy rates in neighborhoods that are typically considered the most desirable, middle-class renters may have to satisfy themselves with longer commutes.

The number of units downtown in Houston are expected to double by next year. The downtown market also has the highest average rental rates in the entire city. It doesn’t matter how much trendy and convenient urban apartments are if job growth doesn’t support the increase in inventory.

Source

Houston Rental Property

Opportunity For Growth In Urban Areas

With an oversupply of luxury apartments in Downtown Houston there definitely is an opportunity for investors to purchase older rental properties in urban areas like The Heights, especially if they fix up those rental properties and offer a more affordable rental property to tenants who don’t want to pay up to $1,800 per month for a luxury apartment with tons of amenities.

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For the best Houston Rental Property Management contact Vestpro Residential Services by calling us at (832) 971-1841 or CLICK HERE to connect with us online.

Houston Texas Rental Property – Make Sure Your Stay On Top Of These Trends

HOUSTON, TX – Are you staying on top of the latest property management trends at your Houston Texas Rental Property? In this article, we will break down some of the latest trends that you should be on the lookout for the next time one of your properties comes up for rent.

Seniors Are Renting In Retirement

Did you know that more seniors are renting than ever before? That’s right, in 2016-2017 it’s not uncommon to find individuals over the age of 65 who are renting compared to 10 years ago when these same people were homeowners.

What’s also different about today’s senior citizens is that most seniors today want to stay active and prefer to live in areas where they can have easy access to transportation, cultural events, volunteer opportunities, community classes and trails for them to walk, hike or ride their bikes.

Multiple Generations in the Same Home

Another BIG change with today’s renters is that multiple generations are now living in the same home, and this includes seniors living with their adult children and grandchildren, so if you own a Houston Texas Rental Property that has dual living areas, this will be a major advantage since it will offer multiple generations living together the space they desire.

Houston Texas Rental Property
Houston Texas Rental Property

More Renters Work from Home

10 years ago the work from home trend was only just beginning and it wasn’t uncommon then to know someone who chose to work out of their home. In 2016-2017 times have changed and thanks to a recent study by Global Workplace Analytics we know that at least 25% of the U.S. population works from home.

How can you capitalize on this trend? If your Houston Texas Rental Property has a private office, ample storage space, or is wired for high-speed internet, you shouldn’t hesitate to promote these benefits when marketing your home online the next time it comes up for rent.

Get Houston Texas Property Management

For affordable Houston Texas Property Management contact Vestpro Residential Services today by calling us at (832) 971-1841 or click here to connect with us online.

For Rent in Houston TX – Small Renovations Will Boost the Value of Your Rental Property

Are you searching for ways to boost the value of your home For Rent in Houston TX? If so, you’ve come to the right place! At Vestpro Residential Services we manage a wide variety of rental properties in the Houston area and can tell you that small renovations will boost the value of a rental property every time.

In this article, we will share with you small renovations that you should make to your Houston Texas rental property.

Kitchen

Since we all spend the most time in kitchens and bathrooms one of the first places that you should invest some renovation money is in your kitchen. Some of the small renovations you should make in your kitchen include replacing flooring or lighting, purchasing matching appliances, repainting or refinishing cabinets and replacing door knobs and drawer pulls.

Bathroom

When it comes to the bathroom you should also focus on refinishing or repainting cabinetry, replacing drawer and door pulls, installing a new bathroom fan, removing carpeting if your bathroom still has it and of course painting the entire bathroom.

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Bedroom

In the bedroom of your Houston Texas Rental Property, you should focus on repainting the entire room, replacing flooring and replacing the light source in the bedroom with a ceiling fan.

General Improvements to Your Rental

Besides making improvements to the kitchen, bathroom and bedroom in your property For Rent in Houston TX you should also clean the HVAC / air conditioning system, replace old/outdated light fixtures throughout the rental property and improve curb appeal.

Market Your Home for Rent in Houston TX

If you’ve been thinking about renting out your home For Rent In Houston TX save the time, money and hassle of property management by contacting Vestpro Residential Services today by calling us at 832-971-1841 or click here to connect with us online.

 

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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. 

 

 

 

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. 

 

Curb Appeal: Front Yard Landscaping Ideas

Planning on updating the curb appeal for your Houston Rental Property?

Make your home an inviting fixture in your neighborhood with a few simple garden ideas that create a sense of welcome for visiting guests! Better Homes and Gardens can help you find accent pieces for your front yard landscaping that create intricate focal points along the walkway up to your front door, giving off visual cues as to what your guests can expect once they get inside your home. Don’t be afraid to add colorful.

Curb Appeal Improvement Tips

Homes with high curb appeal command higher prices and take less time to sell. We’re not talking about replacing vinyl siding with redwood siding; we’re talking about maintenance and beautifying tasks you’d like to live with anyway.

The way your house looks from the street — attractively landscaped and well-maintained — can add thousands to its value and cut the time it takes to sell. But which projects pump up curb appeal most? Some spit and polish goes a long way, and so does a dose of color.

Get Houston Property Management

To learn more about how you can increase the value of your rental property contact Vestpro Residential Services today by clicking here or contact us here today at (832) 498-0016.

 

Are Low Oil Prices Affecting Multi-Family Rental Performance In Houston?

By Vestpro Residential Services, LLC

HOUSTON, Texas – Earlier this year the multi-family rental market in Houston was booming as the city remained one of the top relocation destinations in the United States and in spite of low oil prices Houston still continues to remain strong and doesn’t show any sign of slowing down.

Rent Growth Levels Are Increasing

Thanks to recent statistics from Jay Parsons of MPF Research we know that lease renewals have actually increased every month of this year instead of decrease like many people initially thought they would.

As of April 2015 lease over rent growth increased by 6.1% and that’s much higher than the 5.3% lease over rent growth that we saw back in 2011.

Renter retention has also increased for 20 months straight and hasn’t shown any sign of stopping but the big question is why are renters staying put and renewing their leases?

In a recent interview Jay Parsons had this to say about renter retention in 2015: “Renters are increasingly choosing to stay put and renew their leases in spite of rapidly rising rents and historically large levels of new supply, which logic would suggest would be driving down retention. And the fact that retention is still so strong speaks to the depth of demand for apartments and to the absence of any sort of affordability crisis in conventional, investment-grade apartments.”

Grow Your Rental Property Portfolio Now

Another great reason to grow your portfolio of rental properties now is low mortgage interest rates which have continued to remain at 4%, or lower, all year long.

Recent news from Janet Yellen and the Federal Reserve indicates that the Fed most likely will not raise interest rates this year so if you’ve been thinking about adding more properties to your portfolio there’s never been a better time than right now

Get Houston Texas Property Management

Stop managing your rental properties yourself, save time and money with effective Houston Texas Property Management by contacting Vestpro Residential Services today by clicking here, or calling us at (832) 498-0016.