What are the main reasons you should invest in Houston Real Estate?

Have you been thinking about investing in Houston Real Estate but you’re not sure if now is the right time for you to invest or not?

Now is a great time to invest in Real Estate especially for these reasons:

Reason #1 – Demand

Thanks to a recent study by the Harvard University Joint Center for Housing Studies and their 2015 State of the Nation’s Housing Report we know that demand has been one of the primary factors which has been driving the Real Estate market during 2015.

There’s been huge demand for rental properties and an even bigger demand for homes for sale thanks to historically low mortgage interest rates which has brought out the first time home buyer, and casual investor, in search of Houston Texas Real Estate and homes nationwide.

Reason #2 – Mortgage Interest Rates Will Increase

Many economists predict that Federal Reserve Chairwoman Janet Yellen will be increasing mortgage interest rates gradually in the coming months and these increases can mean the difference between paying less money now for a mortgage payment, or more if you buy a home in the future.

Reason #3 – Home Ownership Has Dropped While Renting Has Increased

Last of all, but most important, you should invest in Houston Texas Real Estate is because of the fact that renting has increased across the United States while the actual homeownership rate has decreased.

With a greater demand for rentals nationwide especially among Millennials and Baby Boomers it makes sense to invest in Real Estate because that demand isn’t expected to change in the coming years.

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To get started with investing in Houston Real Estate contact Vestpro Residential Services, LLC today by calling us at (832) 498-0016 or CLICK HERE to connect with us online.

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Houston Texas Rental Market – Reasons to Have Renters Insurance

By Vestpro Residential Services

HOUSTON, TX. – Do you own rentals on the Houston Texas Rental Market? If so, there’s no denying that Hurricane Harvey was one of the worst natural disasters that we’ve ever seen and a prime example of why your tenants should have renter’s insurance.

How Should Houston Renters Get Started With Renters Insurance?

Thankfully it’s very easy to get started with renter’s insurance thanks to the Internet, any Houston renter can search online and get quotes for a renter’s insurance policy in as little as 10 minutes.

A typical renter’s insurance policy will cost a renter about $30 per month and the average deductible will be about $500.

Property owners in Houston should require their tenants to have renter’s insurance because, not only does the renters insurance policy protect the tenant if their personal belongings are damaged or destroyed due to fire or some other act of God, the renter’s insurance policy also acts as a liability policy by protecting the tenant if one of their guests is injured and needs medical attention while they are in the tenant’s rental property.

Besides covering the medical costs and expenses, the renter’s insurance policy will also cover the tenant’s legal costs as well.

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

Houston Texas Rental Market

Pool Safety Tips To Start Using Now

The “dog days” of summer are officially here and for the coming months we can expect temperatures in the Houston area to reach the triple digits.

If you own a rental property with a pool or spa area it’s more important than ever for you to be enforcing pool safety rules because not only will this protect your tenants, it will also protect your best interests as well and avoid any accidents, injuries or lawsuits at your swimming pool.

Pool Safety Tips You Should Start Using Now

  1. Install anti-entrapment drain covers. Make sure that your drain covers are compliant with the Virginia Graeme Baker Pool & Spa Safety Act of 2007. Virginia was the 6-year-old granddaughter of former Secretary of State James Baker. She was killed in 2003 when the suction from a hot tub drain caused her to drown. The federal law was named in her memory. Between 2012 and 2016, 17 people were trapped by drains, 14 of whom were younger than 15 years old. 2 of those victims drowned, both in residential spas.

  2. Use safety vacuum release systems with pool pumps. If the pump detects a change in vacuum pressure that could be caused by a person’s body, the pump will either shut off, or the system will inject air into the pump. This will free the person from the suction, thereby preventing drowning.

  3. Educate parents on community pool safety tips, including keeping children away from pool drains.

  4. Train staff on first-aid and lifesaving techniques. Have a Red Cross employee train your staff and any interested residents on community pool safety.

  5. Child-proof pool enclosures. Fencing around your pool area should be at least 4 feet high. Check for areas where older children could sneak through. Make sure that gates are self-closing and self-latching, with latches out of reach of very small children.

  6. Post community pool safety rules in a prominent location. In writing these rules, residential managers must balance community pool safety with the danger of discriminatory language. A blanket rule such as “No children under age 13” may not pass legal muster. This is particularly true in California, where we have at least two precedents: Iniestra v. Cliff Warren Investments, Inc. and Llanos v. Estate of Coelho. Both cases found that rules restricting children from using pool facilities without an adult, or keeping them away from adult-only areas, were overly restrictive and constituted prima facie discrimination. For more on this topic, check out our post Watch Your Language: What Can We Learn from Recent HUD Enforcement Actions?

  7. Enforce no-alcohol rules in your pool area. Give your security guards the authority to remove residents or guests who are disregarding community pool safety or abusing pool privileges.

  8. Don’t allow plugged-in devices anywhere near the pool deck or hot tub. You can also disable electrical outlets that are in close proximity.

  9. Prohibit glass containers in the pool area. One shattered glass endangers a lot of bare feet.

  10. Get a staff member certified in pool maintenance. Even if you subcontract pool maintenance out, it’s a good idea to have someone on staff educated in chlorination, sanitation procedures, and what it takes to maintain a busy swimming pool. Here’s a list of certified pool operator training programs from the Center for Disease Control and the National Swimming Pool Foundation.

  11. Check chlorine and pH levels at least twice a day with pool test strips. The Center for Disease Control recommends that you check for free chlorine (2-4 ppm) and bromine (4-6 ppm). The pH level should be between 7.2 and 7.8. This will prevent outbreaks of Legionnaire’s Disease, which can be caused by pathogens that develop in insufficiently sanitized water, and can spread via water vapor or droplets.

  12. Inspect pool equipment annually, such as pumps, drains, and heaters. Keep a logbook to track inspections.

  13. Inventory lifesaving supplies. Check to make sure that no one has stolen, vandalized, or lost your pool rings and rescue poles.

  14. Consider hiring a lifeguard. Outsourcing this to a lifeguard service may make sense from a liability perspective. Ensure that your vendor is insured and bonded. If your budget is tight, you can potentially hire a pool attendant rather than a trained lifeguard. You can learn about the differences between pool attendants and lifeguards on Guard for Life.

  15. Hire a pool management company. Again, a properly licensed, bonded, and insured pool management company can take the day-to-day load of pool maintenance off of your staff. It also relieves you of the hassle of storing large amounts of HAZMAT materials on-site. Furthermore, since they carry their own errors and omissions insurance as well as general liability coverage, their insurers will absorb any liability that may arise from pool-related incidents. A professional pool maintenance firm will also keep up with community pool safety-related federal, state, and local laws—something that your staff may not have time to do.

  16. Consider installing CCTV cameras to surveil your pool area. These systems are much less expensive than they used to be even a few years ago. They can feed directly to your security shed at night and help you to prevent after-hours incidents and lawsuits.

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

 

Tips for Finding a Contractor You Can Trust

Are you planning on having some work done on your rental property? If so, one of the keys to success with maintaining rental property for the long term that also produces consistent cash flow is finding a contractor you can trust. Thankfully, we got you covered with these 11 tips that will help you to connect with the right contractor.

1. Insist on a license.

Don’t accept excuses like, “I haven’t renewed my license yet this year” or “It’s pending.” All of these coverages ultimately protect you, the consumer, with vital safeguards like insurance requirements.

2. Ask for referrals.

One of the best methods for finding a contractor that you like is to ask your fellow property managers who they use.

3. Check with state or county authorities.

They’ll have a record of any complaints or revoked licenses. Keep in mind that any contractor who’s been in business for a while may have a few complaints; what you want to be wary of is a negative pattern on their licensing record.

4. Use a General Contractor Firm.

General contractor’s licenses are more difficult to get. General contractors are accustomed to carrying insurance that protects both them and you, the customer, against damage that may be caused by their subcontractors.

5. Anticipate problems.

Jobs may not be completed as planned for a few reasons: a scheduling error, inadequate manpower, insufficient materials, or an injury on the job site. If you enter each job prepared for the worst, you’ll be more resilient in the face of unexpected issues.

6. Get multiple bids.

This is about more than getting the best price. A variety of bids will set a price range, and set your expectations for how the work will be done.

7. Don’t automatically take the lowest bid.

The lowest price, though enticing, may be because the company is using subpar materials or illegal labor; or they may be skimping on workers’ compensation.

8. Don’t pay for bids.

Reputable contractors will get their fair share of work from their own bids, without you having to pay just to get them to consider your project.

9. Get proof of insurance.

Specifically, you want to see proof of sufficient general liability, contractors liability, and workers’ compensation insurance as a minimum.

In addition, make sure that the total coverage amount is adequate in proportion to the size of the job and the nature of the building. If it’s not, you should feel comfortable asking the contractor to purchase more insurance.

10. Verify liability coverage.

Errors and omissions in professional liability coverage comes in two basic forms: “occurrence” and “claims made.” It’s important to understand the distinction.

  • Occurrence: Provides coverage for any incidents or accidents that occur during the policy period, even if you don’t file the claim or issues don’t even become apparent until after the policy expires.
  • Claims made: These policies do not provide coverage after the policy has expired, unless the contractor purchases tail coverage.

11. If you’re a landlord, consider a surety bond.

A surety bond is a kind of insurance protection for the landlord. The contractor pays a sum to a bond company, and in the event that the contractor fails to perform, the surety bond company pays a sum to the landlord.

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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.

5 Basic Tips for Investing in Real Estate

Are you planning on getting started with Investing In Real Estate during 2017? If so, you’re not alone. Thanks to the excellent returns from Real Estate many investors have chosen to invest in rental properties in Houston, and across the United States.

Before getting started with investing in Real Estate you should follow these 5 basic tips for investing in Real Estate.

1. Location Matters

The old adage that “location matters” is most accurate when it comes to real estate investing. Before you fork over a down payment and put yourself in a significant amount of debt over a property, ensure that it’s in a good location.

Look for the worst house on the best street. That’s a principle you’ll come across quite a bit as you delve into further real estate investing advice.

You want to invest in the worst house on the best street because it gives you an opportunity to build equity. It’s a property in a great neighborhood (“the best street”) that needs some work (“the worst house”). You can invest some money to fix it up and sell it to someone else who wants a ready-to-move-in house in a fabulous location. Professional real estate investors call this “fixing and flipping.”

2. Look for Wholesale Properties

Investing in real estate is just like investing in the stock market in at least one way: you’re looking for the best deal. If you’re a savvy stock market investor, you probably won’t buy too many stocks at their high if you plan on holding them for a long time. Instead, you’ll follow the Warren Buffet principle of getting greedy when everyone else gets fearful. You’ll buy stocks that are beaten down and make a fortune when they turn around.
That’s what you want to do when it comes to real estate investing. Avoid paying “full price” for properties. Instead, look for so-called wholesale properties that are offered at a steep discount. Sure, they’ll probably need some work. Run the numbers and see if the investment in rehab is worth the ultimate selling price.

As noted at ThinkConveyance: “You can easily invest $20,000 in a property and add twice that much to the selling price. That’s why real estate investing is so attractive to investors who want to maximize their return on investment.”

3. Understand the Tax Benefits
The people who run our government want private investors to provide housing for people. That’s because they know that if private investors don’t provide housing, then the government will be responsible for it.

To that end, Uncle Sam offers significant tax benefits to real estate investors. The most significant benefit, arguably, is the depreciation write-off. When you buy an investment property that includes a building, you get to write off the depreciation of that building as a tax deduction. You’ll have to consult your tax advisor for specifics, but basically you can expect to depreciate a residential building over 27 years and a commercial building over 39 and a half years.

Keep in mind that the IRS views your real estate investment efforts as a business so you also get to claim the “necessary and ordinary“ deductions that business owners take, including mortgage interest, insurance, and maintenance expenses. Again, it’s a good idea to consult your tax advisor about specifics.

4. Check Your Credit Report

You’re more than likely going to need to borrow money to buy real estate. That’s why you should check your credit report before you begin investing in real estate.

If you have problems on your credit report that are mistakes, get those resolved as quickly as possible. If you have problems that are legitimate, then you’ll need to work to improve your credit.

Simply put, banks aren’t going to loan money to you for a property that’s not your primary residence as readily as they’ll loan it to you for your own home. That’s why your credit has to be spectacular.

5. Use the “1% Rule”

If you’re planning on buying a property that you’ll rent out one or more tenants, use the “1% Rule” when you decide whether or not the property is worth the price you’ll pay for it.

The 1% Rule simply states that an income producing property must produce 1% of the price you pay for it every month. For example, if you’re looking at buying a property for $150,000, then the monthly rental income should be 150,000 x 1% = $1,500.

Get Houston Texas Property Management

As you grow your portfolio of rental properties you’re going to need an experienced Houston Texas Property Management company because a property manager will save you the time, money and hassle of managing those rentals yourself. Learn more about the services we can offer you by contact us today at (832) 971-1841 or click here to connect with us online.

 

New 1099 deadline change to impact businesses

Every year, tax season brings a variety of changes, from forms to regulations—and this year is no exception.

Beginning in 2017 (for the 2016 reporting year), many important deadlines will change. Filers will be required to send 1099-MISC recipient copies and submit the forms to the IRS by January 31, 2017, regardless of method (paper or e-file). This significant change to the deadline, which was previously February 28 for paper and March 31 for e-file, will undoubtedly dial up workloads and stress levels for companies.

To further complicate matters, the new filing deadline, as it relates to Form 1099-MISC, only impacts filers reporting non-employee compensation payments in Box 7. Although the overwhelming majority of 1099-MISC filers will report information in Box 7, there is bound to be some confusion.

As you are likely aware, many filers traditionally provide recipient copies first and wait for employees or vendors to review the forms prior to sending them to the IRS. This approach has allowed errors to be corrected and the fixed form to be filed to the federal government, along a new copy to the recipient, without creating a corrected 1099. The new reporting deadline all but eliminates this option, which we expect to result in more corrected forms being sent this year.

To avoid filing late and incurring penalties for noncompliance, it’s important to plan ahead for these new deadlines, form changes, and other deadlines. We also recommend reviewing the required data as soon as possible to allow extra time to edit errors or gather further information if needed. Click here to learn more!

Get Houston Texas Property Management Here

Do you need Houston Texas Property Management? If so, contact Vestpro Residential Services today by calling us at (832) 971-1841 or click here to connect with us online.

As long time property management professionals we can save you the time, money and hassle of managing your own rental properties especially when it comes to things like rent collection, maintenance, customer service and all of the other property management tasks that you might currently be doing yourself.

Let us show you the difference our services can offer you and how we can simplify your business so you can focus on growing your portfolio of rental properties in Houston, Humble, Kingwood and the surrounding area.

Are You Planning On Selling Your Houston Rental Before The End Of The Year?

Over the last five years many homeowners in Houston Texas have decided to rent their homes out rather than selling them, but times have changed, and now that home values have increased, homeowners who were previously underwater with their mortgages have equity again and may be planning on selling their Houston Rental Properties. 

Thanks to the IRS tax code we know that you can temporarily rent your primary residence without losing the all-important exclusion of capital gain but, this is also based on set five-year time limit.

About The Capital Gains Exclusion

During a 5 year period of time, you must have done the following:

  • Owned your home for 2 years.
  • Lived in your home, as your primary residence for two years.
  • Ownership must have been continuous during this period of time.

To successfully take advantage of the capital gains deduction your home must be ready for sale and should be priced correctly, sold then closed within a period of six months.

Although most homeowners want all capital gains to qualify for the exclusion, the reality is that some of the gains might not qualify if depreciation has occurred during the period of time that the home was rented, but the good news is that depreciation is recaptured at a tax rate of 25%.

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Timing Is Important

As with anything in life, timing is important, especially if your home is valued at $200,000 or more because it’s possible that you could have a tax liability up to $30,000 so like most people you will want to do everything possible to minimize or eliminate as many taxes as possible.

To learn more about taking advantage of the capital gains exclusion contact you tax professional today or to start the process of selling your Houston Rental before the end of the year click here.

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For professional property management for your Houston Texas Rental Property contact Vestpro Residential Services today by calling us at (832) 971-1841 or click here to connect with us online.

Should you buy rentals in Houston? Even if you’re out of the area?

Thanks to the booming real estate market in the last 12 months there are more condos, town homes and apartment buildings available for purchase and rent than ever before but the big question is should you buy rentals in Houston even if you’re out of the area? The answer to this question is yes!

Pros of Buying Long-Distance Real Estate

  • The ability to buy in more affordable markets. Property values in second- and third-tier markets don’t command the premium of real estate in primary markets and there’s lower competition. That said, depending on the market, rents can still be very strong. Buying in one of these markets is a way to get your foot in the door, realize positive cash flow and build equity.

  • Real estate as a long-term strategy. Some investors decide to buy real estate in an area that they don’t currently live in, but think they might want to someday. For instance, I’d consider buying a home closer to my parents if there’s a chance I’ll want to live closer to them someday. Many investors use a similar mindset when considering real estate in vacation and retirement markets, like the Carolinas and Florida. These houses can be rented now and held in case an investor wants to live there someday, too.

  • Tax benefits. Say what you want about Trump, but when the New York Times released a copy of his 1995 tax returns it shed light on a stark reality: real estate investors are able to use the tax code to their advantage. The ability to write off interest paid on a mortgage and depreciation makes buying investment property highly attractive. The provision Trump took advantage of is no different than the loopholes that everyday investors use, too.

Get Houston Texas Property Management Here!

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.

 

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1031 Exchange Tax Free Real Estate Investing

Are you planning on investing in another Houston Texas Rental Property but have to sell one of your rentals first before you can purchase the new property? If so, you should consider a 1031 exchange.

In this video you will learn more about how the 1031 exchange works and how to apply this to your business.

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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. 

Houston Texas Rents to Flatten in 2016

Humble Texas Renter

HOUSTON, TX. – After months of rent increases thanks to the booming economy many experts are predicting that rents will start to flatten out in 2016 and the rapid increases that we’ve seen over the last 12 months will soon become a thing of the past.

This is good news for the Houston Rental Market since the area has certainly been hit hard since the drop in oil prices but the question is will slower rental appreciation actually help renters since rents have been increasing faster than incomes over the last 24 months?

National median rent at the end of 2015 was $1,381, and is expected to increase slightly to $1,396 over the next 12 months.

The slowdown in rents means that, by the end of the year, they will be rising at a slower pace than incomes in many markets.

In December, home values rose 4 percent to a Zillow Home Value Index of $183,500.

Rent appreciation will level off over the next 12 months, slowing to an annual rate of 1.1 percent by December 2016, according to the new Zillow® Rent Forecasti. The national Zillow Rent Indexii at the end of 2016 is projected to be $1,396 — compared to $1,381 in December 2015.

Zillow is forecasting a decrease in the rate of rental appreciation amid a rental affordability crisis that has renters in some markets spending almost half of their income on rent.  Some of the fastest growing metros had double-digit annual rental appreciation at the end of 2015.

Zillow expects rental appreciation to slow down most significantly in Nashville, Tenn., San Francisco, Portland, Ore. and Denver. Rents in San Francisco saw 12.5 percent appreciation in 2015. Zillow forecasts rent in San Francisco will grow half as fast in 2016 — 5.9 percent.

Even with the slowdown, rents will remain unaffordable in many of the major markets across the U.S., especially on the West Coast. Renters in San Francisco and Los Angeles can expect to spend 40 percent of their income on a rental paymentiii.

“Hot markets are still going to be hot in 2016, but rents won’t rise as quickly as they have been,” said Zillow Chief Economist Dr. Svenja Gudell.

“The slowdown in rental appreciation will provide some relief for renters who’ve been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground: rents are still rising and renters are struggling to keep up.”

The slowdown in rental appreciation indicates that supply of new multi-family homes is catching up to demand. Substantial new housing supply is becoming available in Atlanta, Denver, Portland, Seattle, and other markets.

The Zillow Home Value Index rose 4 percent year-over-year in December 2015, to $183,500, according to the Zillow® December Real Estate Market Reports.

Source – rentalhousingjournal.com 

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For more information about the Houston Texas rental market or for Houston Texas Property Management contact Vestpro Residential Services today by calling us at (832) 498-0016 or CLICK HERE to connect with us online.