Thinking Of Buying Rental Property? Here Are Five Things You Should Know

Planning on investing in rental properties? If so, before investing in your first rental there are a variety of things you should consider which include the following:

First, on the tax front, not only are all your cash expenses – including broker fees and management fees – deductible for your federal taxes, so is the depreciation of your property. Calculated over 27.5 years on a straight-line basis, depreciation protects the first 3.6% of your annual return from taxes. With returns around 5 or 6 percent right now (2017), that’s a big deal. Calculation below.

Second, leverage. If you can borrow money at a lower interest rate than the return you otherwise get from the property, the return on the portion you provide is higher. Calculation below.

Third, what about rents? Do they swing like home prices? How much can you raise them? And what’s the right rent to be charging in the first place? Each property is different and so is each location, so it depends. You should go online and see what other landlords are asking for a similar property in the area. You can ask local brokers, but take their answer with a grain of salt – they’d rather get the commission at any rent rather than have you hold out for a higher one.

 You can and should raise your rent every year. Inflation eats into your real revenue if you don’t keep pace. Rents don’t swing like home prices can; they rarely go down and usually rise a bit faster than inflation. If the neighborhood around your property changes, you can see rents rise even faster – and sometimes fall. This is one of the opportunities you have and one of the risks you take.

Get Professional Property Management Here

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

What should you be looking for in a rental property?

Are you planning on investing in rental properties for the first time but you don’t what to look for in a rental property? If so, you’ve come to the right place!

In this article we will break down what you should look at before investing in a rental property.

 

  • Neighborhood: The quality of the neighborhood in which you buy will influence both the types of tenants you attract and how often you face vacancies. For example, if you buy in a neighborhood near a university, the chances are that your pool of potential tenants will be mainly made up of students and that you will face vacancies on a fairly regular basis (during summer, when students tend to return back home).

  • Property Taxes: Property taxes are not standard across the board and, as an investor planning to make money from rent, you want to be aware of how much you will be losing to taxes. High property taxes may not always be a bad thing if the neighborhood is an excellent place for long-term tenants, but the two do not necessarily go hand in hand. The town’s assessment office will have all the tax information on file or you can talk to homeowners within the community.

  • Schools: Your tenants may have or be planning to have children, so they will need a place near a decent school. When you have found a good property near a school, you will want to check the quality of the school as this can affect the value of your investment. If the school has a poor reputation, prices will reflect your property’s value poorly. Although you will be mostly concerned about the monthly cash flow, the overall value of your rental property comes in to play when you eventually sell it.

  • Crime: No one wants to live next door to a hot spot for criminal activity. Go to the police or the public library for accurate crime statistics for various neighborhoods, rather than asking the homeowner who is hoping to sell the house to you. Items to look for are vandalism rates, serious crimes, petty crimes and recent activity (growth or slow down). You might also want to ask about the frequency of police presence in your neighborhood.

  • Job Market: Locations with growing employment opportunities tend to attract more people – meaning more tenants. To find out how a particular area rates, go directly to the U.S. Bureau of Labor Statistics or to your local library. If you notice an announcement for a new major company moving to the area, you can rest assured that workers will flock to the area. However, this may cause house prices to react (either negatively or positively) depending on the corporation moving in. The fallback point here is that if you would like the new corporation in your backyard, your renters probably will too.

  • Amenities: Check the potential neighborhood for current or projected parks, malls, gyms, movie theaters, public transport hubs and all the other perks that attract renters. Cities, and sometimes even particular areas of a city, have loads of promotional literature that will give you an idea of where the best blend of public amenities and private property can be found.

  • Building Permits and Future Development: The municipal planning department will have information on all the new development that is coming or has been zoned into the area. If there are many new condos, business parks or malls going up in your area, it is probably a good growth area. However, watch out for new developments that could hurt the price of surrounding properties by, for example, causing the loss of an activity-friendly green space. The additional condos and/or new housing could also provide competition for your renters, so be aware of that possibility.

  • Number of Listings and Vacancies: If there is an unusually high number of listings for one particular neighborhood, this can either signal a seasonal cycle or a neighborhood that has “gone bad.” Make sure you figure out which it is before you buy in. You should also determine whether you can cover for any seasonal fluctuations in vacancies. Similar to listings, the vacancy rates will give you an idea of how successful you will be at attracting tenants. High vacancy rates force landlords to lower rents in order to snap up tenants. Low vacancy rates allow landlords to raise rental rates.

  • Rents: Rental income will be the bread and butter of your rental property, so you need to know what the average rent in the area is. If charging the average rent is not going to be enough to cover your mortgage payment, taxes and other expenses, then you have to keep looking. Be sure to research the area well enough to gauge where the area will be headed in the next five years. If you can afford the area now, but major improvements are in store and property taxes are expected to increase, then what could be affordable now may mean bankruptcy later.

  • Natural Disasters: Insurance is another expense that you will have to subtract from your returns, so it is good to know just how much you will need to carry. If an area is prone to earthquakes or flooding, paying for the extra insurance can eat away at your rental income.

Get Property Management Here

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

 

 

 

Planning for retirement? Why not buy an investment property?

Is your retirement around the corner and you’re searching for income producing investments to add to your portfolio? If so, why not add rental properties to your portfolio?

There’s never been a better time than right now to invest in Real Estate especially since more people continue to move to Texas every day and as an investor you will be able to capitalize on the demand for rental properties by investing in Real Estate.

Tips For Investing In Rental Properties

Gather as much information as you can. Talk to other investors, mortgage brokers andreal estate agents who have worked with income property about what owning a rental property is really like, in addition to reading books and articles on the topic. “It’s all about obtaining knowledge,” Rodriguez says.

Decide if you’re ready to be a landlord. Buying and managing property yourself provides the greatest return but also the greatest headaches. “Do you have the stomach for being a landlord?” Fleming says. “Stuff’s going to happen that just really ticks you off.” Other, less active options include becoming a partner in a limited liability company that owns properties or buying into a real estate investment trust.

Crunch the numbers carefully. A rental property is only a worthwhile investment if it makes money. Yes, the property may rise in value and yield a profit when you sell, but it also may lose value depending on which way the market goes. “If you’re banking on just appreciation, it’s really hit or miss,” Alexy says.

Make sure you have enough cash. Getting rich on real estate with no money down is a great dream, but it’s almost impossible to accomplish. Expect to need a sizeable down payment, reserves to pay for repairs and maintenance and a good income before you start investing.

Property Management Makes Owning Rental Properties SIMPLE

Before managing your rental properties yourself, learn more about how affordable property management is by calling Vestpro Residential Services at (832) 498-0016 or click here to connect with us online.

 

DIY Property Management Is HARD! Make it easy by calling Vestpro 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.

 

How Much Money Should You Charge For Rent?

By Vestpro Residential Services

HOUSTON – As longtime Houston Texas property managers, one of the most common questions that we’ve seen every single owner have after they’ve purchased a rental property in the Houston area, or elsewhere across the United States is: what should I rent my property for?

The answer to this question depends on who you ask but, thankfully determining the right amount to rent for your Houston Texas rental property is a lot easier than you think especially if you follow these simple steps.

#1 – What Does Your Houston Texas Rental Property Offer?

The first thing that you need to do when determining what to charge for rent is to think about all of the features and amenities that your Houston Texas rental property has to offer a typical renter.

Some of the features and amenities that your rental property might offer a typical renter could include:

  1. Your rental is located in a quiet neighborhood.
  2. It’s close to the University.
  3. Offers more storage space because it has a garage, attic or basement.
  4. It’s located near the best restaurants, bars, shops or stores.
  5. Your rental property is close to public transportation like: trains and buses.
  6. Your Houston Texas rental property is located in a walkable neighborhood, meaning that anything that a typical renter could want is within easy walking distance.

#2 – What Is The “Ballpark” Rent In Houston Right Now?

Depending on when you’re reading this article, that Houston Texas rental market could either have gone way up, or it’s gone down, depending upon economic conditions, job gains or losses and the state of the global economy.

This is why it’s important to establish a ballpark rent for the Houston Texas rental market right now that includes the average high rent, and average low rent for single-family homes, condos and townhomes in the Houston area.

Now you’re probably asking “how in the world am I going to determine the ballpark rents for an average Houston Texas rental right now?” I’m not a property manager. The answer to this question is a lot easier than you thought, to determine the average ballpark rent for a property in Houston right now just go online and visit websites like Zillow or rent jungle.

What’s great about websites like Zillow is that they offer you plenty of historical data and also accurate information regarding the rental market so you know what your property may have rented for in the past and what it should be renting for right now because the goal is to always rent your property for what it’s worth right now.

#3 – What Do Comparable Properties Have To Offer?

Last of all, but most important, think like a renter and take at least one day to visit comparable rental properties in the area and find out what those properties offer.

Do they offer the same bedrooms, bathrooms and square footage that your property offers? Do they have plenty of amenities like a hot tub, on-site fitness center, dog run or laundry area?

After taking the time to come up with a ballpark rent for Houston Texas rental properties, analyzing all the features and benefits that your rental property has to offer and visiting comparable properties in the area you should have more than enough information at your fingertips to come up with an accurate rent to charge for your Houston Texas rental property.

Get Houston Texas Property Management

To save time and money with renting your Houston Texans rental property yourself, contact the team of property management experts at Vestpro Residential Services today by clicking here to contact us online or by calling us at (832) 498-0016.

Is Buying Too Many Houston Texas Rental Properties A Bad Thing?

By Vestpro Residential Services, LLC

Thanks to historically low mortgage interest rates you may be buying Houston Texas Rental Properties at a fast rate but, is it a bad thing to buy too many rental properties?

The answer to this question is yes, if you don’t have Houston Texas Property Management. Here’s why:

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.

Maintenance

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.

Get Houston Texas Property Management

To learn more about how Houston Texas Property Management will make your life easier contact Vestpro Residential Services today by calling us at (832) 498-0016 or click here to contact us online.

7 Simple Curb Appeal Ideas for Your Home’s Exterior

Here are a few curb appeal ideas to improve your home’s exterior including hiding features, sprucing up windows and additions to your porch. Read more about curb appeal.

Contact Us

For more information on how to improve curb appeal for your home, or to learn more about our property management services contact Vestpro Residential Services today by calling us at (832) 498-0016 or CLICK HERE to connect with us through our website.

CoreLogic Chief Economist Perspective- July 2015

A vibrant rental market has been an outgrowth of the Great Recession and housing market crash. Apartment vacancy rates are down to their lowest levels since the 1980’s, rental apartment construction is the most robust in more than 25 years, rents are up, and apartment building values are at or above their prior peaks. But the rental market is more than just apartments in high-rise buildings.

Apartments in buildings with five or more residences account for 42 percent of the U.S. rental stock. Additionally, two- to four-family housing units comprise an additional 18 percent of the rental stock, and one-family homes make up the remaining 40 percent.1

The foreclosure crisis resulted in a large number of homes being acquired by investors and turned into rentals. Between 2006 and 2013, three million single-family detached houses were added to the nation’s rental stock, an increase of 32 percent. The increase in the single-family rental stock has been geographically broad based, but has impacted some markets more than others.

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To get a property management quote for your rental property in Houston or the surrounding area contact us today by CLICKING HERE to schedule an appointment online or by calling (832) 498-0016.

4 Tip for New Houston Texas Real Estate Investors

Houston Home For Rent

By Vestpro Residential Services

Are you thinking about investing in Houston Texas Real Estate?

Now is a great time to invest in Houston Real Estate thanks to high demand for homes and excellent mortgage interest rates.

Before you start searching for rental properties make sure you follow these 4 tips for new Houston Texas Real Estate investors because, these tips can save you the time, money and traditional learning curve which every investor has to go through when they are just getting started with buying Real Estate.

#1 – Write a Business Plan

As with any business you may have started in the past it’s important to remember that investing in Real Estate is a business and you must have a plan for the 1 to 5 years of your business.

#2 – Pull Your Credit Report

Before applying for a loan to buy your first rental property you should pull your credit report and make sure that you have credit score of 700 or higher because, a high credit score will enable you to get the best mortgage loan possible.

#3 – Pay down Your Debt-To-Income Ratio

One of the biggest things which will make your life easier when getting started with Houston Real Estate investing is paying down your debt-to-income ratio and you will be able to do this by paying off your credit cards, auto loan and other debts.

A lower debt-to-income ratio will not only mean you will have fewer debts to pay each month but this will also make it easier for you to qualify for a great mortgage loan as well.

#4 – Connect With a Great Mortgage Lender or Broker

Another important element to buying a great rental property is hiring the right mortgage lender or broker.

You want to get the best mortgage interest rate possible and connecting with multiple brokers or lenders is a great way to get an awesome mortgage interest rate.

Get Started With Houston Real Estate

To get started with buying Houston Real Estate contact us today by calling (832) 498-0016 or CLICK HERE to connect with us online.

How to Find A-Rated Tenants for Your Houston Texas Rental Properties

Houston Texas Rental Properties

By Vetpro Residential Services

HOUSTON – One of the “secrets to success” with owning Houston Rental Properties is finding A-Rated tenants, or the perfect renter for your rental property.

In this article we will share with you simple tips you can use to easily find A-Rated tenants for your Houston Texas Rental Properties.

Go Through These Tenant Checks

When renting one of your Houston Texas Rental Properties to your tenants make sure you take the time to do the following checks with your prospective tenants:

  • Background check – Look deep into their background and confirm that the tenant doesn’t have any felonies.
  • Reference check – Don’t be afraid to ask tough questions about the prospective tenant’s behavior or habits including drugs, alcohol or tobacco.
  • Credit check – They should have a FICO score of at least 685 and or a credit score of 700.
  • Work reference check – Confirm that they really are working at the reference on their application.
  • Income qualification – Make sure they earn 2.5 times the rent.

Failing to do one or all of these checks can easily cost you money because it’s easy to “go with your gut feeling” about a prospective tenant when they might have something to hide and write wrong information on their rental application.

Market Your Property in the Right Venues

When marketing your Houston Texas Rental Properties make sure you market your properties online in the following venues which include:

Rentals.com

Zillow or Trulia

Realrentals.com

AHRN.com – Use for finding military families.

Har.com

Hotpads.com

Save Time and Money Marketing Your Houston Rental Properties

For more information on how to find A-Rated Tenants, or to market your Houston Rental Properties, contact Vestpro Residential Services by calling (832) 498-0016.