August – Find ways to keep updated with the changes in laws and regulations
You are on the path of learning what you can to achieve personal and professional growth, now it is time to make sure you stay up to date with the changes in laws and regulations, both federally and locally.
The 2 most important sources of information in Texas to always keep in mind are:
- Texas Real Estate Commission (TREC) – Since 1949, TREC has been in charge of safeguarding the consumer rights in matters of real estate transactions.
- National Association of Realtors – The NAR is America’s largest trade association. It is constantly updating its site with the latest news and events for the real estate industry.
Some other great practices are:
Subscribe to blogs and newsletters
Thanks to the internet, you can have access to thousands of resources to stay up to date with a few clicks. Research and find a real estate blog or newsletter that interests you and subscribe to it so you can have all the information you want come directly to your email on a daily, weekly or monthly basis.
Frontline Property Management has both and we aim to provide information that is useful and up to date to help our investors in any way we can! You can see all our blog posts here and our newsletters here.
Make connections with realtors
A great way to make sure you are aware of all the changes made to real estate laws is to keep in touch with a seasoned realtor in your area and in the area you want to invest in.
Realtors are more likely to know, sometimes even beforehand, the changes policymakers are making to real estate laws, so it is always a good idea to network and establish connections with trusted professionals.
Remember that knowledge is power! And keeping up with the industry can help you make the best out of your investments.
Do you need help with a property? We can help!
February – Create a Strong Team
After you have networked like a pro, it’s very important to surround yourself and solidify your relationship with the people you feel give the most value to you and who will help you reach your goals.
Building a good team should be about finding people with complementary skills to yours that can complete tasks needed to achieve success. Follow these tips to build the perfect team for your business:
Start thinking like a leader
Remember no one can lead your team better than yourself, because no one knows where you want the team to be. So step up and take command. Communicate clearly what you need and keep an open mind.
Practice emotional intelligence
Have patience and remember your team members are complex human beings whose personalities and work styles are completely different. Try to understand them and see these differences as assets.
Create a respectful environment
One of the most important factors in a good team is respect, not just to you as the leader, but to and between every member of the team. In a respectful environment great ideas can flourish and grow into something amazing.
Know every part of your operation to pick the perfect person
Imagine how the perfect person for each role is and find someone who fits that idea. Let them know clearly what you expect from them and have a clear idea about how everything should work and how you can get it to do so.
Take care of even the smallest of details
The devil is in the details. Make sure every member of the team is as detail-oriented as possible to ensure that all parts of the operation are perfectly covered and that the needs and goals are being achieved.
Establish achievable and clear goals
Make sure everyone knows what you need them to do and when you want them to do it. Establishing what you expect from every person is a great way to make sure your team can grow into their own and accomplish everything they have to.
Calendarise meetings to keep everything in check
According to your necessities, keep weekly or monthly meetings calendarised so everyone knows the deadlines they have and what needs to be done by them.
Being really organised will also help your team have clear goals and being more organised themselves.
Celebrate the little and big successes
Encouragement is very necessary for the success of a team. Make sure to celebrate appropriately when someone does something good.
Positive reinforcement goes a long way and can do more than you expect.
Do you need help with a property? We can help!
Winterizing Tips for Landlords – 1/17/2022
Over the years Texas weather has become the brunt of many jokes!
From the severe heat during the summer months to the volatility of the fall and winter, our weather is quite nonsensical and, while this lends quite a bit of humor to our lives, it can make planning quite difficult.
Here are some quick tips for winter preparation!
Prepare your tenant by sending out instructions regarding their winterizing responsibilities.
Preparing your rental property for Winter should be a joint effort between you and your tenant.
You should be sending out seasonal letters with instructions on steps the tenant should take to prepare themselves and the property that they occupy for the season.
Some good information to include in your winter tenant letter:
- Covering outdoor faucets to prevent freezing.
- Maintain a minimum temperature of 55 degrees Fahrenheit when they go on vacation. This will prevent the pipes from freezing and bursting due to the cold temperatures.
- Remind them to test all smoke alarms and carbon monoxide detectors and replace the batteries (unless this is a landlord responsibility in the lease agreement).
- Add any emergency contact information in the event of a maintenance emergency.
However, the onus is not entirely on your tenant (especially if you experience a vacancy during the winter months!) to maintain and prepare the property.
Do your part to keep the property safe and protect your investment.
Your tenant may have responsibilities in regards to protecting the property, but the investor has many responsibilities as well. A few of things you will want to consider are:
- Weather-proof the exterior of your property: Your home’s exterior takes the hardest beating during winter. Check the outside of your rental and make any necessary preparations for the season. You may need to seal around windows, put concrete in the cracks of your hardscaping, and check the roof for damaged shingles or potential places where ice dams might occur.
- Trim Trees and Shrubs: In the winter, ice can accumulate on dead branches and cause them to come down. This can result in damage to your roof, broken windows, and scared tenants.
- Clean the gutters: If gutters are filled with leaves and debris, snow and ice can build up, causing damages to the roof and eaves, and eventually harming walls and ceilings.
- Check chimney flues: In units with working fireplaces, it’s important to have an annual inspection by a qualified professional. Creosote buildup can cause fires.
With winter upon us, you will need to ensure your property is ready. This will mean coordinating multiple vendors, admittance to the property, and updating/educating your tenant on their duties. You will certainly have your work cut out for you!
Would you prefer to have a professional take care of your property and help you tackle the many duties of caring for your investments? Contact us today and we will tell you how we can help!
Do you have a property you need help with? Contact us today!
Some Must Reads for Real Estate Investors: Single-Family Edition
Real Estate investing can be a daunting industry to break into! Between determining how to obtain financing, picking a property, and figuring out how to get the best ROI (return on investment) there is so much to know and learn that it can be overwhelming to the point of discouragement. One of the best ways to learn about real estate investing is to read books written by investors and other experts.
Below is a list of some of the most popular books among single-family real estate investors.
One Rental At A Time
Have you ever thought about real estate investing as a path to financial freedom? Have you kicked around the idea but felt you were too busy with work and family responsibilities? If so, One Rental at a Time will transform your life, just as it has transformed the lives of thousands of others.
This book reveals how buying and holding rental properties will create a second income that can, in time, allow you to quit your day job. It worked for me and it can work for you too. What’s stopping you? Read the book and learn how One Rental at a Time can lead to financial independence.
Best of the BRRR Method: Buy, Rehab, Rent, Refinance, Repeat
“Buy, Rehab, Rent, Refinance, Repeat,” or the BRRRR method, was developed by real estate investor David Greene. This 2019 book details each step of his process, including how to start or scale your real estate portfolio, from managing single-family properties to 100-plus unit apartment complexes. This comprehensive guide to house flipping also features a thorough explanation of terms, methodologies, and examples. Greene is the co-host of the BiggerPockets podcast and has been featured on HGTV.
How to Invest in Real Estate: The Ultimate Beginner's Guide to Getting Started
Everyone knows real estate investing can be a powerful way to build wealth and achieve true financial freedom. But, because each person’s journey is different, knowing the first steps to take can be challenging.
That’s why two of the biggest names in the real estate world teamed up to write the most comprehensive manual ever written on getting started in the lucrative business of real estate investing. Josh Dorkin and Brandon Turner—longtime hosts of the world’s #1 real estate podcast, The BiggerPockets Podcast—give you an insider’s look at the many different niches and strategies that exist. Find which one works best for you, your resources, and your goals.
Unlike most traditional real estate books, this one won’t tell you there is “one secret path” to real estate success. Instead, it dives into dozens of unique, life-changing quests and is packed with more than forty real-life stories of how real estate investors are finding success in today’s economy.
The Advanced Guide to Real Estate Investing: How to Identify the Hottest Markets and Secure the Best Deals (Rich Dad's Advisors)
If you’re interested in real estate investing, you may have noticed the lack of coverage it gets in mainstream financial media, while stocks, bonds, and mutual funds are consistently touted as the safest and most profitable ways to invest. According to real estate guru Ken McElroy, that’s because financial publications, TV and radio programs make the bulk of their money from advertising paid for by the very companies who provide such mainstream financial services.
On the other hand, real estate investment is something you can do on your own–without a large amount of money up front. Picking up where he left off in the bestselling ABC’s of Real Estate Investing, McElroy reveals the next essential lessons and information that no serious investor can afford to miss.
Building Wealth One House at a Time, Updated and Expanded, Second Edition
Building Wealth One House at a Time, 2nd Edition provides you with a practical way to create wealth through an ethical approach of buying, financing, and managing property. Renowned real estate expert John W. Schaub takes you through his 9-step program and explains how to accumulate one million dollars’ worth of houses debt free in any market, while earning a steady cash flow.
This invaluable guide presents fresh strategies for buying and financing property, reflected in six new chapters on topics such as real estate cycles, financing real estate purchases, negotiation techniques, and retirement investing.
You’ll learn how to:
- Finance real estate purchases without going to a bank
- Recognize and capitalize on real estate cycles
- Improve your negotiation skills in any situation
- Avoid common and costly mistakes
- Create cash flow that lasts forever, and much more.
Have a multifamily property that you need help with? Contact us today!
What Should be Included in a Residential Lease: The Basics
When leasing a residential property it is important to ensure that both you and the tenant know exactly what is expected from you and what to expect from the other party.
While some oral leases can be legally binding, a diligent landlord will stick to the more traditional written format. This not only helps to protect both parties, but also makes it much easier to recall what exactly was agreed upon later down the road when questions may arise.
But what items should be addressed in the lease? Some of the most basic items to include are:
The Commencement and Expiration Dates:
One of the most important items to include in a written lease is the commencement and expiration date. This allows both parties to prepare themselves and the property for the move in date while also preventing either party from ending the occupancy earlier than expected. If either party attempts to end the occupancy prior to the expiration date stated in the lease that party could be held responsible for the damage caused to the other party (depending on the other lease terms).
The Rental Rate & Due Date:
Another major point to ensure is included is the expected rental rate and due date. This sets financial expectations for both landlord and tenant and allows each party to budget accordingly.
When determining the desired due date keep in mind that, to say compliant with the Texas Property Code, you can not start charging late fees until the rent has remained unpaid for two full days after the original due date.
Late Fees:
Even though the expectation on timely payment will be set by providing a due date it is best to include details on what will happen if that due date is not met.
Providing late fees amounts ahead of time can be an excellent deterrent for late payments. If the tenant knows that they will incur extra cost by paying late they will be more likely to ensure that the payment is received on time.
Keep in mind that, if you fail to put late charges in the lease, you will not be able to charge them to the tenant if they fail to pay timely.
Sec. 92.019. LATE PAYMENT OF RENT; FEES
Security Deposits:
In addition to the rental rate and late fees, another fee that should be included in the residential lease is the security deposit. A security deposit helps protect the landlord from incurring the cost of tenant caused damage and helps deter the tenant, who hopes to receive all of the deposit back at the end of their occupancy, from causing any damage above and beyond normal wear and tear.
Sec. 92.104. RETENTION OF SECURITY DEPOSIT; ACCOUNTING.
While these basic terms should be included in every lease there is much more to be considered when signing a lease with a tenant.
One (out of many) reason to hire a professional property management company is that each company will have a lease that has been typed by a legal professional. Frontline Property Management, Inc., for example, uses the Texas Association of Realtors (TAR) Residential Lease, which is only available to Realtors and is written by TAR lawyers.
Do you have a property you need help with? Just fill out this form and we will reach out to you.
Over the years Texas weather has become the brunt of many jokes!
From the severe heat during the summer months to the volatility of the fall and winter, our weather is quite nonsensical and, while this lends quite a bit of humor to our lives, it can make planning quite difficult.
Preparing your rental property for Fall should be a joint effort between you and your tenant.
You should be sending out seasonal letters with instructions on steps the tenant should take to prepare themselves and the property that they occupy for the season.
However, the onus is not entirely on your tenant to maintain and prepare the property. Make sure you are doing your part to keep the property safe and protect your investment.
One of the most important preparations is to ensure that your HVAC or heating system has been maintained and serviced. Heating is simply a necessity and in the eyes of the legal system, it is a requirement for the health and safety of tenants. Having the heating system checked out yearly before cooler or cold weather hits could avoid bigger maintenance problems and making necessary repairs can prolong the life of the heating system.
Here are some quick tips for fall preparation!
Exterior Preparation
- Check siding to ensure that it is stable and secure
- Have the roof checked for weak spots
- Insulate doors and windows
- Search the property for areas that may need to be caulked to improve heating efficiency
- Cut back any overgrow vegetation (especially if it is hanging over any part of the property)
- Clean out the gutters before fall leaves have had the chance to settle in. (Bonus Tip! placing a gutter guard into the shaft will make future cleanings much easier!)
Interior Preparation
- Have the chimney swept to remove any blockages
- Check all carbon monoxide and smoke detectors
- Ensure the weather stripping on exterior doors and windows are functional
- Check your attic insulation for gaps
As the first days of fall approach, you will need to ensure your property is ready. This will mean coordinating multiple vendors, admittance to the property, and updating/educating your tenant on their duties. You will certainly have your work cut out for you!
Interested in letting a professional take care of these tasks for you? Contact Frontline Property Management today! We have the experience to handle your investments through any season, and protect your frontline to protect your bottom line!
Have a property that you need help with? Just fill out this form and we will reach out to see how we can help!
5 Pieces of Tips and Advice for Investing in Rental Property
Written By: Andrea Erickson
Rental properties are a hot topic again since the real estate market is a madhouse currently, and many people are trying to figure out how to cash in on this. Although you can’t go back in time and buy properties when they were far cheaper: you can get the most income possible out of the currently available properties.
Here is some important information you should keep in mind when looking at which properties to invest in.
Consider if There’s Extra Land to Develop
When buying land, look beyond the current buildings that are sitting on it. Although things are far easier if you can rent out already finished units: there’s always room for more. While still maintaining common spaces, room for parking, and the apartments themselves, consider if there’s enough room on the property or neighboring property to expand the apartments further. The more units, the higher return, and the faster the property gets paid off so that it’s nothing but income.
Use Software to Manage Everything
Although it might seem obvious, many first-time renovators don’t realize how much goes into owning a rental complex: the more units, the more problems. Good software will let you track when an apartment was last renovated, how many issues a renter has caused, and who’s paid on time or not. Seek out landlord maintenance software that will help you track this information.
A worthwhile software should also notify you when a renter’s lease is closing soon, take care of maintenance, and be easy to use. If a property management app doesn’t have what you need, it’s never too late to switch to a new one.
Ensure the Property is Appealing
Aesthetics matter to everyone. Even though sometimes people will overlook an unattractive property if it means the costs are low enough: you don’t want your property to be like this. The lower the rent, the lower the profit. When purchasing a property, ensure that you pick one that people will want to move into.
The top things that build appeal are:
- Natural areas with trees and grass.
- Beautiful, clean, and fresh-looking exteriors.
- Amenities like pools and tennis courts are visibly well maintained.
- Gorgeous skylines if within a city.
- Attention to detail in everything from a well-maintained sidewalk to the apartment number signs.
The attractiveness can always be built upon by creating areas with natural beauty, like portions of land with trees and grass, or updating the interiors with the best flooring for rental properties.
Look Into the Current Rental History
If the property you’re looking at has already operated as an apartment complex or a rental property in general, what’s its history look like? How long have other land buyers overlooked this property? Ask the current owners how much they get on average for rent and if the current renters are responsible and pay on time.
Changing management doesn’t mean that the renters will necessarily have to leave, depending on the terms of their lease, so it’s a good idea to get to know the type of people who live in the area. If the complex seems to have a lot of eviction notices, or it’s in a place where the cost of rent wouldn’t be sustainable for the average wages of the area, this might not be a great property.
Don't Assume Any Project Could Be Considered Small
Looking at rental units to purchase, it can be tempting to view them the same way we view homes when we are buying them. A fresh coat of paint here, composite slate on the roof there, it might seem simple: but apartment complexes will quickly become expensive. Unfortunately, there’s no way to avoid these costs if they’re necessary, so when you’re shopping around, consider which projects you’d be willing to do for every single unit that you’ll be renting out.
It might not be a big deal to remodel the bathroom of a home, but remodeling the bathrooms of an apartment complex will eat up a lot of time and resources. Avoid this; take the time to make sure the property you purchase is the best fit possible. If you do need to do extensive updates, budget to ensure there’s room for that in your time and financial budget. Don’t leap into a project without knowing the full story.
Rental Properties Are Passive Income Gold
Whether you’re purchasing several apartment complexes or a single-family property, rental properties have the potential to divert thousands upon thousands of dollars to your bank account.
To build upon these properties, it’s good to update each space within the room by room when people move out. This will allow for a more gradual transition to a completely updated property while still ensuring that most units are in use or are more quickly available.
Andrea Erickson is a contributor to Innovative Building Materials. She is a blogger and content writer for the real estate industry. Andrea is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that increase property value, maximize energy savings, and turn houses into homes.
Have a rental property that you need help with? Just fill out this form and we will reach out to you!
Determining Qualifying Criteria
Before detailing how to determine which criteria you will use for your applications, first be aware that you are legally required to inform your applicants of what they are. Making this information part of your application ensures that the applicant both has the opportunity to review the criteria and signs the document attesting as much. There are legal ramifications if this signature is not captured, as the presumption is by default that the information was not provided for review.
Details about the following criteria should be provided:
Criminal History
Specify which kinds of convictions and adjudications will disqualify an applicant. Establishing a clear timeframe will also better inform an applicant with a criminal background as to whether or not you will consider prior convictions from three, five, or twenty years or more in the past. Check out our previous post that discusses the criminal background check! Understand that requiring an entirely spotless criminal record is considered a violation of the Federal Fair Housing Act. Otherwise, having a substantive reason for disqualifying based on certain other convictions and adjudications (namely violence, sexual offenses, and drug manufacturing and distribution) is reasonable.
Previous Rental History
You won’t be relying solely on the information provided to you by the applicant. Using a third party (or several) to verify rental history will help you to establish the kind of renters the applicants are. By having the applicant sign a release form, you will be able to inquire as to whether their rent was paid on time, whether or not any lease violations were documented, if there were any pets with the applicant, and what condition the property was left in. You are entrusting your property to your future tenant, and you want to know that it is in good hands!
Current Income
The standard household income requirement is a gross total of three times the monthly rent. This comes from section 8 of the Housing Act of 1937 which in 1981 was amended to state that a tenant must pay at least 30% of their monthly income towards housing. Between the rising cost of living and wage stagnancy, some renters in large cities are spending up to two-thirds of their income on housing. According to the 2020 Joint Center for Housing Studies of Harvard University, one in four renters pays more than 50% of their income on rent. If this trend continues, you could expect (due to supply / demand) that income requirements will be reduced to asking that the total monthly household income is only twice the amount of rent. However, three times the monthly rent currently prevails as the industry standard and a change to that threshold is not on the horizon.
Credit History
Many landlords have a flat credit score threshold for their applicants, while others prefer a context-based approach. Credit scores as we know them today began in 1989. As a landlord, you will most likely use credit reporting to screen your applicant for unpaid debts and other financial burdens that exist outside of their monthly income. While you may decide not to rely on the score itself, you will need to review the report for information that will be pertinent to you as a property owner such as unpaid utility bills, evictions filed against your applicant, and bankruptcies. The leading cause of bankruptcies in America is medical debt, with two-thirds of all bankruptcies filed due to the high cost of healthcare. Being informed of where exactly your applicants stand financially will help you make the best decision in your process.
Failure to provide accurate or complete information on the application form.
As previously discussed, online applications open the door to increased fraudulent activity. If at any point in the process you determine that documents, contacts, or any other information is fraudulent, you can deny based on this alone. If you can’t count on an application being accurate, then you can’t use it to qualify a tenant!
Keep in mind (as always!) that these qualifying criteria standards must fall within the guidelines of the Fair Housing Act. Meaning also that they must be applied to every applicant, every time, no matter what! Standardization not only makes for effective processing, it also protects you in the event that an applicant assumes that they have been unfairly disqualified for your property.
Adding another buffer between you and the applicants is also recommended! You can do this by hiring a qualified and experienced Property Manager who will screen applicants on your behalf. Frontline Property Management has a team of Property Managers as well as a department dedicated to processing applications. Our Tenant Coordinators work every day to handle incoming applications and find you the best tenant for your property!
Contact us today to learn more about how Frontline Property Management manages thousands of doors in Dallas / Fort Worth and surrounding area, and how you can turn your property into truly passive income!
Do you have a property that you need help with? Just fill out this form and we will reach out to you!
Speed vs Accuracy: Efficiently Finding Quality Tenants
The Dallas-Fort Worth rental market is one of many (and one of the most) competitive rental markets in the nation. Due to the upward-trending boom in Millennial and Gen Z populations, as well as the unexpected conditions of the pandemic and the Texas freeze – there is a crunch for renters applying to properties. You may have felt the crush of applications and with it, the anxiety of meeting such an increased demand. While it is better to have more options rather than fewer when it comes to applicants, as paperwork piles up you may find yourself rushing to approve someone for the sake of having it done.
Not so fast.
You want to find a tenant who meets the standards you hold for the property. While you are not holding out for the best possible tenant in existence, you do want a tenant who absolutely qualifies. With the increase in document fraud and online scams, reviewing your potential tenants with a fine-tooth comb is necessary. But how are you able to do so when you have multiple applications on one property? When you are processing them all yourself while also receiving calls and emails and texts from agents, interested parties and applicants following up on their applications? Here are tips on how to be efficient, effective and most importantly, accurate in reviewing your applications:
Use an Application Portal
In a competitive market, applicants have zero time to waste. As properties are being snapped up, they need to be able to apply as quickly as possible. That means not having to trek to your office to pick up an application.
An application portal guides applicants through the process intuitively. Portals that require a registration will help you better track your applications to easily parse the completed apps from those in progress.
State Qualifying Criteria Up Front
It is your legal obligation to require that every applicant review the qualifications for the property that you manage. This includes the income requirement, your policy on the credit history and criminal background check, pet policies (including breed restrictions) – absolutely everything that needs to be considered before submitting an application. Eliminating the most obviously disqualified applicants before they apply is sure to lighten your workload and save both you and the applicant some disappointment.
Charge an Application Fee
If you want everyone to participate in a program, you make it free. When you want to restrict participation to interested parties who can pay, you charge an admission fee. It’s also true of applications. Processing applications costs time, and running screenings for applications costs money, which justifies charging an application fee.
You may, however, consider a reasonable compromise for your applicants: If you don’t process their application, don’t process their payment. If you have spent no time on an application and did not run a screening, then the applicant paid only for the privilege of being on a waiting list. This can leave a bad impression with applicants who would otherwise try to rent with you at a later time, or if your accepted tenant falls through. Renting housing is a business, which means that customer service is something to consider. You are not legally required to refund application fees at all in Texas, as application fees are considered nonrefundable so long as the law is followed.
Process Applications on a First-Come, First Served Basis
Utilizing an application portal makes it easier to pin down when exactly an application is submitted. Prioritizing applications on a first-come, first served basis is the easiest way to stay compliant with the Fair Housing laws, eliminating the opportunity for any bias to come into play when reviewing multiple applications. You simply take whoever is first, and work that application.
There is a big however – just because an application is submitted first does not mean that the application will remain in first place. When reviewing multiple applications, if your first application is missing documents or information, move on to the next completed application in line while they get back to you. An application can fall from first place to second in line, and so on and so forth as more applications provide everything that is required. Keep the lines of communication open so that your applicant can have the opportunity to provide the materials, but by no means should you lose out on the next potential applicant waiting on the first. Remember, these applicants are moving very quickly in this market, so while you may have multiple applications, don’t mistake any as a guarantee. Many applicants are inquiring into several different properties at once. There is simply no time to waste. Communicate quickly about missing information and move on.
Once you have the broad strokes of receiving applications down, you’ll find it easier to work through your application list in an orderly, systematic manner. Creating a Standard Operating Procedure in this way will help you be consistent and organized in the face of waves of applications. Knowing when to move on, who is immediately disqualified, and where to narrow your focus will help you find the right tenant in the right time.
If this sounds like a job in and of itself – you’re right! Frontline Property Management has a department that is dedicated to processing applications for our clients! Our Tenant Coordinators work daily to communicate with potential tenants, review documentation, run screening reports and comb through the details so that our Property Managers have all the facts when reviewing the results.
Contact us today if you’d like to leave the application process to the professionals and start enjoying your investment as a truly passive income!
Have a property that you need help with? Just fill out this form and we will reach out to you!
