Being a landlord seems like a pretty sweet gig. You own a property. You find a tenant willing to rent it from you. You collect monthly income from them, cover the expenses, deal with a few repairs now and then, and enjoy ongoing profitability without much ongoing effort.
Of course, we all realize there’s much more to being a landlord than this. The Houston, Texas area is an especially lucrative and attractive area for rental properties, but it’s still full of challenges and obstacles for newcomers to real estate investing.
Do you have what it takes to practice Houston property management? And what exactly does this strategy require?
Finding the Right Houston, Texas Property
One of the most important responsibilities of a real estate investor is finding the right property. Even in an area like Houston, with its dense population, ongoing demand, and position for future growth, some properties offer much more potential as rentals than others. In fact, if you’re not careful, you could actively lose money on your rental property.
Being successful in this area means choosing the right investment properties, while simultaneously avoiding the wrong ones. There are dozens of little variables to consider here, including things like property tax rates and your long-term vision for the property, but these are some of the most important to recognize:
- Property condition. The condition and nature of the property is going to play a major role in whether the property is attractive to tenants and how expensive the property is to maintain. The newer the property is, and the better the quality of the build is, the fewer issues you’re going to have and the more tenants you’re going to attract. That said, it’s worth considering properties in inferior condition, as long as the price reflects that; overpaying can be a problem as big as choosing the wrong property.
- Neighborhood dynamics and future. You’ll also need to consider the dynamics of the neighborhood and the trajectory this neighborhood is on. What are the crime rates like? How clean and beautiful is the area? What is the quality of the local school district? Are jobs readily available here? Do the people here have access to transportation and amenities? And are all these factors likely to improve in the future?
- Comparable properties in the area. Finally, take a look at comparable properties in the area. How much are they being sold for? How many of them are occupied by tenants? What are those tenants paying in monthly rent? This is often your best indication of how your target property could perform.
It’s much easier to find the right property if you’re working with a real estate agent who knows Houston.
After finding a property, you’ll have many responsibilities to handle as a landlord.
- Fixing and presenting the property. If you want to attract tenants to your property, you’re going to have to fix it up and present it well. That usually means making major repairs, making periodic upgrades, and applying superficial touches like freshening up the paint every time you need to find a new tenant.
- Marketing the property. You’ll also be responsible for marketing the property, or else people won’t be able to find and rent it. Modern property marketing requires you to be familiar with a wide variety of different channels, including social media, if you want to make the biggest impact and close your vacancies quickly.
- Screening tenants. Tenant screening is the process of doing background checks on tenants who apply to rent your property, so you can filter out people who won’t be able to rent your property consistently or responsibly. While it’s tempting to fill properties quickly, it’s much more important to make sure the right people are renting them.
- Collecting rent. You need to make it easy and convenient for your tenants to pay rent. But even if you do, they may occasionally forget or face delays in payment. In these situations, it’s your responsibility to issue reminders and collect rent.
- Addressing repairs and maintenance. You’ll also be responsible for addressing repairs and maintenance. It’s your job to keep the property in decent condition and correct issues as they arise. This also means being available for emergency communication – like if the heater goes out in the middle of the night.
- Responding to complaints. Tenants may have other complaints, like noise complaints, to send your way. You’re not responsible for every little issue, but there are some complaints you’ll need to act on.
- Documenting finances and paying taxes. You’re going to owe taxes on the money you make from your rental properties. It’s entirely your responsibility to keep documentation on all your earnings and expenses so you can make accurate reports and pay your taxes appropriately.
- Managing evictions. In rare cases, you’ll have problematic tenants that you need to evict. It’s important to follow the law closely during evictions, so you can get rid of your tenants with as few headaches as possible.
As you can see, despite the fact that rental property income is often labeled as passive, landlords have multiple time-consuming responsibilities to juggle. In most cases, you’ll be the one responsible for coordinating these efforts, but there is an exception.
Working With a Property Management Company in Houston, Texas
If you hire a property management company to help you with your Houston, Texas properties, you can delegate all of these responsibilities and more. It’s going to cost you a small percentage of your monthly gross income, but in exchange, your revenue stream is going to become completely passive – and you won’t have to be on call 24/7.
If you’re ready to get started working with a property management company in Houston, Texas, or if you’re just interested in learning more about how a property management company arrangement could work, Green Residential is here for you. Reach out today for a free consultation – and let’s start making money together!