Property Management Blog

Umbrella insurance

Web Admin - Tuesday, July 11, 2017

My grandma used to say always be prepared with an umbrella! For my investors that own rental property I ALWAYS encourage an umbrella policy to be purchased for extra risk reduction!

Umbrella insurance is extra liability insurance. It is designed to help protect you from major claims and lawsuits and as a result it helps protect your assets and your future. It does this in two ways: Provides additional liability coverage above the limits of your homeowners, auto, and boat insurance policies. (Reference: Google)

Rental Registration

Web Admin - Monday, June 05, 2017

Many cities have implemented a rental registration requirement for rental properties within their jurisdiction. The city will send a code compliance inspector to the property to confirm the property passes health and safety standards. The City of DALLAS recently updated with requirements and the top three areas owners need to know about include:

  1. All rental properties are required to be registered every year
  2. In order to register an affidavit is required which states the owner or manager has inspected the property within 60 days of registration
  3. the owner or manager is required to be within 1 hour of the property in case of emergencies.

Our office is trained on the City of Dallas requirements and can manage property anywhere within the City of Dallas jurisdiction.

HOA Docs

Web Admin - Monday, May 15, 2017

INVESTOR BUYERS!!! When you are purchasing a property in an HOA it is imperative to read the documents BEFORE you close on the property. One of our investors recently purchased an investment property and found out after closing that rentals were not allowed in that subdivision for the first 12 months after a property has been purchased. In addition to that stipulation the HOA board must approve all future rentals. The subdivision documents only allow for 15% of the properties to be used as a rental and that particular neighborhood was already over the allowed amount so for the foreseeable future no rentals will be allowed.

Unfortunately in this case the Investor purchased an investment property that he is not eligible to rent.

1st Quarter 2017 Texas Market

Web Admin - Tuesday, May 02, 2017

Texas real estate statistics for Q1-2017:

  • 68,420 Texas homes were sold in Q1-2017, a 4.6 percent increase from 2016-Q1.
  • Median sales price for Texas homes was $213,325, a 9.4 percent increase from 2015-Q1.
  • Monthly housing inventory in Texas was 3.6 months in 2017-Q1 compared to 3.5 months in the same quarter last year.
  • Active listings increased 6 percent year-over-year to 98,399 listings in 2017-Q1.
  • Texas homes spent an average of 64 days on the market in 2017-Q1, unchanged from the same quarter last year.

Source: Texas Association of REALTORS

AC units move from 22 to 410

Web Admin - Tuesday, April 25, 2017

For the past four decades, the refrigerant R-22, also known as Freon, a HCFC (hydrocholorofluorocarbon) has been the refrigerant of choice for residential heat pump and air conditioning systems. A recent Clean Air Act implemented by the EPA has established a schedule to phase-out HCFCs, including R-22, which contain ozone-destroying chlorine.

As of January, 2010 equipment using R-22 refrigerant are no longer being manufactured. Manufacturers of residential heat pumps and central air conditioning systems now offer equipment that uses ozone-friendly replacement refrigerants. Homeowners need to be aware of how these changes will affect them; from future availability of R-22, to potential price increases for R-22, to new ozone-friendly replacement refrigerants. Homeowners should take these changes into consideration when repairs on existing equipment need to be done as well as when they are thinking of purchasing new air conditioning systems or heat pumps.

The Clean Air Act does not “allow any refrigerant to be vented into the atmosphere during installation, service or retirement of equipment”. This means that R-22 must be “recovered and recycled (for reuse in the same system), reclaimed (repossessed to the same purity levels as new R-22), or destroyed.” After 2020, the servicing of R-22-based systems will rely on recycled refrigerants. According to the EPA, this reclamation and recycling should ensure that existing supplies of R-22 will last longer and be available to service a greater number of systems.

Existing units using R-22 can continue to be serviced with R-22. There is no EPA requirement to change or convert R-22 units for use with the new non-zone-depleting refrigerants. In order to change a system over to 410A it would need to change the condenser (outdoor unit), the evaporator coil and the refrigerant copper line set in most cases. Service technicians who repair leaks to the system will be able to continue to charge R-22 into the system as part of the repair so that this conversion would be unnecessary.

As R-22 is gradually phased out, non-ozone-depleting alternative refrigerants are being introduced to the HVAC industry. One of these substitutes is R-410A. This is manufactured and sold under various trade names, including GENETRON, AZ-20 ®, SUVA 410A ®, and Puron ®.

Another issue to be aware of is the possible price increases of R-22. The price is expected to go up as the supply of dwindles over the next 20 – 30 years. The EPA, however, believes that consumers are not likely to be subjected to major price increases due to the lengthy phase-out period.

The average life expectancy of an air conditioning unit or heat pump is around 15 years. What this means to homeowners, for example, is if you had installed a new R-22 air conditioning system in the year 2002, you will be able to get R-22 refrigerant for your system until the year 2020 when it will no longer be produced. Chances are, within that much time you will need a new system, so you shouldn’t base a purchase on Freon alone.

The new systems will incorporate compressors and other components specifically designed for use with specific replacement refrigerants. This significant change in both the product and production processes will require new testing and training. Consumers should be aware that dealers of systems that use substitute refrigerants should be schooled in installation and service techniques required for use of that substitute refrigerant.

Homeowners that have older equipment and decide to replace their old system should strongly consider purchasing high-energy efficient systems. Energy-efficient systems will result in costs savings. Today’s energy efficient air conditioners use much less energy to produce that same amount of cooling. According to the EPA, Energy Star ® labeled products can save homeowners 10 – 40% on their heating and cooling bills every year.

This is a change that benefits everyone, including our planet. Homeowners just need to understand how it will affect them and to be prepared. You can go to http://www.energystar.gov for more information on energy efficient systems.

Sources: www.energystar.gov
www.epa.gov
www.coolray.com

Leasing Fees

Web Admin - Friday, March 17, 2017

Many landlords are cost conscious and reluctant to hire a property manager due to cost. While I understand the budgetary constraints landlords are under it has been my experience that it costs less to hire a property manager than to try to lease a property on your own.

For example on a $1500 per month rental property - the time it takes to lease a property for a landlord could be 45 days. The average time for a property manager to lease is currently 19 days. In the 45 days of vacancy the cost to the owner is $2,250 ($1,500/30*45). Hiring a property manager can cost one months rent at $1,500 which is significantly less than trying to lease the property themselves.

What happens when a tenant does not pay rent?

Web Admin - Thursday, February 23, 2017

When a tenant does not pay rent the landlord must post a pay or vacate notice. The tenant has three days in which to pay the outstanding balance or vacate the property. In a situation where the tenant does not pay and does not vacate the landlord must file paperwork with the court to start the eviction process.

Texas requires a forcible entry and detainer be filled which is a lawsuit against the tenant. Once the paperwork is filled a court date is set. During the actual trial the judge will hear from both plaintiff and the defendant and render a judgement. If the landlord wins then they must then file a writ of possession in order to regain possession of the property.

A constable typically serves the eviction notice and the personal property is then removed from the home by the landlord and the locks are changed to lock out the previous tenants.

The judgment that has been won by the landlord can then be filed of record in the county court clerks office. To record this requires an abstract of judgment document from the lower court. This judgment is a lien against the tenant in the courthouse records. This judgment stays on file for 10 years or until paid in full.

If you are a landlord PLEASE consider hiring a professional property manager, they should know the proper procedures to follow when a tenant does not pay rent.

Dwelling vs. Homeowner’s Insurance Policy

Web Admin - Tuesday, February 14, 2017

Investor insurance is inherently more complex and much less standardized than your average homeowner’s insurance product. That’s why it is crucial that investment property owners understand the different types of insurance available. If you have a homeowner’s policy on your investment property, you will need to switch to a dwelling/landlord policy immediately. Homeowners policies typically have a provision that excludes coverage if you do not occupy the home. Most dwelling policies exclude coverage for any property left vacant for over 30 days. Always consult an insurance professional for options to protect your home asset.

Can the Deposit Be Used in Place of the Last Month’s Rent?

Web Admin - Sunday, February 12, 2017

No, the tenant cannot deduct the security deposit amount from the last month’s rent. If the tenant withholds part of the rent and claims that the security deposit makes up the balance, that action would be in violation of the lease. The tenants rent would have an outstanding balance and eviction procedures can begin by the landlord.

A Good Credit Score

Web Admin - Saturday, December 31, 2016

A good credit score is a great first indicator that an applicant may be a reliable resident. However, not everyone with a high credit score is a good applicant and not every low score means a bad applicant.

Rental Payment History

Having access to rental payment history, when it is available, is helpful for any property manager considering an applicant. Look for timely payments, and be on the lookout for a poor track record to make good rental decisions.

Eviction History

Knowing about past evictions for potential applicants is crucial to selecting the best fit for your properties - and avoiding future evictions.

Criminal Background

Understanding anything that shows up on an applicant's criminal past is important and can be a deciding factor when considering a potential resident.

Even more important than the criteria you choose to make your rental decisions is the consistency with which you use it – whatever factors you decide to focus on, they should be considered for every applicant.

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