If you recently bought a rental property in Houston, you're not alone. The Houston rental market has seen recent growth, creating more opportunities for local renters and investors alike.
Chances are, you've heard that becoming a real estate investor is one of the best ways to grow and protect wealth. The only problem? Rental properties aren't inherently a source of passive income.
It's time to learn what it takes to maximize your rental property investment. Read on for our top first-time real estate investor tips.
Assessing Your Rental Property's Value
The first thing you need to do is determine how much your rental property is worth. Start by calculating your fixed overhead costs, like mortgage payments and property taxes. Consult a rental expert like PMI to estimate your variable expenses like maintenance.
Then, use the comp approach to set the price of rent. Look at properties that are similar to yours in size, amenities, and location to make sure you're maximizing your income while remaining competitive.
Learning the Basics of Houston Landlord Tenant Laws
Before you go searching for tenants, you need to learn the basics of Houston landlord and tenant laws. This includes laws about security deposits, maintenance, entering the premises, and more.
For example, Texas does not impose a maximum security deposit limit on landlords. However, there are specific laws governing the return or use of security deposits. Failing to adhere to landlord and tenant laws will expose you to liabilities and fines.
Creating a Lease and Securing Tenants
When creating your lease, make sure to use clear, concise language. Cover information such as:
- Cost of rent
- Rent due dates and fines for late rent
- Move-in and move-out dates
- Rules tenants must follow (e.g., no pets)
- Consequences for breaking lease terms
- Legally required information (e.g., what recourse tenants have if you fail to complete maintenance)
Ask our real estate experts to look over your lease before anyone signs it. Once it's airtight, start screening applicants to verify income, debt, previous evictions, and other information that reveals their reliability as a tenant.
Protecting Your Property Value Long-Term
Houston rental property management involves much more than writing a lease and securing tenants. You also have an obligation to provide safe, livable conditions for your tenants. That means staying on top of maintenance, which will also protect your property value.
Create a streamlined process for tenants to report maintenance issues and communicate about property inspections. Make sure tenants know how to reach you to report a maintenance emergency. Finally, create a roster of contractors you can call to complete maintenance projects.
First Time Real Estate Investor? Get Support from PMI Northwest Houston
Now is a great time to be a first-time real estate investor in Houston. However, investing in Houston properties doesn't guarantee you'll turn a profit. You need a solid rental management strategy and, if you're hoping to earn passive income, a trusted partner to execute it.
At PMI Northwest Houston, we take the innovative and nationally-tested tools provided by PMI and combine them with our knowledge of the Houston, TX real estate market. Contact us for property management services you can count on.
