Congratulations! You are a new property investor in Austin, Texas. So, what next?
Purchasing a rental property is just the tip of the iceberg. The real work begins with the preparation and actual renting out of the space. There are leases to be signed, renovations to be done, and the screening and selection of tenants, among other responsibilities.
If it all seems overwhelming, don’t worry! We can help. Check out these tips for first-time landlords.
To help you get the ball rolling, the team at Bigham & Associates has prepared this article. As a new landlord in Austin, Texas, here are some of the essential tips that you should take before renting out your property.
Tips for renting out your property in Austin, Texas
Tip #1: Screen your tenants
As a Texas landlord, you maintain the right to pick who occupies your space. You are allowed to legally reject applications made by prospective tenants. Questions asked during the interview process will determine the suitability of the tenant. Credit checks and references from previous landlords can also be used. This is known as tenant screening.
Austin property owners should however be cautious in the manner in which they perform the screening process. A lack of wariness may lead to discrimination lawsuits against you. A landlord cannot reject a prospective tenant’s application based on race, religion, national origin, sex, familial status, or physical/ mental disability. (Fair Housing Act of 1968).
For more information on fair housing laws, we recommend that you check out the U.S. Department of Housing and Urban Development, HUD.
Tip #2: Understand landlord-tenant law
Prior to any tenant moving in, they should append their signature to a landlord-tenant agreement. This is a contract between the two parties that will determine the use of the space and obligations for both parties. It is a legally binding contract.
The conditions set within the landlord-tenant agreement cannot be arbitrary. Were that the case, the landlord may create a prejudiced environment. The agreement and use of the space must adhere to specific procedures and rules set in Texas State Law. For example, you can simply decide to evict your tenant without prior notice.
Texas Rent rules also touch on the issue of Termination for Nonpayment of Rent, Rent Increases, Cash Rental Payments, and the issue of Late Fees.
Tip #3: Make your house renter ready
It is a legal requirement for Texas landlords to keep the premises in a habitable condition. This is as per the implied warranty of habitability. The right of the tenant is concerned breached once the tenant is reasonably concerned for their safety and health.
Making your house habitable cannot be put aside by a “disclaimer” in the landlord-tenant agreement. After all State laws supersede any agreement between two parties. Space that is in need of important repairs and renovations can be handled by the tenant and later on deducted from the rent.
The best way to go about is by hiring the services of a home inspector. Their expert advice on the condition of the house/ unit could prove critical. An inspection will be conduction checking on the foundation, superstructure, HVAC, utilities, and exposure to environmental hazards. From the inspection report, you can make the necessary repairs and renovations.
Tip #4: Hire the professionals
From the above, you have a taste of the legal requirements and obligations expected of a Texas landlord. To be on the safe side of the law, you will need the help of a number of professionals. Apart from the services of a home inspector, you should also consider hiring an experienced property management company.
If you ask any seasoned investor, they will reveal the hurdles of self-management. Once you have ownership of the property, you are responsible for marketing, tenant screening, maintenance of your properties, and payment of county and state dues. Tenants will be ringing you up at all times of day and night.
Property management is one of the services offered at Bigman & Associates. Our clients can attest to the quality and professional services and advice that we offer. With a well-maintained space, your tenants will enjoy their stay and are bound to stay longer. This results in less turnover of tenants, a high occupancy rate, and a stable income stream for the landlord.
The experienced team at Bigham & Associates can also help you navigate the sensitive and complex landlord-tenant rules. We can help you draft a legally binding agreement that does not contravene any laws. Remember there are also the guidelines to be considered in the Homeowners Association (HOA) and Declaration of Covenants, Conditions & Restrictions (CC & Rs).
Tip #5: Take an insurance policy
Also known as rental property insurance, landlord insurance comes highly recommended. There are risks associated with leasing property. It may be in the form of bad tenants or in property damage. A typical landlord insurance policy should be able to cover that.
You should take note that rental property insurance does not cover the tenant’s personal property. The same information should be conveyed to the tenant. If the tenant wishes to ensure their belongings, they can take up a personal cover.
To enjoy the benefits of your Austin property, you need to select your tenants in a rational and unbiased manner. Maintenance of your property must be a continuous service that you offer to your tenants. You must also stay abreast of landlord-tenant laws together with any other county and state property laws.
Complying with the legal responsibilities and meeting your obligations can be very demanding. Consider approaching the real estate professionals at Bigham & Associates. With 30+ years of experience in the Austin real estate industry, we can provide you with a customized and comprehensive solution that meets all your property needs.