Becoming a landlord in Texas can be a profitable venture, particularly if you own property in a larger city, such as Houston or Austin. With the median gross rent in the state coming in at just under $1,000 a month, and the occupancy rate more than 90 percent, properties don’t stay vacant for long. However, you need to do a little more to be a successful landlord than just buying a property and putting it up for rent. You’ll need to know some of the ins and outs of the business and follow a few simple steps.
Find a mentor
Any entrepreneur can benefit from being mentored, but in real estate, it’s especially important because a lot of money is on the line. The main thing a mentor can do well is help you avoid common pitfalls they may have already encountered. And you don’t necessarily have to find someone to be with you every step of the way. A couple of meetings over coffee or a couple of brief phone calls could be all you need.
You have several ways to find a mentor, but the best way is just to ask around. You’ll probably be surprised at the number of people willing to help you, even if they’re technically in competition. Most landlords realize that plenty of business is available to go around and each property appeals to different people for different reasons anyway. The best mentor for this type of business is someone who owns property in the same area, or at least nearby. If you have trouble finding one though, it’s OK to reach out to someone in another part of the state.
Talk to your lender
Before you even start looking for properties, you should speak to a lender to find out how much you might qualify for. Keep in mind that borrowing money for investment property is a little different from how it is for a primary residence. You might have to put down a bigger down payment and pay higher insurance premiums. You can start by talking to the bank where you do business. They may be able to help you or they may direct you to a different type of mortgage broker. For this type of investment, hard money lenders in Texas could be your best option.
Purchase your property
Once you’ve gotten a good idea of what you can afford to purchase, it’s time to start looking at properties. The best way to go about this is to find a good real estate agent and tell them exactly what you’re looking for. You can begin your search online through one of the popular real estate search sites, but an agent might know of properties that haven’t even been listed yet. Working with a real estate agent who you mesh well with is important. This should be someone who listens carefully to your requests and is easy to contact. They should also be able to tell you what types of properties rent well in the neighborhoods you’re shopping in.
List your property
Once you’ve purchased your rental property, you’ll need to get it on the market and rent it out as quickly as possible. You have several ways to do this. You can list it in the paper, online, or with a real estate company, and each one has pros and cons. Listing it in the paper is an inexpensive way to advertise, but fewer people will probably see it than if you listed it online. A real estate company is a safe bet because many people go to them first when searching for a rental, but it will cost you a commission when they find your tenants. Posting your property online could be the best option for a rental in a lot of cases. You can post it on social media selling groups, Craigslist, or real estate rental websites.
Choose your renter
Choosing the right renter can be the most challenging, yet most important, task in your business. A good tenant will take care of your property, pay their rent on time, and avoid illegal activity on the premises. While you can’t predict everything a person will do, tenants who pass thorough background checks are more likely to fit the bill. Turbo Tenant's software is a must-have for all landlords. It allows you to input your applicant’s data and run all the proper checks.