How to Know if a Property is a Good Investment

How to Know if a Property is a Good Investment

Deciding to jump into real estate investment is just the beginning of a variety of decisions you’ll have to make. You’ll be surrounded by questions and things to ponder and consider. So, what is it that makes a property worth buying in order to rent out to tenants? What should you be looking for in a great investment property?

  1. Quick turnaround time – By this, we mean that you should be looking for homes that you can buy and have a tenant living there in no time. It can be costly and unwise to invest in a property that will need a ton of renovations before you can rent it out. It’s recommended to look for properties that will generate enough rent in 10 months to cover all costs or follow the “2% rule.” This is the financial rule that states that your monthly rent should be at least 2% of the total purchase price of a property.
  2. Check out the number of days homes are staying on the market as well as what other rentals are offering – If a neighborhood is seeing a decrease in the number of days on the market for homes being sold, this shows that the housing market in that area is heating up and could be especially desirable. On the other hand, if you see rental properties offering discounts and deals, this could be a sign that landlords are having a hard time filling the spots they have open and that the neighborhood isn’t ideal for tenants.
  3. Look into what else is available in the neighborhood – Big businesses spend a lot of money to scout out desirable neighborhoods that will sustain their company. If a Starbucks, Whole Foods, or trendy business is moving in, it’s a great sign that the area is booming and will bring tenants looking for a place to call home. If you’re looking at places in a college town, you need to know that you’re more likely to have a high turnover of tenants – people looking to stay for 1 – 4 years while they finish a degree. If you’re targeting millennials in a city, target your home searches to walkable neighborhoods that are close to public transportation and restaurants/businesses.

If you ever have any questions about real estate and investment properties, don’t hesitate to reach out to our helpful team. We’re here to ensure that your properties and investments are well taken care of.

loan-to-value ratio explained

Loan-to-Value Ratio Explained

If you’re considering buying a home, there will be a lot of delving into your finances in order to qualify for a mortgage. One of, if not the most, crucial factor to be approved for a mortgage will be your loan-to-value ratio. The loan-to-value ratio is pretty straightforward. It’s simply the amount of money you borrow from your lender, divided by the purchase price of the home in a percentage format.

The loan-to-value ratio is extremely important for lenders as it gives them a better insight into the risk they face loaning money to a prospective homebuyer. The higher your loan-to-value ratio, the higher the risk to the lender, which may play into the mortgage terms and interest rates the lender can offer you. While lenders also look at your credit score, they want to make sure that you have equity in your home and are willing to make a sound investment that you can afford.

Many lenders require that borrowers have a loan-to-value ratio of 80% or lower before they approve a loan, which means that they’re really looking for borrowers to put in 20% for the down payment.

If you’re worried that you could fall under the high loan-to-value client group, there are a few ways to lower your ratio and increase your chances of being approved and getting great terms for your home loan.

One way to lower your loan-to-value ratio is to save up more money in order to have a larger sum to put down for your home. If you can offer up 20% or more of the home’s value, you’ve already lowered the loan-to-value ratio and made yourself less of a risk to the lenders by proving you have a stake in your home. The other way to lower your loan-to-value ratio is to look at more affordable homes. Choose a home that you would need a smaller down payment for, and you’ve immediately taken care of reducing the loan-to-value ratio.

If you ever have questions about your loan-to-value ratio and choosing a property that fits your budget, give our team a call. We’re here to make real estate processes simple and easy to understand for everyone.

New Homes in South Austin

New Homes in South Austin

The 468-acre plot of land known as Turner’s Crossing will soon be a sprawling community with more than 1,300 single-family homes. The community will also offer a variety of amenities, including pools, playscapes, a splash pad, and a three-mile walking trail. The construction project is an ideal location and just 11 miles south of Downtown Austin.

If you’re thinking that it sounds like a massive project, you’d be right. In fact, Meritage Homes Corp is constructing homes in phases and is even working with other partners to get the project rolling. The first phase is likely to start construction soon and will be in the northern section of Turner’s Crossing, between FM 1327 and SH 45.

Trendmaker Homes Austin has also acquired land in the area, 324 single-family lots, to be exact. The company has set a target open date for June 2021. Taylor Morrison Home Corp. will also be helping out and constructing some new homes within Turner’s Crossing.

With a large demand for affordable single-family homes in Austin, there’s no surprise that several companies are putting in their all to develop the south Austin area, but there’s still a chance for more development groups to get in on the action. Close to 40 acres of Turner’s Crossing will be dedicated to commercial and multifamily projects, but Meritage hasn’t begun negotiations to sell this property to developers.

It will be interesting to watch how this project unfolds and what kind of commercial and multifamily residences will join this massive community. The development of land in Austin solely dedicated to homes priced between $200,000 and $400,000 has been needed for some time.

If you have any questions about the area and what kinds of investment properties may be right for you, give our team a call. We’re happy to talk real estate and what the current developments can mean for Round Rock, Austin, and the surrounding areas.

TALK Property Management Austin Texas Rental Property Home Warranty

Choosing a Home Warranty for Your Rental Property

Choosing a Home Warranty for Your Rental Property 

There are plenty of expenses when it comes to owning a rental property. New application fees, landscapers, and even the downtime costs associated with utilities when no one is residing at the property. There are many factors to consider when renting your property but the thing you may not have thought about can save you a lot of money and peace of mind. A home warranty.

Large ticket items, like your A/C unit, appliances, or plumbing issues, are not typically covered under your homeowner’s insurance unless in cases of natural disasters. When you have a rental property it is important to ensure maintenance items are covered. This is where a home warranty comes into play.

Saving you time and money, a home warranty company will take care of those maintenance nuisances that seem to happen when you’re least prepared for it. The service level plan you opt into will determine the amount of out-of-pocket expenses you can expect for a maintenance request. 

There are several home warranty companies to research and determine the best fit for you:

  • Choice Home Warranty
  • America’s First Choice
  • Select Home Warranty
  • Total Protect
  • HSA
  • Old Republic
  • Guaranteed Home Warranty
  • Landmark Home Warranty
  • Stanley Safe Club
  • Allied Home Warranty
  • American Home Shield
  • BFS

 While a home warranty can’t guarantee the best tenant, that’s our job, a home warranty can help alleviate the stress of maintenance repairs. When you’re ready to consider all the options available to you for your rental property and need help with professional management services, give us a call. 

Mixed-Use Developments are the City's New Domain

Mixed-Use Developments are the City’s New Domain

If you’ve spent any time in North Austin, we’re sure you’ve been to The Domain. It’s been revered as a success to many in the business community and is even viewed as a development the community has to match. 

But, just like any other story, there’s another side to consider. In fact, many people think the development was a missed opportunity. They believe the area had the potential to be a more walkable and integrated retail and business area.

The Domain has expanded to cover more than 300 acres and holds offices for some of the largest companies and employers in Austin. From Facebook to Indeed, you’ll find many employees driving in for work in this neighborhood. On top of those office spaces, you’ll find thousands of apartments and more than 1.8 million square feet of retail space. With hotels in the neighborhood as well, this mixed-use space has it all.

While The Domain continues to grow, other developers are taking the feedback on how to improve the project to heart and using it for their own designs, including one that’s coming to Round Rock! A developer wants to put in a $200 million mixed-use space near I-35 and State Highway 45 that takes guidance from The Domain.

Developers are calling the project “The District” and hope to give it a 24/7 vibe that appeals to younger demographics and will be minutes from Dell’s headquarters. The project was first proposed in 2017 and plans have started moving forward to get started on the development. It’ll be exciting to see if The District rivals the same success as The Domain and what new retailers, entertainment spots, and offices we’ll be able to find here soon! 

If this new development has made you excited or even curious about Round Rock and the Greater Austin area, give us a call! We’re always happy to talk about neighborhoods and changes to properties throughout the area.

property management

How to Properly Manage Your Properties

Real estate investing is a fun opportunity, but in order to make sure you’re successful, you need to be the best landlord and property manager you can be. Not sure where to begin? We’re here to help.

  1. Lease targeting – Schedule lease end dates for times when the market is going to be particularly full of potential tenants looking for a new place to live. This decreases your risk of having open spaces and no tenants to live in your properties.
  2. Plan ahead – We all know that problems spring up when we least expect them, so be prepared. Make a plan for how you’ll take care of repairs when you’re out of town and be sure to set aside 10% of your rental income for unexpected repairs and emergencies.
  3. Happy tenants are the best tenants – Make sure that you take care of any repairs promptly and that you are easy to communicate with. Keep the property in good shape and stay respectful.
  4. Have office hours – This tip goes hand-in-hand with the previous one listed. Have designated hours that you can be reached and encourage your tenants to contact you during those specific hours.
  5. Encourage good behavior – If a current tenant refers another great tenant, be sure to reward them with movie tickets, a gift basket, or a discounted month of rent to thank them.
  6. Inspections before and after moving – Document the home before a tenant moves in and after they move out, and consider going a step further by taking video logs for your records. Have the tenant document and sign off on any damages they see before moving in.
  7. Ensure you’re insured – Check with the state to make sure you have all the proper insurance needed for your properties.
  8. Make payments easy – A lot of people find that paying rent online is easier and more reliable, so look into if that may be an option for you.
  9. Competitive rental rates – Keep a pulse on what rental properties near you are charging and take into consideration your location. You want to be charging close to what others in the area are as well.
  10. Have a team behind you – It takes a village to raise a baby, and it takes another one to take care of a home. Make sure you have professionals you can count on to help you with repairs, answer your questions, and give you legal advice.

These ten steps are just the beginning to properly managing your property. That’s why we’re here! We make it easy to keep your investment secure and make sure everything is running smoothly. Take the stress out of owning multiple homes, and let TALK to do the heavy lifting for you. Give us a call or email us with any questions.

Round Rock development

Construction Projects Call Underdeveloped Section of Round Rock Home

As Austin expands, so does its surrounding neighborhoods. Developers are looking for open spaces they can turn into homes and businesses to keep up with the high demand. Recently, they’ve set their sights on a previously empty corner of Round Rock.

Near the intersection of County Road 110 and University Boulevard, homebuilders are beginning plans to construct 1200 single-family homes. In the same area, another company is petitioning to bring nearly 150 acres of duplexes, multifamily, and single-family homes. A majority of the Round Rock neighborhood is developed land or currently undergoing developments, so it’s no surprise that builders are looking to the northeast as the site of their new projects.

Residences aren’t the only project lined up for the area. Commercial spaces have also been zoned off for the 356-acre plot of land KB Home Lone Star Inc. is using for the massive subdivision. 11 acres along University Boulevard are zoned for retail, office, and other uses with a maximum building height of five stories. The other 345 acres will go to a variety of single-family homes that will appeal to a mix of homeowners.

Across from the KB Homes, a 190-acre plot of land has been zoned for Scott Felder Homes. The residential and commercial development will feature single-family homes, apartments, townhomes, duplexes, and some other commercial buildings that haven’t yet been specified.

University Boulevard will soon be a flurry of hammering, sawing, and other construction noises in order to have enough homes to fill the growing need to live in a suburb that makes it easy to commute to Austin.

If you too are thinking about moving to the outskirts of the city, but aren’t sure where to begin, I’m happy to help you. There are a lot of growing areas that may be exactly what you’re looking for, so give me a call and let’s talk neighborhoods!

summer home maintenance Talk Property Management Austin texas

Your Summer Home Maintenance Checklist

 

Your to-do list always seems to have some kind of home maintenance project on it, especially when a new season begins. Between your pool days and backyard BBQs, make sure you work consistently on the upkeep of your home. Not sure where to start? Luckily, we’re here to help.

 

  1. Check the smoke and carbon monoxide detectors in your home. It’s recommended that you do this once a month, so be sure you’re always putting this at the top of your checklist.
  2. Prep your air conditioner. The sweltering heat means that your A/C and fans are going to be working hard to keep you cool. Be sure you keep units clean and switch out the filters once a month in order to make sure there’s no disastrous break down and that they’re operating at peak performance during the few months you need them.
  3. Keep your grill clean. It may have been months since the last time you fired up the outdoor cooker for burgers and steaks, so give it a deep cleaning. The burnt residue of last year’s forgotten hot dogs won’t improve the flavor of this year’s hot dogs.
  4. Give yourself a porch worth perching on this summer. Dirt and debris can accumulate on your porch, especially after a harsh winter. Sweeping and mopping your porch can do a lot to refresh the atmosphere and make it the perfect place to enjoy those summer evenings.
  5. Detail your deck. It’s important to hammer in any nails that are coming up and could cause someone to trip. Check for rotting and see if it might be time to reseal it.
  6. So mulch to do for your garden. Mulch keeps weeds down and can help your plants retain the moisture that the summer sun tries to take from them. You should also find time to get rid of the dead foliage and let your plants focus their energy on the healthy parts of the garden that are trying to bloom. Train your garden for the hot and dry days by setting up a new watering schedule. Water a few times a week with more water than you usually add rather than watering them lightly every day. It helps promote strong and deep roots.

 

We hope this summer checklist won’t interfere with any of your plans and will make your house the hub for all the season’s best get-togethers. If you or a loved one are looking for a new neighborhood that offers everything you need for a fun family summer, we’re here to help you find that dream home!

Six Tips on Investing in Real Estate Talk property management dona brown

Six Tips on Investing in Real Estate

Today we’re lifting the veil and revealing some of the key factors you need to know to begin investing in real estate. We’ve laid them out in six simple steps to get you on your way.

Step one: Learn everything you can about real estate investing.

Real estate has many nuances and can be a large beast to jump into head first, so it only makes sense to seek knowledge from those who’ve been in the industry and have hands-on experience you can use to your advantage. No matter how you learn best, there’s a method for you. From books and blogs to podcasts and forums, you’ll find a plethora of knowledge and experience that will benefit you in the long run. Start with the general topics and take a deeper dive into the investment areas that catch your eye.

Step two: Don’t wing it.

If you don’t make a plan and start investing based on an idea of grandeur in your head, you’re bound to make a lot of mistakes. Mapping out where you are today with your assets, expenses, and monthly income, as well as where you want to be and how you’ll get there will keep you focused and moving in the right direction. Once you have a plan set out, ask an investor to look it over and make sure it’s plausible. If there are some flaws in your plan, your investor will point them out and help you create a plan that may work better for your budget and lifestyle.

Step three: Finance before you purchase.

What we mean here is that you need to know how you’re going to finance your property purchases before you try to find the residence you would like to add to your investment portfolio. Banks and mortgage lenders will be able to show you all of your options, so you can narrow your scope and focus on properties that make sense for you.

Step four: Look for the right investment.

This is the step that can hold many people back. It makes everything real and is the step you need to take to actually make your investment plan a reality. Make a list of what you’re looking for and specify location, price, property type, and condition of the property and begin crossing off homes that don’t work for you. Don’t make exceptions to your list and stick with your gut.

Step five: Put in the paperwork.

Partner with a real estate agent who understands real estate investment, and don’t be afraid to tell them all of your wants and needs. Your agent will begin to pull properties that meet your criteria list and negotiate with the sellers when you find the right fit to get you the best deal. Once you’ve struck a deal, look for unforeseen costs and have an inspector take a close look at the property. The last step is to close and officially become an investor!

Step six: Effectively manage your properties.

Just like any other business, real estate investment will fail if it’s managed poorly. Learn what it takes to be a good landlord, or look into professional property management companies and find the right manager for you and your investments.

If you’re thinking about real estate investment and are ready to find the right property that meets everything on your criteria list, we’re here to help! Reach out to us today, and we’ll begin the search to put your plan in motion.

TALK Property Management Infographic AustinArea

Austin-area Home Demand is Strong, but Median Price Stalls Slightly – What This Means for Real Estate Investors

 

Strong first-quarter home sales in the greater Austin area continued into April, according to the most recent Central Texas Housing Report released by the Austin Board of REALTORS®. However, the Austin-Round Rock MSA’s first quarter home sales were tempered with a stalled median home price increase of just .2% during that period. This figure is significantly lower than in the same period in previous years.

“Between 2012 and 2015, we saw price increases as high as 9%,” said Kevin P. Scanlan, 2019 president of the Austin Board of REALTORS®. “These narrower margins are a strong indication that market prices are starting to stabilize.”

Home sales volume continues to rise in the greater Austin area, and it was up 14.9% to 3,035 sales. Surprisingly, new listings were down 1.8%, but active listings increased 1%, another opportunity for Austin-area real estate investors.

Pending home sales in the greater Austin area spiked to 14.3%, while months of inventory hovered at 2.4.

According to the Texas A&M Real Estate Center, a “balanced real estate market” is defined as six months worth of home inventory. With housing supply hovering at 2.4 months, the greater Austin area remains a “seller’s market,” meaning that it is generally more favorable to sellers/owners due to a reduced supply of homes.

However, with the median home price tapering, there appears to be some stabilization and a silver lining for investors who are considering investing in Austin-area residential real estate, especially while interest rates remain low.

Regardless of your situation, TALK Property Management is always here to help, even if you just have a question about the real estate investments in the Austin area. Or, if you’re considering selling your investment property or if you know someone who is, contact our TALK Property Management today. We are always here to help.