4 Questions To Ask Yourself Before Becoming A Landlord

Investing in real estate is one of the most dependable ways to build wealth, but it’s important to know all the ins and outs before getting into it. Set yourself up to be successful by researching and making sure it’s the right choice before you purchase your first rental property.

In the midst of your research, ask yourself these four questions before starting your journey as a landlord.

Do You Have Enough Time?

Being a landlord isn’t as easy as buying a property and finding tenants; there is a lot more to it than that. If you are going to update the property before finding tenants, you’ll be taking calls and coordinating contractors to come out to the property. Once you have tenants, they’ll call if something needs to be fixed or something goes wrong, and those calls could come any day at any time. As the landlord, these are all things you will need to handle quickly to keep your tenants happy.

Remember, the more properties you own, the more calls you’ll take and the more issues you may need to handle. 

How Will You Screen Potential Tenants?

Making sure you choose the right tenants is important because you want to make sure they will take care of the rental and pay their rent on time. While it might cross your mind to let whoever replies to your online ad first move in immediately, that is not the smartest idea. As the landlord, you want to screen prospective tenants by performing background checks, checking credit scores, confirming income and job details, and calling previous landlords to make sure they’re the right fit.

Do You Have Legal Counsel Lined Up?

While you hope to never have to call your lawyer, it’s important to have one lined up that specializes in landlord-tenant issues. If nothing else, having a lawyer review your leases and ensure all paperwork complies with local laws is helpful. There may come a time when you have a tenant who doesn’t pay their rent, and in this case, an experienced lawyer will be a huge asset. 

What Is Your Why?

Understanding why you want to be a landlord is important for success. Are you doing this on the side to make extra money, or do you want to do it as a full-time job? Will the time you’re putting into being a landlord and the potential issues that could come up be worth it? Keeping your why at the forefront is important as you purchase your first rental and continue becoming successful.

Becoming a landlord is hard work, but the rewards will be huge if everything works in your favor. If you have any questions or need recommendations about how to start investing and becoming a landlord, reach out to us! We are always here to help.

5 Ways to Make Your Home Feel and Look New This Spring

Whether you’ve lived in your home for years or are looking to sell this spring, we’re sure you’re tired of looking at the same walls for years on end. A new study discovered that homeowners now spend about 13 years in their homes. This is a considerable increase of about ten years compared to a decade ago. Many factors determine the length of homeownership: older homeowners aging in place, a home supply shortage, and more affordable housing payments if homeowners refinanced and took advantage of the low mortgage rates last year. Whether a seller or homeowner, here are 5 ways to bring your home back to life and make it feel and look new this spring!

1. Paint the walls

Paint is the most cost-effective way to make a massive difference in any room. This will be especially noticeable if the walls are chipped or show other flaws. 

But choosing the right paint color is the key to success. For a color that goes with everything, earthy colors or tinted neutrals are the colors you want. Both color types are soothing and easy to mix and match in your home. If you want to give off the illusion of more space, then off-white will be your friend.

If you’re selling this spring and want to attract homebuyers, it’s best to avoid colors that trigger a love-it or hate-it reaction. Think of trending colors like mint green, yellow, baby blue, etc.

2. Update the kitchen

You don’t have to renovate your entire kitchen to make it feel new, either! A few replacements and upgrades will help give it a new look. Some ideas are replacing old kitchen cabinets and handles with modern hardware, installing a touchless faucet, or installing or updating the backsplash. 

3. Replace outdated light fixtures

Any REALTOR® or photographer will tell you that lighting is essential. Lighting has a significant impact on a room by defining the room’s look and feel. Lighting fixtures go out of style, too, so consider replacing old chandeliers, sconces, and pendants. It’s also a good idea to replace the light bulbs themselves, depending on the mood you want for the room. For bedrooms, it would be beneficial to use soft-white bulbs, while the kitchen could benefit from daylight bulbs. Don’t forget exterior lighting either!

4. Increase curb appeal

Did you know homes with high curb appeal sell for 7% more than houses with a less than pleasant exterior? Your home’s curb appeal is people’s first impression of your home, and you know that saying, “you only get one chance to make a first impression.” And that’s true with homebuyers this spring! Increase your home’s outside appearance by adding landscaping or changing what’s already there. If you don’t have a green thumb, a simple task like trimming trees and shrubs will still make a big difference. 

5. Replace the carpet 

According to a March 2021 poll by the National Association of Home Builders, most homebuyers prefer hardwood floors. 32% said hardwood floors in the main living area is a “must-have”! So if your flooring needs a tune-up, consider removing the carpet and going for hardwood. Another option is to restore the original hardwood floors found under the carpet. Laminate hardwood floors are less expensive than natural wood and easier to maintain if you’re on a budget. 

If you need help sprucing up your home this spring to sell your home, contact us

How Your Home Can Make You Money

Owning a home gives you a sense of security, a place to call home, and regular monthly payments as you build equity and your investment portfolio (investor or not), but there’s another unknown benefit; how your home can make you money. Here are ideas to generate extra cash using your biggest asset: your home!

1. Become an Airbnb host 

Becoming an Airbnb host is an excellent idea if you have the extra space. As an Airbnb host, you control how often and when you want to open your home. How much you earn will depend on how much space you’re renting out. Renting a house will get you more money than renting a bedroom. If you have a second property, listing a 4+ bedroom home can get you an annual income of about $29,000. If you go the Airbnb route, be sure to check the local laws to make sure it’s legal and if there are restrictions on home-sharing. 

2. Rent out your home

Keeping with renting, renting out unused living spaces is also a great income source. You don’t have to own a second home to be a landlord. If you have a finished basement, tiny home, or accessory dwelling unit in your backyard, these are all rentable options. You can also stick to the classic renting arrangement where you rent out a room and share facilities with the renter in your home.

3. Store other people’s stuff

If you don’t want people in your home, how about their stuff? People have a lot of things and do not always have the space to store them. Take advantage of that extra garage or shed space and rent it out. This is the easiest way to get some extra dough since there’s no maintenance or repairs compared to being a landlord. The space you have will depend on how much you can charge. Closet space can be $5 to $10 a month, while a garage or shed can be $100 or more a month. 

4. Charge for parking

If you have a prime location in a popular area of town, especially where parking is limited, like near a college university or downtown, you can capitalize on the need for parking! Neighbors, students, and office workers are a great source of reliable income since they’ll need a safe area to park their car regularly. According to specialized sites like Neighbor or Spacer, you can make as much as $200 to $500 a month renting out your parking space. Again, it all depends on location, though. 

If you’re looking for an investment opportunity or want to become a homeowner, contact us today! 

Benefits of Month-to-Month Tenants

Now that you have a property, you need tenants! But what kind of tenants? Do you want short-term or long-term? Month to month or fixed-term lease? Long-term and fixed leases are the most common, then short-term for vacation rentals. In this blog, we’ll discuss the benefits of having month-to-month tenants. 

What are Month-to-Month Tenants?

Month-to-month tenants are renters who pay rent monthly to stay on the property without an expiration date. This means the lease doesn’t have a fixed end date and it will automatically renew at the end of each month. Typically, the renters will pay their monthly rent until either party gives a 30-day notice. 

Benefits of Month-to-Month Tenants

More control over timing and financial flexibility are the significant benefits to month-to-month tenants. Month-to-month means the landlord can end a rental agreement at any time very quickly and usually doesn’t need a reason to terminate the lease. With month-to-month tenants, landlords have more financial flexibility as the landlord can change the rent easily. This is usually why monthly leases have higher rents than long-term leases. But most renters who enter this lease understand that they’re paying higher prices for the short-term lease. It is a great option for buyers waiting for their house to be built or people testing out living in a new city. There’s flexibility for both the tenant and the landlord. 

Drawbacks of Month-to-Month Tenants

We want to be fair and explain both sides before landlords decide this is the leasing option for them. There are some drawbacks to month-to-month tenants like sudden vacancies and uncertainties. When landlords offer a short-term lease like this, they have to be aware that there might be sudden vacancies since the tenant is allowed to leave at short notice. If they want to fill the vacancy, this can be stressful for the landlord (unless you have a property management company like us!). Second and tied in with sudden vacancies are uncertainties like when the landlord will receive rent and finding short-term renters. On top of spending more time and money to prepare the property, advertise the property, screen new tenants, and show the rental (did you know TALK Property Management does all those things for you?). 

As a landlord or investor, it’s up to you to choose the best lease option for you and your property. There are benefits and drawbacks to a short-term lease and rental with month-to-month tenants. If you need help discussing your leasing options, contact TALK Property Management

Vacation Homes Are the New Starter Home for Millennials

Millennials are changing the way they buy houses and why they buy the ones they do. The usual path to homeownership and multiple homes was purchasing a single-family home to live in, then purchasing a second property as either an investment or a vacation home. But Millennials are changing it up by going out of order and buying their vacation home first. 

Why Are Millennials Buying Vacation Homes First?

One short-term rental platform discovered that millennials make up 40% of vacation homebuyers, an increase of almost 10% compared to 2019. It’s the largest share of any generation! Millennials cite reasons like extra income, building wealth, and having a property to vacation at as reasons why they purchase a vacation home as their first property. They get “the best of both worlds” as they continue to save for a down payment for their live-in home while also having an investment property to help pay the rent and mortgage. 

Remote work is a massive factor in this trend as the pandemic forced many workers to work from home. And working from home is an increasingly common work environment for younger Americans. With flexibility over work location, many Millennials seek a new location for vacations and remote work. Hence why vacation homes are taking a priority. 

Home prices are another factor as home prices have surged in many cities and metropolitan areas. Buyers consider new regions and locations to purchase a place, like in a rural location. Other living expenses are rising too, especially in popular cities. Homebuyers in high-rent markets use their vacation home as a loophole to avoid high home prices while still investing in real estate. 

Why Millennials Should Buy an Investment Property Home in Austin

Austin has ranked as one of the top U.S. cities for remote workers. Austin is known for its warm sunny temperatures and outdoor activities, making it a popular location for Millennials. With popular attractions like Lady Bird, Barton Creek, Lake Travis, and Zilker, there are endless opportunities for outdoor activities to choose from! 

It’s also quickly becoming the best city for employers as large entities like Facebook, Apple, Google, Tesla, and Oracle are expanding and relocating to Austin. More employers moving into the city will bring more residents moving for their jobs at these companies. And that means there will be more renters in the market for a home. 

Plus, Austin is already the #1 housing market for Millennials. A homebuying platform collected data of the 100 largest metro areas to find the best home markets for Millennials, Gen Xers, and Baby Boomers. Austin ranked #1 with Millennials and #1 for Gen Xers. The study found that Austin has 40 times more new millennial residents on average compared to the other 99 metros in the study. 

Contact us if you’re ready to buy your first investment or vacation home! Reach out to TALK Property Management–we are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

Homebuyers Want Home Offices…Again

The home office trend didn’t stop like the homemade bread trend that started at the beginning of the pandemic. Home offices are now considered a necessity for homebuyers as many work remotely or have relocated during the pandemic. 

Why Does a Homebuyer Want a Home Office?

The “Emerging Trends in Real Estate® 2022” reports that “almost two-thirds of real estate professionals believe that fewer than 75% of workers will come to the office at least three days a week in 2022.” Additionally, a recent McKinsey survey found that nine out of 10 companies will keep their remote work arrangements even after the pandemic. 

 

A home office has become an essential part of a homebuyer’s needs. It’s as critical as other home-defining criteria like location, square footage, and price. The National Association of Home Builders found in their survey that 64% of today’s homebuyers want a home office. Almost a quarter of them call a home office essential. 

What Do Homebuyers Want in a Home Office?

After talking to several agents, Money.com found that real estate agents agree that homebuyers are very particular about the home offices they want. One agent said buyers want a closed-off space for privacy that still allows for natural light. Another REALTOR® noted the size and style of the home office are essential to most homebuyers since Zoom has become the primary form of communication, and they want a neat and professional space to make calls from. 

They also want answers to technical questions like the strength of the internet connection, download and upload speeds, internet providers, fiber connections, and cell phone carriers. This is novel since many haven’t provided such specific information before. 

KB Home, the fifth-largest builder in America, has caught onto the trend and is capitalizing on it. In August, they launched a home office package for buyers to add to homes. It ranges from $2,000 to $3,000 and will include extra-wide counter spaces, USB charging outlets, data ports, and open shelving. If homebuyers want to get technical, they can pay extra for upgrades like soundproofing, phone jacks, and custom lighting packages. 
As you can see, the home office trend is returning, and it’s staying. Contact us if you need help marketing or selling your home with a home office! We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

When Can You Back Out of a Real Estate Contract?

Before buying a home or investment property this fall, here is what you need to know about your real estate contract and how to get out of it if necessary. Each real estate contract is unique and may apply to certain circumstances, so always ask your REALTOR® beforehand. 

During Due Diligence

The due diligence phase in the home buying process is the negotiation period when the buyer can review the house and ensure everything is good before deciding to move forward. We’re in a seller’s market now, so buyers are competing against each other. As a way to close quickly and appeal to sellers, some buyers are skipping this phase and the inspections tied with it. But this is the easiest time to back out of a real estate contract. 

Contingency

After the due diligence phase, the only way to get all your money back is if a contingency is not met. A contingency is a condition that must be met before the closing date. They’re called contingencies because the closing is contingent on these specific requirements. 

Contingencies are a form of protection as they will protect you if something is found during the home inspection, title process, or if the appraisal goes too high. Again, since we’re in a seller’s market, there might not be time to include these contingencies. 

Another common contingency is a financing clause. The clause will indicate that the buyer will use all good faith to obtain a loan, but if they are not able to qualify for a mortgage, then they can get out of the deal with no consequence. This is why getting pre-approved is so important in today’s market! Sellers fear this financing contingency, which is why they prefer cash offers, even if it’s lower than their original price. 

Earnest Money

If everything goes right and you’re on track to buy the property, you can still back out of the real estate contract, but it will cost you money when it’s this late in the game. Part of what’s included in a real estate contract is how much each side would be compensated if the other party backed out. This is called earnest money. It’s usually 1% to 3% of the agreed-upon sale price but can be as high as 10%, depending on the real estate market. 

Homebuyers will put this earnest money into an escrow account at the contract signing. This deposit will apply to the down payment or closing costs once the sale goes through. If the deal doesn’t go through, though, the seller keeps the earnest deposit as compensation. 

Today’s Market

There might not be time for these contingencies in today’s hot real estate market, which is why you have to be careful. Many buyers are waiving contingencies as a strategy to close on a house faster. With this route, it’s common for buyers to make up the difference if there’s a difference between the offer price and home appraisal. 

As your real estate agent, I’ll help you navigate through this hot market. Contact me! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com

What Does A Homebuyer Pay for in Closing Costs in Texas?

Home prices have begun to stabilize in Austin! According to the Austin Board of REALTORS® July stats, the median home sales price is $480,000. This is $2,364 less than the previous month. If you’re ready to buy as a homeowner or an investor, read what you’re paying for in your closing costs. 

Title Company Fees for Homebuyers in Closing Costs

These are the following fees your title company will charge you and what you are responsible for paying as the homebuyer. 

Escrow Fee

The buyer and seller will pay their own escrow fee to the title company to process the sale’s closing. 

Endorsements

Endorsements are expanded coverage with a title company’s insurance policy to help cover the specific needs of the transaction. Depending on your title company and unique situation, this price can be as low as $30 or as high as hundreds or thousands of dollars. 

Recording Fees

Once the sale is finalized, documents need to be sent to the county. This can range from $120 to $160, but it will depend on the county. 

Appraisal Fee

The buyer typically pays for the appraisal, and it can range from $500 to $700. The lender you choose will most likely want an unbiased third party to appraise the property to ensure the property’s value matches the contract price. 

Credit Report

A buyer will pay the $50 to $75 fee for their credit report to be pulled.

Lender’s Document Preparation 

This $100 to $120 fee is paid to the lender for creating and organizing all the closing documents. 

Escrow Accounts for Homebuyers

If you’re putting down less than 20% for a down payment, the lender will require you to place your taxes and insurance into an escrow account at closing. As a homeowner, you will pay your taxes and monthly insurance to your lender directly using the escrow account. When the taxes and insurance are due, the lender will use the money from the escrow to pay them on your behalf.

Homeowner’s Insurance

Depending on the property and the coverage you choose, the price can range from $900 to $2000 per year. 

Property Taxes

At closing, the seller will pay the buyer a year-to-date prorated amount for taxes. For example, if the closing happens on October 1st, the seller will give the buyer credit for ten months since the seller owned the property for ten months of the year. The buyer is then responsible for paying the difference between the credit and the total tax bill at the end of the year. Your lender will require several months of taxes in the escrow account. 

If you’re ready to buy or invest in Austin area real estate, contact us today! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com

What Investors Should Know About the Austin Real Estate Market

Austin has become one of the most desirable real estate markets this year, thanks to its ongoing growth. Many companies are relocating and expanding to Austin, which is causing people to relocate as well. More residents mean more people who need housing. This is the perfect time to become an investor in the Austin real estate market! Before you take advantage of the market, here’s what you should know about the local real estate market. 

Renters Can Afford More 

Since many people are relocating for Austin’s incredible job market growth, that means there are people with higher education and higher incomes coming to Austin. These individuals need a place to live, which means you can increase your monthly rent. According to Apartmentdata.com, the rental price for July 2021 was $1,422/month. But don’t go above the market average, then your property will sit vacant for longer. If you need help pricing your property, reach out to us! 

Occupancy Rates Are High

Occupancy rates have always been stable in Austin, but now they’re increasing. As stated in the Apartmentdata.com July 2021 stats, over the past 12 months, the rental rate growth increased by 9.4%, and occupancy is at 91.4%. This hot seller’s market makes homes unavailable for some due to low inventory or high price tags. This means they’ll continue to rent and renew their lease. This creates a unique opportunity for you. 

From that same data, areas all around Austin are popular for renters, which gives you several locations and price ranges to choose from. The most growth came from a combination of downtown Austin, South Congress, and Barton Springs. The other hot submarkets are University of Texas/Mueller, “outlying metro”, Round Rock/Georgetown, and Cedar Park, Leander, and Four Points. 

The Job Market Is Strong

The pandemic has made Austin an attractive home base for many big companies like Tesla, Google, Amazon, Facebook, Oracle, and more. Data from the Austin Chamber of Commerce show that in just June alone, over 20 businesses have relocated to Austin or opened their new business in Austin. More jobs = more people, and more people = more housing. 

Why Invest in the Austin Real Estate Market?

Some other reasons to invest in the Austin real estate market are: 

  1. Quality Education
  2. High Demand for Skilled Labor 
  3. Austin Has Plenty of Amenities
  4. Austin is an Active Community

 

If this all sounds good to you and you’re ready to invest, contact us today! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com

Hot Summer Color Trends for Austin Investors

If you’re looking to spruce up your home for summer or need some summer inspiration for decorating your investment property, check out these hot summer color trends from HGTV.

1. A Touch of Spring Green

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Spring Green is a vibrant mix between turquoise and sea green. This color works best as an accent when surrounded by primarily neutral colors. It can be just a pop of color like pillows or larger by choosing a furniture piece with this color. 

2. Regal Purple

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Regal purple can easily be used all year round for decor, but it especially pops during summer. You can even incorporate outside when you use fresh lilacs or liatris to accentuate the purple in the room. 

3. Blue

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Blue is a great accent color as well since it can have a masculine and feminine appeal. If you don’t want to commit to painting with this color, let accessories do the job for you. A blue rug with matching pillows and accented table settings is a great option. 

4. Sunny Yellow

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Mimic the sun’s bright hues with a shade of daffodil to brighten up any all-white room. This color pairs great with white, black, or navy and can quickly transform a space into a cheerful room.

5. Turquoise

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We already mentioned blue, but we need to mention this particular shade of blue: turquoise! This color complements mid-century modern furnishing to help give the room a retro, urban feeling. The beauty of this color is its versatility in using it by itself or toning it down with muted hues. 

6. Slate-Blue

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The opposite of turquoise is slate blue, and it’s also a great color for summer too! While not as bright and cheerful as its blue cousin, slate blue can represent coastal inspiration and ocean waves, making it a hot summer color style. This color works best when paired with neutral furniture and accessories. 

7. Yellow Green

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If you’re looking for another color to make your home pop, yellow green is the color for you! This bright color pairs well with browns and creams and can be combined with darker shades of greens as accents. Yellow green will add a whimsy, graceful touch to your room. 

 

If you need help with your rental property, contact us today! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.