Renting Your Home
In a real estate market that has an enormous cash flow opportunity for rentals, we see more and more homeowners choosing to lease their homes out as they purchase their “move up” home. With record low interest rates over the past several years, especially on 15 year notes, this creates a wealth building opportunity for homeowners.
As this trend has gained traction, it has created an obvious vacancy for tenant procurement in our marketplace. You can find property management companies that will put it in the MLS for you but are they willing to answer their phones or drive out to show the home? Often times these companies are located far away from the property which means two things. First, the property manager could quite possibly have no clue about the rental market where your home is. Second, they’re not going to be very motivated to show your home to potential tenants. That leaves potential tenants with trying to find an agent to show rental properties. The problem with this is that often times, it’s new agents that are willing to show rental properties due simply to the fact that based on pay per hour on rentals, the revenue to the showing agent is very low. What this means for you is that your home could be shown to unqualified tenants because their “new-by” agent didn’t know enough to pre-qualify them before taking them out.
I would say that 90% of our lease showings on our tenant procurement homes come from Trulia.com, Realtor.com and Zillow.com. These are consumer inquiries that come in for free of people requesting to view your home. We pre-screen each and everyone prior to showing them your home to ensure that this home could be a great fit for them.
Once the property is shown and they’re interested, we have them complete a Texas Association of Realtors Residential Lease Application as well as submit their last 30 days of paystubs and copies of their current driver’s license. With the information from that, we perform a background, eviction and criminal check that’s cross referenced with the National Terror List. Once this information is back, we decide whether or not to move on with the approval process. The next steps are that we verify their employment, last two year’s of rental or ownership history and check personal references. Once all of this information has been gathered, we will put together a package of information to you with our recommendation of the tenant but you will have the ultimate decision on whether or not to allow them to lease your home. We are a fair housing advocate and we do not discriminate against any applicant or tenant based on race, creed, color, religion, national origin, handicap or family status.
Once they’re approved, we have them in to our office to sign the lease and put down their security deposit. The security deposit is at least equal to one month’s rent. This is to ensure that they act in good faith during the term of their tenancy and also that they leave the property in the same condition that it was received. If they have a pet, their non-refundable pet deposit will also be collected at this time.
The majority of families and singles have pets. We prefer to advertise that pets are negotiable, so that they will tell us about the pets when they apply instead of trying to sneak them in later. Each pet will require an additional non-refundable pet fee. These costs are negotiable by you, the homeowner. If damage exceeding the pet deposit occurs, you may withhold funds from security deposits. You are in no way required to accept pets, this is completely your decision.
On the day that they take tenancy, we meet them at the property at 9 a.m. to perform a walk through of the property where they will complete an Inventory and Condition Checklist. This checklist will allow them to notate any current flaws, damage or issues prior to move-in. While they complete the checklist, we accompany that list with photos of the entire property. Both the homeowner and the tenant will be given access to these photos as well as the checklist to reference upon move out. Normal wear and tear is expected in a property so long as it is not from neglect or damaging to the property.
Once the tenant moves in to the home, you are now their point of contact. We do not manage homes on a monthly basis. However, if this is something you’re interested in, we do work hand-in-hand with a local property management company that handles day to day operations of managing tenants, repairs and maintenance for you. They generally charge 10% of each month’s rent for their service.
If you choose to manage your home yourself, we do recommend purchasing a home warranty. A home warranty covers all of the major mechanical appliances and issues in a home for the cost of around $400/ year. Should you need to utilize the warranty, they typically charge a $69 call fee to repair/ complete the work. We also have a list of vendors that we refer out and we’re happy to provide you with that list or contacts as you may need them.
If you’re looking for a company with a proven track record of finding well-qualified and quality tenants, give us a call. We’ll be happy to discuss this program in detail with you as well as let you know what your home will bring in monthly rent in today’s market. Visit us at www.HomesbyHornburg.com for more information or call us anytime at (817) 771-0998.