Austin Property Management Blog

Factors to Consider When Screening Tenants

System - Wednesday, September 19, 2018

The number one choice that you as a landlord will make for your rental property is who you decide to let rent your place and become your tenant. No other decision you make for your property will affect it’s outcome as much as who you decide to rent to. Placing the right tenant in your property will help turn your property into a residual income machine, but placing the wrong tenants can tie your property up and cost your thousands of dollars. Avoiding scenarios such as unpaid rent, eviction fees, turn-over costs, and expensive property repairs should be key points for you when deciding on tenants, and can persuade you to hire a property manager.

When it comes to leasing your property and screening tenants some factors outweigh others. Below are important factors that should be considered first when screening potential tenants.

Rental History

People usually consider income or credit to be a more important factor in screening your tenants, but don’t discount a tenant and their rental past. A strong rental history shows that a tenant can be trusted by rental owners and shows that they can build a good rapport with paying rent on time. They might have the income your looking for and a credit score that meets your criteria, but if their rental history is full of evictions, late payments, behavioral issues, etc then you are better off finding a tenant you’d feel more confident with.  

Income and Employment

Unless otherwise stated, no income for your tenant means no rent money headed your way at the beginning of the month. Typically, landlords should look for tenant’s who make at least 3x the monthly rent for the home. However, verifying they have a strong employment history is also a key factor in screening your tenants. Maybe their income is high but they have a track record of short job durations and they’ve only been working at their current job for the last two months. While this potential tenant meets the criteria, you’re better suited to trust a tenant with a strong employment background that demonstrates the ability to stay somewhere for long periods of time. They are less likely to default on their lease due to non-payment or some other issue.

Credit Score

When looking over potential tenant’s credit history, understand that people can have low credit scores for a variety of reasons. Let’s say, for example, that the tenant’s you are screening have a low credit score due to a foreclosure on their past home. These tenants might have an excellent income and employment history and only made the mistake of purchasing a home out of their price range in the past. You wouldn’t necessarily hold this against these tenants as it doesn’t necessarily show as a massive red flag for a landlord. Instead, keep an eye out for large amounts of credit card debt or an extensive history of late payments – those are the red flags to look out for!

Criminal History

Just like the credit score scenario given above, criminal histories are not all the same and can have varying scenarios. Investigating further into any the nature of the crimes can help you better understand the tenant you are working with. For example, non-violent run-ins with the law may not have any relevance for your tenant to pay their rent on time. As the owner, its well within your right to not rent to a tenant with a criminal background, but if everything else checks out in their background you may consider giving this applicant a chance. Of course, automatic rejection should be given to those you don’t feel comfortable living in your property.

If you’re unsure on the process or feel you don’t have the resources to perform a property screen of a tenant, consider working with a property management company, if only just for the leasing of your property. Property managers have tools and systems in place to ensure your property finds quality tenants and you continue to earn rent every single month!

[Featured] 8400 Harrier Drive, Austin

System - Wednesday, September 19, 2018

8400 Harrier Drive, Austin, Texas 78729

1,561 SF | 3 Bed | 2 Bath

Austin Home for Rent

Why Renters Insurance is Important for Your Austin Rental Property

System - Tuesday, September 11, 2018

Off the top of your head, can you think of a homeowner you know who doesn’t have homeowner’s insurance? More than likely you can’t. If they have a mortgage then the lender who provided the funding would have required them to have it. If anything were to happen to the home the lender’s money would go down with it. It makes sense as it gives everyone involved protection as well as peace of mind.

While homeowners insurance is important to have on your Austin home, renters insurance is just as important if your home is occupied by tenants. Not only does it protect your renters and their possessions in the event of an emergency, but it also protects you – the landlord.

Damages to your tenant’s personal belongings is not covered under your homeowner’s insurance and will leave your tenant’s liable for replacing everything out of their own pocket. Renters insurance would cover all of this for your tenant and even replaces your tenant’s belongings even when a burglary happens in a place other than the home. When you don’t require your tenants to purchase a renters insurance policy this can lead to trouble. If damages to their property happen within their home and they aren’t covered they may try and claim some responsibility for the damage on the landlord’s end.

The important thing about renter’s insurance for your Austin rental property is the liability coverage and the benefits it provides to the owner of the home. Without renters insurance you could be on the hook for the cost of damages and repairs for your property. The great thing about renters insurance is that it covers the deductible for the landlord’s homeowner insurance which can be a sizable amount. Another added benefit of requiring renters insurance for your Austin rental property is that it can help weed out bad tenants.

If you have any questions about renter’s insurance or how to include this requirement in your residential lease don’t hesitate to contact our Austin property management team.

Austin Home for Rent: 12716 Cardinal Flower Dr

System - Thursday, September 6, 2018

12716 Cardinal Flower Drive, Austin, TX 78739

South Austin Rental Home

[Featured] 4202 Knollbluff, San Antonio

System - Wednesday, September 5, 2018

4202 Knollbluff, San Antonio, TX 78247

San Antonio Home for Rent

Reasons Not to Return Your Tenant's Security Deposit

System - Tuesday, September 4, 2018

When a tenant moves into your rental property, they normally will pay you or the property manager a security deposit. This amount is normally equal to one month’s rent and is held by the landlord/manager until the end of the duration of the lease. In Texas, landlords or managers are required to return the deposit within 30 days of the tenants move out. However, there are a few scenarios where the landlord is given the right to retain this deposit.

Nonpayment of Rent

Most states, including Texas, allow the landlord to retain the security deposit in the event your tenant begins to forego paying their rent. Your tenant, by definition, is contractually obligated to pay their monthly rent and failure to do so entitles you, the landlord, to keep the amount equal to past due rent.

The Lease is Terminated Early

If your tenant decides to terminate their lease before it expires you have the right to retain all or part of the security deposit to cover any costs associated with the lease. The specific wording may vary across lease agreements so double check yours to make sure you are entitled to this. A typical Texas Association of Realtors lease will have a clause written in it protecting the landlord in the event of a lease termination.

Damage to the Property

Damages to your rental property entitle you to retain your tenant’s deposit. However, normal ‘wear and tear’ cannot be held against the tenant nor any amount deducted from the deposit. Any damages that are caused by the tenant are covered by your security deposit you have on file. Damages usually consist of the following:

  1. Holes in the walls
  2. Stains or rips in the carpeting
  3. Water damage to hardwood floors
  4. Cracked or missing countertops
  5. Broken windows or doors

These are some of the usual damages landlords might experience with their property, but is definitely not a complete list. If a tenant damages your property and you intend on using the deposit to cover the damages be sure to keep an itemized list of the work that is done so that you can prove where the funds went.

Cleaning Costs

Cleaning for things considered normal ‘wear and tear’ isn’t allowed to be deducted from your tenant’s security deposit. However, if the cleaning goes beyond this normal wear and tear you are entitled to utilize the security deposit to cover these costs. If a tenant leaves their trash bagged up in your house this would not be covered under this. Let’s say the tenant instead threw a large party and there is trash all over the floors, your carpets are a completely different color and the place is a wreck. A situation like this would entitle you to deduct these cleaning costs from the security deposit. It’s good practice to photograph this in the event the tenant tries to dispute the charges.

These are just a few examples of situations in which your tenant’s security deposit can be used and deducted from. Have a situation that you’re unsure of and want to speak with a professional? Our property management team would be happy to assist! Give us a call at 512.617.6766 to speak with a property manager today.

Austin Home For Rent: 1011 Muse Lane #17

System - Friday, August 31, 2018

1011 Muse Lane #17, Austin, Texas 78702

Austin Rental Homes

Pflugerville Home for Rent: 16705 Bridgefarmer Blvd

System - Tuesday, August 28, 2018

16705 Bridgefarmer Blvd, Pflugerville, TX 78660

Pflugerville Homes for Rent

Manchaca Home For Rent: 11328 Autumn Ash Drive

System - Wednesday, August 22, 2018

11328 Autumn Ash Drive, Manchaca, TX 78652

Austin Rental Homes

Mistakes Made by DIY Austin Landlords

System - Thursday, August 16, 2018

Working as a property manager, it’s easy to think the job won’t be that hard and that most of what you’ll be doing is collecting rent payments. Then you come to find out that property management is much harder than first anticipated. Part of any venture in life is learning from your mistakes and as a property owner in Austin, Texas, this includes you. Here we’ll go over some of the mistakes to avoid if you choose to self-manage your Austin rental home.

keys in austin rental home door

Charging too much or too little

If you’ve chosen to work with an agent to help lease your property this shouldn’t affect you too much. However, let’s imagine you’re choosing to find a tenant for your property on your own. You post ads for your property to the usual sites such as Craigslist or Facebook, but is this helping? You might find a tenant, but do you know how much to charge them? Realtors have access the MLS which houses a lot of real estate data, some which is important in this situation. Working with a property manager would have allowed you to run comps in your area to accurately pinpoint the amount you could charge for your Austin rental home. Self-managing owners do not have this luxury and instead price their property on their own. How are you to know where the market stands in your neighborhood year after year? You could compare yours to other listings you find in the area, but this doesn’t reveal the bigger picture and the homes your comparing to could be significantly different than your own. Your best bet is to consult with a Austin property manager and see if they will run comps for you. They are happy to help and it’s a great relationship to build as you never know what will happen in the future that doesn’t allow you to manage your home anymore!

Failure to Keep Up with Maintenance

How-to videos on YouTube do help, but that’s no way to get things done when your tenants are facing an emergency situation during the hot summers of Austin. If you’re an owner who likes to take it upon yourself to address and repair any issues because you think it will save you some money be careful that you are prepared for and knowledgeable of the task at time. Tenants like to know that their issues are addressed as soon as possible and the instant your great tenants begin to think maintenance takes to long for their home they will start to look for other rental options in Austin.

Addressing Tenant Issues & Evictions

One of the biggest problems with self-managing your Austin rental property is the relationship you might build with your tenants. Everything is good, until it’s not. The problem with DIY Austin landlords is that they often try and befriend their tenants instead of approaching it like a business. When a tenant is non-compliant or in violation of their lease it may be your first instinct to try and work with them. This can lead to many things such as the tenant taking advantage of the friendship you’ve built. The instant any tenant is in violation of their lease you need to be ready to start the eviction process. Your relationship with your tenant can get in the way of this and the longer you let issues last the harder it will be to evict them. Avoid any bad habits such as partial payments. Those payments usually take longer and longer…

You Haven’t Factored in all Expenses

Managing your property is not cheap! DIY Austin landlords seem to think that they will be saving lots of money by not hiring a property management company in Austin, Texas to handle their management. However, you won’t be offered the same rates from vendors the property manager would and this alone can add up significantly over the course of a year. We regularly work with owners who struggle with the finances of their property and estimating the true cost that goes into managing your Austin rental home.

If you’re struggling with any of these issues please don’t hesitate to contact our Austin property management team!

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Stone Oak Property Management
13497 N Highway 183, Ste. 700
Austin, TX 78750

Phone: 512.617.6766
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