Offering Multiple Months of Rent in Exchange for a Better Rental Rate - Yes or No?

Often times individuals applying for a property will offer to pay multiple months of rent up front in an effort to negotiate a better deal on a property. Doing this poses some challenges for both parties.

If you are considering making such an offer, you need to be sure you trust the landlord. If the property you are leasing still has a mortgage, there is no guarantee the landlord will apply that money towards his or her note. You may come home one day and discover the home is going into foreclosure and you have no way of recovering your money. If you do trust your landlord, then we would recommend you offer no more than three months.

If you're a landlord and you're considering accepting an offer of multiple month's rent in exchange for a lower offer, make sure you do a thorough check on your tenants. If you find yourself in the position of having to evict them, you may not be entitled to keep the balance of the rent. If you like the idea of receiving more than one month, we suggest limiting it to three months until you get to know your tenants.

Lights in the Heights

Deck the halls with boughs of holly and let the fun begin! It's that fabulous time of year when Woodland Heights hosts Lights in the Heights. I was driving around the neighborhood this weekend and saw so many people putting up their Christmas lights. This is going to be a great year primarily because the organization has made some changes to improve the event.

This year's Lights in the Heights will be held on Saturday, December 10 beginning at 6:00 pm and ending at 10:00 pm. No vendors will be permitted on the Norhill esplanade and security will be tighter. And since they haven't been widely publicizing the event, there may be fewer people attending. These changes promise to make it a cozier event.

So for those of you who do not know what this event is, here's the scoop. Woodland Heights is comprised mostly of Victorian and Craftsman Style homes. Beginning about 25 years ago, the residents began heavily decorating their homes for Christmas. They would then block off a couple of streets one evening to allow the people within the community to celebrate with one another. Each year it grew from just one or two streets to several. Recognition is offered for houses with the best decorations.

During the event itself, many homes throughout the community will be hosting musicians who will be playing Christmas music from the front porch. The style of music will be anything from 4-string quartets to jazz to a cappella. This year, rock music will not be permitted as the community wishes to keep the noise level down.

Please note, that there will be several private parties throughout the community; so be careful not to crash any of them.

Should you find you are unable to attend Lights in the Heights, take a leisurely drive through the community any night in December and enjoy the beautiful decorations; many are worth seeing in daylight as well.

Attention Investors - Potential changes in financing

The interesting thing about Real Estate is that it's always moving in one fashion or another. I have found that when Home Sales drop, Leasing rises and vice versa.

Right now, the powers-that-be in Washington D.C. are considering making it a requirement that 20% be put down on all homes that are being financed. If this bill, law, mandate, whatever you want to call it, passes the economic impact on Real Estate will be as follows.

First time home buyers will need to have saved 20% for a down payment alone in addition to any other money they will need to cover closing costs. In Houston, depending on how close you move to the city, a decent home starts around $140k. Saving $28K is no easy task, especially in today's economy. This will reduce the number of first time home buyers - and interestingly, according to Wells Fargo, this is the new sweet spot.

People have to live somewhere, so the only option they have is to either buy or lease. And home sellers will have to either drop their home prices dramatically or become landlords. Either way, if this thing passes through Congress, I anticipate the market demand for lease to go up and the supply of rental properties will not be able to meet the demand.

So, here's your gamble. If you're looking to buy up rental properties for investment purposes and you decide to wait for Congress to decide before doing anything, you can expect to see an increase in asking price for such properties if Congress decides to pass the requirement to put 20% down.

At any rate, it appears as though Congress is making the home finance business an arduous process so I don't expect it to be an easy process to buy a house any time soon.

Corporate Housing - Houston

Corporate housing is basically a furnished apartment. Initially, they were leased by corporations for their employees who were temporarily residing in Houston. Now, anyone can lease furnished apartments for a variety of reasons.

The process of acquiring a corporate rental can be rather complicated and boring. So, I'm not going to put you to sleep with a bunch of details. However, there are some basics you need to know.

1. Houston does not have an inventory of furnished rental apartments just waiting for someone to lease. These days, you pick your property and a third party converts it into a furnished unit.
   
   
2. Your options include two different types of properties: Apartment communities and privately owned properties. Sometimes private owners will have their property set up specifically as a furnished apartment or home. These are rare but they do exist.
   
   
3. Most properties require 1 year leases. There are some apartment communities that will accept shorter term leases. Most condo and hi-rise buildings do not allow short term leases. This really limits your choices.
   
   
4. A furnished unit may or may not include utilities and maid service. When negotiating for a furnished unit, it helps if you know what you need. Expect to pay about $2000 above the base price of an unfurnished apartment or home. This number can be lowered by placing utilities in your own name, hiring a maid or even reducing the number of televisions in the unit.
   
   
5. Once you find your property, you'll need to allow up to 5 business days for it to be converted to a furnished apartment.
   
   

Finding a furnished apartment can be a lot of work and very frustrating. Use a Realtor who is experienced in leasing. They can make this process easy for you and prevent you from wasting a lot of time.

Calling all Students

It's that time of year when students from local universities, such as Rice and U of H, begin seeking out housing for the upcoming school year. Often times, groups of about 4 or 6 students try to lease out a large home to live the year out as roommates.

If this is you, here are some tips to help you get the place you want.

1. It doesn't matter how smart or responsible your parents think you are, you are still just barely north of 20 years old and you're broke. For this reason, landlords are not really excited about leasing their rental property out to a bunch of kids. So, if you approach your search keeping this in mind, it will make your search that much easier.
   
   
2. There are some landlords that will lease their large homes to students; however, they are very far and few between. Once you find the property you like, you have to be prepared to pounce. You can't spend too much time thinking about it because there's another group of students right behind you vying for the same property.
   
   
3. Have all the members of your party on the same page and ready to go. The best way to start is to contact a Realtor. A Realtor will have access to the Multiple Listing Service and can help you find places for lease. He or she can screen the properties to determine which ones will accept roommates and which ones will not. Don't work with more than one Realtor, seek out one you like and have everyone communicate with her.
   
   
4. Have all the members of your party fill out the lease application early. Don't worry about having an address just yet. Tell your friends to make sure that social security numbers, drivers license numbers and birth dates are clear and legible. If your parents are going to guarantee your lease, have them fill out a guarantor form and have it ready; you don't need to give this information to anyone until you find the place you want to lease. Your Realtor can provide you with an application and guarantor forms.
   
   
5. Generally speaking the security deposit will be the equivalent of one month's rent and will be made out to the property owner in the form of a cashiers check or money order. Cashiers checks are acquired from your bank - they can explain how to acquire one.
   
   
6. Be prepared for application fees. They can range anywhere from $35 - $50/person. Those are usually required as money orders.
   
   
7. And finally, all of you should look at the properties at the same time so that you will be in a position to grab it if it looks like a keeper. If only 1/2 of your party looks and you have to wait for the other half to look before making a decision, you could loose the property.
   

Doing this work up front will save you a lot of headache. Good luck with your search and let us know if we can be of service.

The Accidental Landlord

I'm sure many of you have seen the reports that home sales have dropped in Houston. True, it's not as bad here as it is in other parts of the United States.

Even so, many home owners are either not in a position to lose money on the sale of their home or just don't want to. Still they need to move on to their new home. So, what do they do?

They lease their house instead of selling.

Many of the homeowners that take this path never planned to be here, they sort of "accidentally" got here. And the thought of being a landlord keeps them awake at night as they toss and turn envisioning their home being torn up by complete strangers.

Yes, there are risks to being a landlord. However, if done correctly, the benefits can outweigh those risks.

I've discovered there are 4 things that give a person pause when considering becoming a landlord.

1. Will my tenant pay their rent on time?
2. Will they fulfill the lease agreement?
3. Is my tenant going to tear up my property?
4. Is the tenant going to call me every day complaining about something that needs fixing?

There are things that can be done to ensure that landlords sleep at night while renting out their property.

A very good start is to hire a real estate agent to list your property for lease. Just by doing this one thing, you can eliminate people you might not want renting your property. I have discovered that people who are not comfortable having their backgrounds checked usually don't approach Realtors to assist them in their property search. Beaudry Properties checks an applicant's Credit, Criminal, Check Writing and Criminal History. We also conduct Employment and Rental Verification either in writing or through phone interviews.

We are also able to provide all the forms necessary to lease your property beginning with the application and ending with the lease agreement and all required addenda. Not only do we provide the forms we also do the paperwork for you - of course your final approval/signature is still required but you are not left to determine the process on your own.

A typical security deposit is the equivalent of one month's rent. That is usually enough to handle small repairs in the event such are required. Should your tenant have a pet, you can also collect a pet deposit.

As part of the lease agreement, the landlord can require tenants to pay upfront for repairs that are not deemed the responsibility of the landlord as outlined in the Texas Property Code.

Through our partnerships we are able to provide property management services. And our sister company, Inner Loop Landlords is just an added tool we use to market our client's lease properties.

If you think you might be an "Accidental Landlord" and you find the entire process daunting, you are not alone. Contact us and we'll help you through the process.

Inner Loop Hotspot - Zelko Bistro

I had lunch with a friend of mine today at a very quaint bistro on 11th Street @ Beverly St. called Zelko Bistro; named after it's executive Chef, Jamie Zelko. We think that Ms. Zelko is on to something here.

I've passed by this place on several occasions but haven't yet had a chance to stop by until today. One of the things that attracted me to them is that they look like a place one would find in Marfa, TX. It has a minimalist look to it. No fluff, just really good food.

The food here is very fresh and the wait staff is attentive and very friendly. I get the impression that everyone likes working there. The menu has a wide variety of food choices - it definitely has a gourmet touch to it without being over priced.

I had the fish tacos while my dining companion enjoyed a serving of their meat loaf. Both of us rated our plate a 9. My rating was based on flavor and texture of food. Lots of both.

If you would like to know more about Zelko Bistro and their menus, visit their website.

Bon Appetit.