7 Real Estate Investment Mistakes

7 Real Estate Investment Mistakes

1. Are you hiring a real estate sales agent to manage your property?

• Even though an agent may be perfectly qualified to sell you a home, they certainly don’t specialize in property management. Many agents are unaware of the specific legal policies that could cost you thousands of dollars when a problem arises. Hire a Professional Property Manager.

2. Are you hiring companies that only do leasing and not property management?

• Even though an agent may be perfectly qualified to sell you a home, they certainly don’t specialize in property management. A typical real estate agent wants to lease your home and move on to the next deal. Companies who only do leasing have a primary motivation to lease to the first person who walks in the door. Without managing the property, they have no feedback as to how a particular type of tenant behaves over time. Their motivation is not to find you the best possible tenant. They do not care if they leave you with a problematic tenant. A property management company has a vested interest in finding you the best tenant for your home. Click Here for more information.

3. Not updating your mailing address with the Harris, Montgomery, or Fort Bend County Appraisal District.

• One of the mistakes that homeowners and investors make is failing to update their mailing address with the Bexar County Appraisal District or removing the Homestead Exemptions or other exemptions from the property that they are no longer or not eligible for. When you buy a new rental property or move from a property and convert it into a rental property, you need to update your mailing address with the Harris, Montgomery, or Fort Bend County Appraisal District and remove any exemptions that you have that you are no longer or are not eligible for. Also, many times, we have Deeds or other legal or important documents being mailed directly to the rental property. Some tenants do bring the documents, but most do not. By keeping your mailing address current with the Appraisal District, you can save yourself lots of frustration and or money.

• To check to see what mailing address the Harris County Appraisal District has on file for you, go to their website at http://www.hcad.org and go to the property search to see the mailing address on file.
• To check to see what mailing address the Montgomery County Appraisal District has on file for you, go to their website at https://mcad-tx.org/ and go to the property search to see the mailing address on file.
• To check to see what mailing address the Fort Bend County Appraisal District has on file for you, go to their website at https://www.fbcad.org/ and go to the property search to see the mailing address on file.
• We also suggest Owners converting a personal residence into a rental home remove their Homestead Exemption. Failure to do so can cause a potential conflict with underpaid Real Estate Taxes. (Check with the appraisal district to ascertain whether or not you must remove your Homestead Exemption)

4. Property Manager Listed as Additional Insured

• Did you know that The TEXAS ASSOCIATION OF REALTORS® Management Agreement requires you to list your Property Management Company on your policy as an additional insured? If you don’t have this protection, you are violating the contractual agreement between you and your Property Management Company. This protection is provided for FREE by many reputable insurance carriers. Click here for a list of Insurance Agents.

5. Not Charging Fair Rents

• Vacancies, turnovers, and lease terminators are your biggest expense. Charge fair rents, treat your tenants with respect and respond as quickly as possible to their needs. It is a lot less costly in the long run to take care of the little problems rather than wait until they become big problems. The vacant property is your Achilles heel. RentLife® Property Management utilizes all of their experience and available marketing strategies to lease your home.

6. Not thinking twice before you refuse to settle a dispute with a tenant.

• It is almost always better to resolve a dispute with a tenant (even if it’s not exactly the best deal for you) than to fight it out in court. The landlord-tenant laws are usually incredibly unfair to landlords. In addition, tenants often have access to free “legal aid” lawyers who will fight you with tax-and-charity dollars almost indefinitely with all the laws on their side. In the end, it may cost you thousands. It’s not worth it just to win a point of pride. Usually, the only time it is really important to fight to the end is to get rid of a non-paying tenant. Even then, a settlement where you pay them to leave may be cheaper than paying even more attorney fees to fight to the bitter end. Mark Kallus and his RentLife® team are skilled and experienced to help you navigate the stressful disputes that investors occasionally experience.
• Houston’s Local Property Management Experts can help you with the tough decisions.

7. Failure to Re-Invest in Your Assets

• Most successful investors have well-maintained properties. Be sure to re-invest some of your cash flow back into clearing any outstanding maintenance problems there might be on the property. This increases the value of your asset and increases your equity, which builds your net worth. Here at RentLife® Property Management, we pride ourselves on having skilled and reasonably priced contractors who have been vetted and screened.