If you are contemplating renting your home, or you acquire a residential rental property, the first decision you must make is whether to manage the property yourself or turn it over to a professional management firm. To aid you in making that decision, we have prepared these guidelines. If you are already familiar with all the aspects of managing rental properties, these guidelines will explain in detail how our firm will manage your property. If you haven’t owned rental property before, understanding all the business matters will help you decide whether to manage the property on your own or contract with Carmen Parker, ReMax Town & Country.
Carmen Parker has been serving Collin County since 1989. We are a full service real estate office with a property management service. My primary duties are to obtain maximum income and to ensure your property is well maintained. These responsibilities are carried out in accordance with the instructions and authority delegated to us in the Residential Property Leasing and Management Agreement (Attachment 1). Our principal income from this service is based on a percentage of the rents collected. Good communication between us is essential for a successful and profitable relationship. The biggest part of our job is to make sure that both you and the resident receive just and equitable treatment.
Responsible tenants are valuable assets to both of us. A satisfied tenant can bring us referral business and will be more inclined to care for your property as if it was their own. As the owner of the property it is best that you avoid direct communication with the resident and refer all inquiries to our office. We maintain a diplomatic relationship, between you and your tenant, through personal contact and in the form of our Residential Report. I also publish a newsletter to keep you advised of changes in the housing market, problems we are encountering, changes in laws that affect rental housing, etc. If you have any suggestions, recommendations, or comments you believe would be beneficial to other owners, please forward them to me and I will include them. Top
Renting of homes is a merchandising rather than a selling effort. Many residents find their homes by inspecting the outer appearance of properties in neighborhoods where they desire to live. The placement of signs with our company name and telephone number is one of our best means of attracting potential residents. The rental sign directs interested parties to our office for more explicit information. We also obtain residents from our yellow page ad in the telephone book, referrals from satisfied clients, other real estate companies, walk-in business, military housing offices, and rental agencies. With upgrades in modern technology, we have developed a web page, which provides information on rental homes to families that are planning to relocate into the Collin County area. We have found newspaper advertising in the classified columns to be an effective media for renting, since it informs the prospective resident of the availability of the property, its location, size, and rental cost. You are only billed for advertising that you specifically request; we pay for all other advertising. Top
“For Rent” signs are normally placed on a rental property thirty (30) days prior to the property’s availability date or, in the case of a new property, on the date the unit first comes under our management. Signs are placed in the yard where they are visible to traffic. Top
Before properties are shown, prospective residents are advised of available properties and specifics of each. Information given generally includes the type of unit, the number of rooms, rental fee, security deposit, location of schools, limitations placed on use of the property, etc.. Preliminary qualifying begins here. Our agent tries to determine family size and composition, rental history, current rent and desired date of move-in. This is done in the office or over the telephone and then, if the customer is still interested, one of our sales associates or leasing agents will show them the unit that meets the prospect's needs. Top
After a prospective resident has been shown a particular property and has expressed a desire to lease it, the prospective resident is required to complete our Application for Rental and addendums. Upon completion of these forms, applicants are required to deposit with our firm an application deposit equivalent to one month’s rent and a non-refundable application fee. The non-refundable application fee is retained by the company to defray the cost of processing the application. Upon approval of the application, the application deposit then becomes the security deposit for that property. Screening includes a credit report, and telephone calls to employers, bank references, and former landlords to determine if the applicant is acceptable. We also complete our credit analysis sheet. If accepted, applicants are so informed and then moved into the home based on an availability date established for the property. In-processing includes a detailed explanation of the lease, lease execution, collecting pro-rated rent, and providing the resident with a copy of our Resident Information Letter and Property Check List. Our Resident Information Letter further explains our lease agreement and provides information about rental payments, lawn fertilization and maintenance, pets, service calls/emergency repairs, check-in/out procedures, lease renewal and termination, utilities, security deposit, etc. Top
The property owner determines whether or not pets are permitted in the property. It is our job to enforce this requirement Some owners will not allow pets, others will allow a small pet, and still others have not expressed their desires. We do require a pet deposit ($200.00 for each pet); part of this deposit is not refunded, but instead is used to deflea the residence and landscape upon the resident’s departure. Some individuals consider certain breeds of large dogs to be dangerous. Since there is some debate regarding this subject, our attorney has suggested requiring liability insurance from the tenant as a means of protecting our company and the property owner. Of course, the residents are liable for any damage caused by pets. Sample pet agreement. Top
All leases are in writing and are normally written for a one year period. Longer leases are approved after discussion with the property owner. A sample Residential Lease is enclosed (Attachment 7). With owner’s approval, during slower rental periods we accept leases for less than one year in order to have the lease expire during the period of heavier turnover months. On occasion we may elect to place a resident on a month to month rental basis to accommodate the owner selling the property, a tenant’s pending departure, or moving the property into a more active rental period. Top
Unless we receive specific written instructions from you at least 60 days prior to a lease expiration date, rent increases (if any) and lease renewals will be discussed discretion (the lease expiration date is indicated at the bottom right corner of your monthly statement). When making the decision to raise or not raise rents, we consider market conditions, neighborhood conditions, resident payment history and length of occupancy, property condition, time of year and anticipated expiration date of any renewal. Any decision has its pros and cons, but all of our decisions are made with your best interests in mind. Once a lease is signed, it cannot be changed, so it is very important for you to notify us well in advance of your desire to make changes. Top
We sell homes as well as manage them for owners. When residents purchase a home prior to their lease expiration, they fall into the same category as a tenant who breaks their lease and all rules pertaining breaking a lease apply. An exception to this is when the resident is represented by me in the sales transaction. If you elect to sell as a result of this early vacancy, we will limit our payment to the remainder of time they stay in the property prorated to the day of closing. Top
A lease normally contains only one provision by which a resident can terminate his or her lease. A military clause permits military personnel to terminate the lease when they present proof of a transfer outside the Dallas metropolitan area. They are required to provide thirty days written notice prior to vacating the house. If orders are not available, a letter signed by their commanding officer will suffice. Occasionally, a resident’s civilian employer requires them to transfer to another city. In this case the resident may terminate his lease by furnishing written evidence of his transfer, and providing written notice at least thirty days prior to vacating the house. Also, if a tenant will bear all expenses normally experienced with re-letting, and pays the rent until the home is re-rented, they may be released from their obligation. Top
Eviction procedures are initiated against the residents if they have not paid their rent by the fifth (5th) day of the month. The provisions of an eviction notice can vary. Some give the resident three days to move, usually we allow the resident to remain in the house if they pay the full amount due, including any late fee. This first step is called a Notice to Quit or Vacate (NTQ). If, after approximately ten days, the resident does not respond to previous notices, we ask the court to proceed with the second step of the eviction process, a Forcible Entry and Detainer Notice (FE&D). The FE&D demands that the resident appear in court on a certain day. At that time one of our staff members appears in court to represent your interests and will make a claim for all monies due. The third and most sensitive step of eviction is what is known as asking the court for a Writ of Possession or simply a Writ. A Writ is required when a resident fails to comply with the FE&D ordered by the court. The Writ process requires us to hire a crew to set a resident’s belongings at street side, or in storage during inclement weather. When you have monetary damages as a result of this process a judgement is issued by the court. We file the judgement in the applicable county records and with the credit bureau. On the average it takes about thirty days to evict a resident, and hopefully this will not happen with your property. If the eviction is especially touchy OR for a reason that does not include non-payment of rent, the service of a licensed attorney may be required to represent you. The attorney’s fee will be billed to your property. Please remember, you not only have lost substantial rental income but have also incurred approximately $200.00 in legal expenses and possibly even a larger sum for repairs. Top
Our lease agreement contains a clause which gives us authorization to take possession of the property and cancel the lease if the resident has abandoned the premises for 5 consecutive days while in default. Household and personal items left behind by the resident will be considered abandoned property and will be disposed of by our staff. Any further claims on the abandoned property must be handled by the court. Top
Anytime you desire to do an interior inspection of the property, we must give the resident advance notice. In an emergency, however, the lease agreement permits us to inspect or make repairs to the property at all reasonable hours. Remember, we cannot dictate how the resident keeps the interior of the house. We do perform drive-by inspections of the property to ensure the yard and exterior are being cared for. In the event the exterior is being neglected we call the tenant for a walk through and interior inspection of the property. We send a notice to the resident asking them to cure any noted deficiency. On more serious violations we will inform you of the problem and recommend what corrective action should be taken. Top
When a resident is accepted and a lease agreement has been signed, arrangements are made to check the new resident into the property. At the time of check-in, one of our staff will explain the lease agreement and answer any questions the resident might have about the property or lease. We also provide a copy of the most recent inspection. At this time the resident signs the Property Check List acknowledging the condition of the property. The resident is then allowed seven days after move- in to notify us, in writing, of any defects/discrepancies not listed on the Property Check List. Any items requiring immediate attention will be repaired at the property owner’s expense. This same Property Check List and the Resident’s seven day counter to this check list form the basis and guide for the resident’s move- out inspection. Any defects not noted on the list are brought to the attention of the resident and our staff determines whether the defect is a result of normal wear and tear or negligence. The cost to repair any damage caused by negligence is deducted from the resident’s security deposit. Top
While a home is unoccupied, periodic inspections are made to see that lawns and yards are maintained, the property is presentable, and that no vandalism has occurred. During periods of vacancy, our staff cannot accomplish the task of watering the lawn and shrubs. This is physically impossible for us to do. If this service is desired, we will assist in contracting for the service at your expense. When we have extensive repairs or painting to do, we will ask the assigned contractor to assist in watering.
As a service to our residents, we provide a voice mail system for residents to use for routine maintenance and repair requests. While the property is occupied, the residents are requested to notify our office of any problems. If the estimated cost to repair exceeds the maximum that is allowed in the Residential Property Leasing and Management Agreement, the owner is contacted for permission to make the necessary repairs. We realize it can be rather upsetting when you receive an unexpected bill from us for repairs made to your property; however, some repairs are urgent and must be corrected immediately. Emergency repairs are made in accordance with our Residential Property Leasing and Management Agreement. Normally, the residents pay a portion of the repair expense. However, if in our opinion, the expense was due to their negligence, the resident will be billed and become liable for the entire amount. We will keep you informed of the status and condition of the property you have entrusted to our care. Periodic inspections of your property will be made and a report will be sent advising you of any corrective action we recommend.
On any major repair we will normally obtain at least two bids from reliable contractors. We will send these bids to you or call to discuss them. We ask that you make a timely decision or provide our staff with firm guidance. The bid process is already a timely process, so we need to eliminate delays. You will be asked to forward us a check for the cost of the repair before the work is started. It is our policy to use only reliable contractors that do professional work at a reasonable cost. We have used some of our contractors for several years and have found their prices very competitive. However, you can be assured that the cost and quality of work will be competitive with other like contractors. Some property management companies charge owners a service fee based on a percentage of the total cost of any repair we do not! Only when an expense exceeds fifty dollars ($50.00) will a copy of the repair or utility bill be enclosed with your monthly statement. An explanation/comment will be entered on your statement explaining the type of work/repair accomplished on the property. Billing for repairs will be made directly to our company. We then bill the entire amount to the owner’s account. As residents are billed and reimbursements are received, the owner’s account will be credited with the amount of reimbursement; this will appear on the statement as “Maintenance Payment". We require owners to deposit $250.00 in a maintenance account upon signing of the Residential Property Leasing and Management Agreement. Top
Texas law requires all security devices operated by key, card, or combination to be rekeyed by the owner at the owner’s expense, no later than 7 days after a new tenant has moved into a rental property. When no locking devices presently exist on exterior doors and windows, the owner is responsible for the entire expense to have locks installed according to code. When locking devices are already installed and a resident desires additional locking devices, the cost will be borne by the resident. Any rekeying of existing locks after the initial rekeying will be at the resident’s expense. The state law requires that each door to the exterior from the living area meet specific requirements regarding locks. Simply stated, when inside the residence, a person with a key must not be able to gain entrance. Also, sliding doors must be equipped with pin locks and “Charlie Bars.” Also, a “peep” hole/door viewer must be installed on all exterior doors, unless the door has unobscured glass. Top
We maintain strict control of all keys. All keys issued to residents or repairmen are documented. As a minimum, we need three sets of keys to the property. Two sets are provided the resident and one set is maintained in this office. Top
Texas law requires all rental units to contain at least one smoke detector/alarm per floor. If your property does not currently meet this standard, it must be brought into compliance prior to occupancy by the resident. You may be required to have a smoke detector in each bedroom. Top
Unless otherwise stated in the Residential Property Leasing and Management Agreement or restricted by property limitations, all utilities used on the premises are paid for by the resident. New residents are advised to notify the appropriate utility companies to have service turned on in their name. Top
You should advise your insurance company that the property will be a rental unit. Insure that you have adequate property and liability insurance coverage. Texas insurance regulations require that any existing homeowner policy be cancelled. In order to protect your investment the amount of insurance should equal the replacement cost of the property. IF YOUR RENTAL PROPERTY IS VACANT BEYOND 60 DAYS, REQUEST THAT YOUR INSURANCE AGENT ADD A VACANCY CLAUSE TO YOUR POLICY. WITHOUT THIS CLAUSE YOUR INSURANCE IS INVALID. We also recommend a Physical Loss Form (PLF) 148 which extends your named peril policy (Fire and Extended Coverage) to an all risk policy (with limitations) and some form of personal liability coverage. The Residential Property Leasing and Management Agreement requires the owner to carry insurance adequate to protect all parties. We also urge each owner to obtain liability insurance coverage. Many homeowner’s policies allow you to extend the liability coverage from that policy to your investment/rental properties for a small additional premium. We must be provided copies of such coverage no later than thirty (30) days after signing the Residential Property Leasing and Management Agreement. In 1998, a new type of insurance policy was approved by the State Board of Insurance. The new policy, a Residential Dwelling Policy (RDP), includes liability insurance but removes some water coverage. To satisfy yourself that you have adequate coverage we recommend you contact your insurance agent for specific details. Top
Please be sure to change your mailing address with your County Appraisal District. We will then forward any notices we receive. We also suggest that owners converting a personal residence into a rental home remove the homestead exemption they have. This will avoid a potential conflict with subsequent notices of underpaid real estate taxes. For a small additional fee that can be negotiated separately, one of our agents can represent you at Appraisal District (AD) valuations on changes in property values. Remember, it is the AD value that determines your annual real estate taxes due. Top
The following is a schedule of our management fees.
|If you own:||the fee will be:|
|1 or 2 properties||10% (or a minimum of $40 per month when rented.)|
|3 or 4||9%|
|5 through 10||8%|
|11 through 20||7%|
|21 or more||Negotiable|
Unless otherwise negotiated in the Residential Property Leasing and Management Agreement, we charge one-half (1/2) of any late fees collected on late rent, plus a leasing fee of 10% of one months contract rent for each new resident. No initial set up fee is charged. We charge a fee when we send your tenant a Notice to Quit (NTQ), or file a Forcible Entry Detainer (FE&D) or Writ. No rental management fee is charged while the house is vacant and not earning rental income. We also charge 10% of any insurance loss that is managed or handled. Top
Our objective is to get your statement in the mail on or about the 12th of each month, unless the rent is late. That’s the reason we use the 20th -- in case we do encounter problems. If you have not received your statement by the 20th of each month, please call, but calls prior to the 20th will just delay the processing of your statement. Your cooperation will be greatly appreciated. We request that if you have an unpaid balance that it be brought current within thirty (30) days. Accounts in arrears more than thirty (30) days will be charged 10% interest on the unpaid balance. Top
Yes, your property will rent at the 10% leasing fee since we have the means of making it available through other avenues other than just through the Multiple Listing Service (MLS) (i.e., yard signs, referrals from previous and current residents, newspaper advertising, etc.). But, as you know, the more prospective renters that see your property, the better chance it has of renting. Normally, there are three factors that make a property difficult to rent: undesirable neighborhood, it does not show well, or the rent is not competitive. If one of the last two problems appear to be a factor in marketing your property, we will make suggestions to correct them. We do our utmost to keep all properties rented since our income is based on percentages of rental income. Top
The security deposit is one full month’s rent and is collected when the resident makes an application to rent the property. If the rental application is approved, the deposit is retained by us in an interest bearing account until the resident departs from the property. On departure the deposit is returned to the resident if all provisions of the lease agreement have been met. Interest accrued on the deposit will be retained by our firm. Payment for damage to the property, due to neglect by the resident, is deducted from the security deposit and credited to your account. Any deductions from a deposit must be supported by copies of bills for the expenditure, or otherwise authorized in the lease agreement. Top
Prior to placing a property on the rental market or renewing a lease, we determine the most economic and profitable rental rate that can be charged. After a property has been exposed to the market for two weeks without renting, we look into the possibility that the asking rent is too high and consider lowering the rent to an amount that would make the property rent. At times we may offer the resident some “free” rent for performing some maintenance or yard work or as an incentive to rent the property. We have found this to be very beneficial in obtaining residents in a “slow” rental market. When the property is occupied, this is reflected in the monthly statement as “Rent in lieu of". Top
Rent payments are due on the first day of each month. If a resident moves into a property during the middle of the month, rent for the month will be prorated and the rent for the following month will then become due on the first, along with all of our other rental accounts. Periodically a resident who is having budget problems asks that we permit payment of rent off this regular schedule. Based on individual circumstances we may authorize off schedule payments. Top
Failure to pay the lease payment prior to 5:00 p.m. on the fifth day of each month requires the resident to pay the late fee as stated in their lease. The late fee is collected at the same time as the monthly payment, and you will receive credit for one-half of any late fees we collect. When the resident fails to include the late fees with their rental payment, your income for the month will be short. This shortage occurs because our procedure is to credit all payments to non-rent charges first, including late charges. The Justice of the Peace (JP) court system will permit us to evict for non-payment of rent only. Because of this eviction restriction we must collect the delinquencies first, as the unpaid amount will then be for rent only. Hopefully, you will receive the balance of your income in the next monthly collection cycle.WE DO NOT INDEMNIFY YOU AGAINST ANY LOSS OR EXPENSE DUE TO VACANCY (for any reason), UNPAID RESIDENT CHARGES, ATTORNEY'S FEES IN THE PURSUIT OF A RESIDENT, OR THE COST OF MAKE-READY. Top