All Forum Posts by: Steven Woon

A word of caution. Leasing a house you do not own may require an active real estate licence in your state. You can probably get away with this (I am not an attorney) if the owner is actively involved in showing the house and negotiating the lease. Also, lease agreement has to be drafted by an attorney or the owner.

Property management involves renting, leasing and holding security deposit. Thus, the property manager will need to hold an active broker license. Suggest you contact your state real estate license board to see what remedies are available. If property manager does not have the necessary license to conduct real estate activities, then he or she is breaking the law. I would then consult an attorney.

I believe only the building portion of the total property cost basis is depreciated.  For example, if land is accessed at $100,000, only the building cost of $175,000 is to be depreciated over 27.5 years.

If this is your first time, get help from an attorney, unless you are absolutely well-informed about local laws regarding tenancy.  Or at least seek help from a local real estate agent who has done several leases before.   Your local agent may have promulgated forms created by attorneys licensed in your state that he/she may be able to fill out for you.

In Texas, if you do not own the properties that you are managing, and if you involve yourself in any activities related to leasing, finding tenants, showing properties and negotiating leases, you need to have an active real estate license.  I believe this is the same for other states.

Originally posted by @Fred Heller:

In Texas the combined mortgage and HELOC cannot exceed 80% of the appraised value of the home. Sounds like you have enough equity to get a nice line of credit but you can't get 100%.

I took out a HELOC on my primary residence early this year and my lender told me that Texas only allow a maximum of 50% of estimated value. I mentioned "estimated" because I did not have to hire an appraiser. 80% of appraised value is only for fixed term loan.

Maybe some lenders can combine HELOC with mortgage to make 80% but they may be skirting around the rules.

Last month, bought a four-unit multifamily for $300k+ with a 75% 30-year conventional mortgage.  My fixed term interest rate is 4.25% from BB&T.   FICO score similar to yours. You definitely need to shop around or negotiate with your lender.  Initially, BB&T quoted higher, but I threatened to go with my credit union which gave me the lower rate.  They finally relented.

BTW, my pet deposit is always refundable after accounting for any cost to fix damages caused by the pet or owner.  So it is not a fee.

Oral agreement does carry some weight in Texas, so I regularly emphasis to people I come to contact that nothing is firm unless it is written and agreed to.  In my leases, there is a standard statement that reads

     "There are no oral agreements between Landlord and Tenant."

Your term is two months deposit TODAY but the countered with one month deposit today and another month in August.  As far as I am concerned, they did not accept your offer as is, so I guess you could "legally" move on if this is what you want.

The pet deposit I charge (depending on the property) is typically $300 to $800 and an extra $20-30 a month for each "approved" pet.  Prior to having potential tenants fill up an application form, I get them to read and acknowledge a copy of my "Tenant Selection Criteria" which specifies all these, so they cannot claim ignorance if I ask for such payments when they are selected.

One of my tenants did the same - painted a room and added a pink "strip" pattern in the kitchen.  When I found this out, I issued a "Notice to Vacate" form for breaching lease agreement, which does not allow any alteration without landlord written approval.  He called and negotiated, saying he will revert back to the original color when he moves out.

I got upset because I have a specific color theme for all my rentals, i.e. neutral off-white in almost all areas.  The greater issue is, I do not want anyone to use cheap paint that is either environmentally unsafe, or does not last or is not as easy to wipe clean.

In the end, he agreed to repaint the whole house at his cost when he end his tenancy and I insisted that he uses only the paint that I specified.  BTW, it does help that he does painting part-time and I can look forward to getting my unit painted at no cost when he leaves.

Thus, my advice is, if the lease agreement specifically forbid certain actions such as no alteration, then we have to be firm with the tenant, either giving him a written warning or even eviction.  My point is, we have to be CONSISTENT in our response to these disallowed actions.  Allowing certain actions that is specifically not allowed in the lease agreement without written approval may give the impression to the tenant and if ever, the judge that you have given the tenant IMPLICIT waiver for these and possibly other actions in the lease agreement.