Monthly Owner Distribution
Monthly proceeds checks are checks paid to the owner of the property minus any expenses, such as related maintenance or make ready costs. They will be paid within the last 5 days of each month.
Expenses that we don’t pay are expenses that could affect your credit rating. Those expenses are mortgage payments, HOA payments, insurance, or taxes. The items could adversely affect your credit if we make a mistake. We do not want to be responsible for that to occur.
We strive to provide detailed reporting to each investor. You will notice that we allocate income to individual accounts that will clearly reflect what each expense was for. If your expense is higher than our $500.00 reserve, you will be notified and we will seek approval before we proceed. If your expenses exceed your monthly income, we will contact you for payment of those expenses. Payment must be made within 7 days to avoid penalties and interest. We are prevented by law from withdrawing money from our Security Deposit Account if your portion of that account does not have sufficient funds. We will ensure that you are fully aware of the higher expenses and discuss options with you.
Management fees are deducted from your monthly owner distribution check each month. If there is not enough funds we will submit an email to you requesting funds.
Rent Payment allocations. Our Residential Lease agreement allows for us to allocate monies received to the oldest unpaid charges. Charges, such as Late Fees, lease violation fees or damages before we apply money to the current rent. These allocation will also benefit you in court, should we have to file eviction. The justice courts will only allow recovery of pure lived up rent that is delinquent and the judgement amount will only include rent.
Management Fee on Vacant Properties
If your property is vacant you will not be charge a management fee. Management fees are paid off of collected rental income. A vacant property will affect us all. This not only affects the investor but it affects our managers and leasing agents. If you don’t collect rent we don’t get paid either. This helps promote production and gives us skin in the game.
Property Reserves Required
We require a reserve to be held with our company of $500 per property. This reserve funds are maintained to allow for emergencies such as, A/C repair, water damage, broken pipes just to mention a few. If the funds become low we will replenish them from the monthly owner distribution
The reserve funds are fully accounted for on your monthly financial and held in a insured bank account.
Tenant Security Deposits
We account for the security deposit from your tenant separately as reflected on your owner’s statement. When a tenant submits their notice to vacate, we send them our move out process which informs them of the potential cost for repairs that are considered beyond normal wear and tear. After completing the move out inspection and make ready, we process the security deposit disposition and deduct all costs that are considered “beyond normal wear and tear” to the property, as well as, any outstanding rent charges from the security deposit. The tenant is issued their security deposit refund, and any damages deducted from their deposit will then be transferred into your operating account and reflected on your financials at the end of the month.
Pursuant to your residential lease agreement, rent is due on the first of each month and is considered past due at midnight on the third day of the month. Three day notices are mailed on the fourth of the month advising the resident they are in breach of their lease and payment must be made immediately. These notices are sent via certified and regular US Postal Mail service. If payment is not received within ten days of sending the notice we file eviction proceedings on the eleventh day of the month. Depending on the justice court’s docket in which the eviction is filed, a court date will be set within eleven to twenty-one days of the filing. Eviction filing fees can exceed $200 in some counties. These fees are the responsibility of the resident. The preliminary fees are charged to the owner account and then collected back from the tenant either through their security deposit or through collection efforts.
Eviction 2nd Step
Once the eviction is granted in favor of the Plaintiff (landlord) a judgment is entered on the resident’s credit report. This judgment can stay on a resident’s record for 10 years and might make it difficult to obtain future housing and credit. The resident has five days to vacate the property; otherwise, a writ of possession can be applied for through the court that allows the owner to remove the resident and their belongings from the property.
Rental Analysis and Lease Renewals
Your lease rate is going to be determined by several factors including the condition of the property, location, and the rental rates for competing homes in the immediate area. The markets that dictate lease rates vary vastly from the markets that influence the value of properties. Our Renewal program is ongoing in the fact that we strive to maintain the properties in the highest level possible. We provide courteous service to each resident and work hard to perform all maintenance requests in a timely manner. Throughout the year we provide incentives for the residence to pay their rents on time. We offer additional incentives such as back to school supplies for the kids, Thanksgiving baskets, and Christmas gifts.
90 days before each lease will expire. We analyze all rental values to ensure proper rents and possible increase will be something the market can bear. In addition we have a series of letters and calls that are designed to encourage them to renew their lease.
Move Out Procedures
Once a resident give their 30 day notice to vacate we send them our move out procedures that was given to them at the time they signed their lease. These procedures outline items that need to be taken care of in order to get their security deposit back, along with estimated charges if not taken care of. Follow up phone calls are made to verify their move out date and a final walk with the resident will be scheduled with one of our representatives.
Once a resident moves out of a property the following steps take place:
— We have the locks changed immediately after a resident moves out for safety and security reasons
— We encourage the departing resident to be present for the move out inspection. We will give them the opportunity to remedy anything that they could be charged for according to their lease and move out packet.
–We complete a move-out inspection of the property. During the inspection, we identify items that should be charged to the former resident due to repairs beyond wear and tear. We document the condition of the property at time of move out with digital pictures along with detail descriptions of our findings
–we will complete a detailed deposit disposition that included an itemized list of charges to be deducted from their security deposit. Texas law requires this be mailed out thirty days after move out.
–We will notify the owner of the estimated cost to prepare the property for the next resident. We will also complete a new market analysis and adjust the rent to allow for a quick move in.
— Once the property is ready for marketing, we enter ads through MLS, Zillow, and other major marketing sites, and allow prospective residents to view your property.
Once we received a completed application we will complete a full credit and criminal background check, employment verification, and confirm rental verification. We then cross reference with legal documents/mortgage payment history on every applicant. We evaluate the income and ensure that they at least make three times their rent. We will also cross check previous rental and income verification with several sources to ensure the reference are correct. For Example; if their previous rental history indicates they lived in a house and the owner gives them a reference we double check tax rolls to ensure that is the proper owner of the house.
Upon approval, the prospect is given 4 days to sign the lease and pay the security deposit. The resident should move into the property within two weeks of the application being approved.
We believe this is an important element of attracting quality prospects. We strive to keep the rents at the top of the market but with this comes expectation from the residents as well. If our properties are in great condition this will promote good relationships and assist us in minimizing turnover later.
- As required by law, all smoke and carbon monoxide detectors must be tested and the batteries replaced regardless of how new they are. Number of smoke alarms are mandated by Texas state law.
- All exterior doors must have peep holes, C-locks, and deadbolts.
- HVAC filters will be inspected and changed if needed. This one small item will promote longevity of the machine. Our lease agreements require the resident to replace the filters monthly.
- If the resident does not submit receipts for carpet cleaning we will professionally clean and sanitize the carpets in the home. All lease agreement state the resident is responsible for the cost to clean carpets before move out.
- Each property will be rekeyed upon move out to ensure the safety of the new resident as well as the property.
- 1st of the month is the beginning of our monthly financial period
- Weekly check runs. We pay vendors weekly every friday
- 3rd of the month late fees will be applied to all unpaid accounts
- 4th of the month: We prepare and mail the state required forms to begin the eviction process. The Forms are titled Three Day Notice To Vacate.
- 10th of the month- if rent has not been paid we will file evictions with the appropriate county court based on property location. An email will be sent to each owner that will notify them of the situation.
- 25th-28th– we prepare our monthly close out. If rent is paid after the cut off it will be applied to the following month. All vendors are notified of the close out and that all invoices must be turned in prior to be paid in current month. If not those invoice will be paid in the following month as well. Once close out is completed for the month we will process owner distribution checks and deliver to the owner in several different ways. We can complete a direct pay to your bank, mail a check, or wire to the bank. Talk to the property manager for the best option for you.
- The last day of the month you will receive via email individual property financials along with your Executive summary.
Communication is Key
We send out monthly financial statements and executive summary reports. The executive summary was designed to explain all activity on your property for the month, such as lease end dates, tenants who have submitted notice to vacate forms, work orders that are opened, closed, or waiting on your approval. The premise is to keep you informed on all aspects of your property.
Additional Communication is required and will be initiated to explain the items listed below.
- Eviction filings
- Acceptable application
- Notice to vacate from tenant
- Excessive Make Ready Expense
- Lease renewals
- Emergency maintenance
Our call volume is very high and we would prefer emails outlining concerns or questions, but we do understand that sometimes you need to talk with us right away. We will make every attempt to call you back quickly.
We have integrated our Rent Manager software to allow the owner access to view the property activity 24 hours a day. You will be assigned a log in code that will give you access to the data as it’s posted.
Our Residents have access to their accounts 24 hours a day as well. Each resident is also assigned a log in code. This will allow them to see payment history, account balance and give them the ability to request maintenance repairs. The maintenance requests can be submitted to firstname.lastname@example.org
Prospective residents can view all of our available properties through our website which will include interior photos. All prospective resident are also able to apply for the property on line as well as pay the security Deposit and Application Fee, making the process easier than it has ever been and allowing us to process the application quicker. Pertinent information required to process application can also be found on the website.
We strive to ensure all information is available to you at all times but if you can’t find the information on our website. Please feel free to call your property manager or the accounting department. IF we are not available at the time you call please leave a detailed message or send us an email.
HOA Payments and Mortgage Payments
We pay bills weekly each month. We will pay the HOA fees that come to us in an invoice format. We would need to have this set up from the beginning with the HOA Company to have the invoices mailed to our office. We can’t be responsible if we do not receive an invoice.
Mortgage payments are made by the owner. We know credit reports are crucial to the ability of an investor to continue to purchase properties and we do not want to take a chance of an error occurring that could adversely affect your score.
Selling an Investment Property
In the event that you want to sell your property our team is ready to assist. Because we represent many investors the likelihood we could sell quickly is very strong. Click on our home evaluation tab and send us a request to complete a market analysis
If you are looking to expand your portfolio we will be happy to assist. We send out property updates 3 times a week for properties that fit the criteria for our investors. We also put together ROI worksheets to give you the full picture. If you would like to be added to our list to receive recently researched properties please email Pam Blanco at email@example.com We have access to many investors who are looking to sell their properties as well along with many other avenues to obtain good quality properties.