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.

Midtown Madness

Midtown is one of Houston's newest inner loop neighborhoods. Well, that's not exactly correct. Truth be told, the area has many historic landmarks. However it has only been within the last five years that it actually defined itself as one of Houston's managed districts. A lot of the area in Midtown was just just empty lots and dilapidated buildings until investors and developers arrived with some vision.

Now, Midtown has defined boundaries and it falls within a Tax Increment Reinvestment Zone a.k.a. TIRZ. What exactly is a TIRZ? Good question. According to the Midtown Management District, a TIRZ "is a special district created by the City to help finance the cost of redeveloping an area that would not otherwise attract significant private investment in development in the foreseeable future." These taxes are not levied taxes, either. A portion of the ad valorem taxes are invested back into the district.

A great feature of this neighborhood is the strength and enthusiasm radiating from the community itself. People within this community are involved. Local residents can enjoy events such as Art in the Park where local artists display and sell their art in one of Midtown's beautiful parks. Or Plant and Pedal, a project that fosters improvements through planting flowers and trees.

The list of restaurants in the area is quite impressive: Brennan's, Cyclone Anaya's, Reef, Farrago's, Ibiza and Crave Sushi are just a few. And if one wants a little late night fun, there's Howl at the Moon, Pub Fiction and 13 Celcius.

In sum, Midtown offers one a completely stocked and established residential community close to downtown. For more information about Midtown and everything it offers, visit their website.

MAY 2010 Housing Market Newsletter

Just leased a 4 bedroom right off Washington for $2475/month!!! That is a steal!

May's Housing Newsletter just came out!
Welcome to the most current Housing Trends eNewsletter. This eNewsletter is specially designed for you, with national and local housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general.

Please click here to view the MAY-2010 Newsletter Housing Trends eNewsletter:

The Housing Trends eNewsletter contains the latest information from the National Association of REALTORS®, the U.S. Census Bureau, Realtor.org reports and other sources.

It also includes press releases with charts and videos, key market indicators and real estate sales and price statistics, a video message by a nationally recognized economist, maps, mortgage rates and calculators, consumer articles, plus local neighborhood information and more.

If you are interested in determining the value of your home, click the “Home Evaluator” link for a free evaluation report.

Sound decisions can only be made with accurate and reliable information, and I am happy to be a trusted resource for you. Thank you for the opportunity to provide you with this monthly eNewsletter, and I look forward to answering any questions you may have and to the opportunity to be your REALTOR® in the future.

Investor Tip #1 - Begin the process with the right agent.

Envision that you found what you thought was the right investment property to purchase. You clean it up, you put it on the market but nothing happens. No one is leasing the property. So, you hire an agent to lease the property for you and discover you have to come down on the lease price significantly more than you thought. What happened?

Perhaps hiring an agent with strong leasing experience when you initially purchased the property would have helped.


We have had several investors approach us for our help after they purchased an investment property because the agent who sold it to them didn't "do leasing". Oftentimes the investor discovers that the agent who sold them the property wasn't exactly accurate regarding the market lease rate for that specific property. The anticipated cash flow didn't happen. Understanding the lease market is an important first step if you want to maximize your investment from the start.

I began my Real Estate career in leasing having written up at least 300+ lease contracts to date. In these transactions I represented the Landlord, the Tenant or both. I understand the market and what drives tenants towards specific properties. I know what can be detrimental to getting a property leased and what makes it a coveted prize.

Buying an investment property at a good price is only a great deal if you can get it leased at a rate that makes it worthwhile. Partnering with someone who can see it all the way through to the end really can save you a lot of headache and stress.

Houston's New Kid on the Block - Highland Tower

A much awaited Highland Tower is starting to move in its first tenants this month. The newest high-rise condo in Houston is located just inside the loop, opposite the Galleria and within walking distance to Highland Village Shopping Center. They have one, two and three bedrooms available for sale starting in the $300s.

Of course there are penthouses available, and there have been several buyers who have requested walls be taken down to create their own floor plans with the help of prestigious Ziegler-Cooper Architects, who had a hand in helping the developers at Pelican Builders with the design of the tower. They did a fantastic job!

Construction started in 2008 right before the market declined, and the tower has been able to survive with 35% of the building's 93 units already being sold before tenants could move in! I truly believe this high-rise will succeed in comparison to similar projects such as the Mosaic and the Royalton. Both towers have succumbed to leasing after sales decreased, which drove property values down. Due to the state of the economy, there won't be construction of another condo tower project in town at least for the next couple of years - meaning, the Highland Tower can claim to be Houston's newest condo for a long time. I'd definitely recommend this new project to anyone looking to buy a city condo!

The six wards of Houston

I grew up in Kingwood and remember that the only time I ever heard mention any of the wards of Houston was during news casts. I never really understood them. But now that I live in the loop and practice real estate, I hear about them all the time.

My clients and friends are always asking me about our wards, so I've decided to do my research and write a little piece on them.

When the Allen brothers left New York to come to our neck of the woods in 1836, they purchased 6,600+ acres of land along the Bayou and called it Houston. Once the city was incorporated in 1837, they divided the city into political districts. These districts, referred to as "wards", were strictly based on geographical boundaries and never took into consideration the number of people within the boundaries. Their purpose was to create an electoral district for administrative and representative purposes.

Initially, there were only four wards. In 1866 the fifth ward was added and 10 years later, thereabout, the 6th ward was added. A map of these wards can be found here.

I had assumed that since the Allen brothers came directly from New York, that the idea of the ward system was born from the 5 Burroughs of New York. My research, however, has taught me that the Burroughs of New York were developed long after the Allen brothers left New York. It turns out that the ward system was used in other U.S. cities, such as Chicago, and not an original idea even to the Allen brothers.

The city redefined it's districts and no longer used the ward system in 1906; and in 1928 the wards were completely removed from maps. However, the neighborhoods still remain and the residents continue to proudly refer to their homes by the wards in which they reside.

I am a very nostalgic person and love the preservation of History. That may be why the Heights has such a special place in my heart. So, I would love to see the six wards of Houston forever remembered in recognition of our humble beginnings.

West Ave - Oooo La La

Gables West Ave is the ambitious mixed use residential development at the corner of Kirby and Westheimer. The project takes up one city block and is a combination of residential living quarters and retail shopping.

Mixed use developments are a result of the desire to be able to live within walking distance of shopping, dining and playing. This recent phenomenon in Houston is born from the rising cost of fuel and a desire to leave behind smaller carbon footprints. In a city such as Houston where the absence of zoning laws make it difficult to provide an effective mass transportation system this is especially true.

A recent visit to this pedestrian friendly development left us almost totally speechless. Words that immediately come to mind are, chic, hip, elegant and stunning. The first thing that strikes you the most is that the property has high ceilings almost everywhere. Then you notice the details, the elegant stone work and the Art Deco.

Each apartment unit comes with nothing short of 10' ceilings and if you should reside on the top floor, your ceilings are as high as 12' or 14'. Add ceiling to floor windows to the mix for an elegant home you'll never want to leave.

Interiors include Brazilian hard wood floors, two-toned granite in gourmet kitchens, painted accent walls, stainless steel appliances and digital programmable thermostats. Our favorite interior feature is the I-Pod docking station that feeds your desired tunes through a built-in speaker system. They really get their clientele!

The entire residential part of this community is apartment living. We assumed that some aspect of the project would include condominiums since Gables recently converted their sister property on Kipling into upscale condos and sold them off. No such plans seem to be in the making for a similar fate at this property.

They have started leasing their residential units and have exciting plans for the retail aspect of their project. Tootsies, a high fashion women's retail store is slated to move in shortly. Robert Del Grande is planning on opening a restaurant along similar veins as his restaurant Cafe Annie as are the owners of Eddie V's planning to open something special. Oh, and let's not forget the 10,000 sq. ft. Roman day spa.

Pedestrian friendly communities seem to be the next attraction for various locations in Houston.

Other mixed use developments are on their way to Houston, too. Houston icon, Ed Wulfe, since 2005, has been developing the area at San Felipe and Post Oak. And GID Group out of Boston is in the planning process of Regent Square located at the corner of Allen Parkway and Dunlavy.

Woodland Heights

If you're looking for a charming historic area of Houston in which to live, Woodland Heights is the place to be. Platted in 1907, this area is one of the closest residential communities to downtown Houston.

The homes in Woodland Heights are generally bungalows or arts and crafts style homes. One can still find several of the Craftsman homes that were so popular last century. Many of them have been renovated to include modern features while keeping with the original feel and layout of the home when it was originally built.

This community is bound as follows: 11th street to the North, I-45 to the East, Studewood to the West and I-10 to the South.

Single family homes and lots in this area start well above $200k.

Woodland Heights also has a lot of personality. Every year, one Saturday in the month of December, the community hosts an event called Lights in the Heights. Residents during this time of year totally redefine "bling". And each year, it becomes more interesting. For just one evening, large sections of the community are corded off so that pedestrians can walk up and down the streets to enjoy the creatively decorated homes while sipping Wassel and listening to various performers play Christmas music.

Some even say the community has a quirky side to it. We would have to agree. Always in good taste, residents of this community find fun and creative ways to express themselves.

If you would like to learn more about this community, you may do so here: Woodland Heights Civic Association

Changes in FHA

If you are a first time home buyer and you are looking to buy a house but don't have a lot of cash to put down, FHA financing is still a good and viable option.

The attractive aspects of FHA financing are two-fold: flexibility regarding credit and the low downpayment requirement.

There are some changes occuring in FHA financing, an effort on their part to improve the health and strength of the program.

If your credit score is less than 580, you will now be required to put a 10% downpayment on the house. Before the new ruling, you were required to put only 3.5% down. Regardless, 580 is still an achievable credit score.

Another change is that the seller can only contribute 3% towards closing costs, whereas before, the FHA allowed up to 6%.

And then, finally, the agency has increased the required Mortgage Insurance Premium from 1.75% to 2.25%; the result of this change will be an increase in monthly payments.

In sum, these changes will require the buyer to have more cash on hand for closing costs and perhaps a lower priced home in order to cover the increase in monthly payments resulting from the change in Mortgage Insurance. None of these changes are severe enough to create any huge change in demand for FHA financing.