In our continuing series to educate landlords and investors about rental registration, we now turn our property management team's focus to Missouri City.  Missouri City is a great area to live as noted by CNN/Money Magazine rating it the "5th Safest Place in Texas".  In addition, it is easily acessible to major freeways that connect it to job centers like the Texas Medical Center and downtown Houston. 

Other accolades for Missouri City (obtained from the Missouri City website) include:

• July 2010: Missouri City was recognized as #21  on the list of best places to live. 
• December 2010: Missouri City was recognized by Avid Golfer as #1 of Best Overall Value under $40 for public courses

Living in a vibrant, caring community like Missouri City places a burden on investors to insure that their renters also have this same care and pride. Missouri City has instituted rental registration policies. Missouri City requests that property owners who have rental property display their permits on the inside door of the cabinet under the kitchen sink. If there is no door under the kitchen sink, then a landlord can place it on the inside of another cabinet door.

In Missouri City, if your property is not registered then the tenants can have difficulty turning on utilities; then the landlord or property management company will get a angry call requesting assistance to get this rental registration completed. Therefore, it is advisable to handle these matters prior to renting the property to a tennat. Ashoka Lion will assist landlords in getting this form to the appropriate city department by either paying with credit card (being reimbursed by the client) or mailing in the payment on behalf of the landlord.

Ashoka Lion provides property management services for landlords and real estate investors in the Houston metropolitan area including Missouri City. Contact our property management firm so one of our property managers can begin transitioning your property to the Ashoka Lion team.

Check out this cool video of a arial view of Missouri City, Texas.

What is Green Property Management? Ashoka Lion has spent the better part of three years revising its processes and procedures to be more ecologically conscious. This evolution has involved revising our processes for rent collection, leasing, reporting of repairs, financial reporting, communication with tenants and owners.

When we started the company in 2006, our firm was heavily reliant on filling out paper leases; driving to pick up rents from tenants; depositing rents to each owner's bank account. This resulted in reams of paper being used as well as gallons of gasoline being spent on driving with very little gains for our clients in terms of time or money. In fact, our old processes involved spending more time as we had to allocate more time scanning, filing, and driving during business hours to insure that these objectives of leasing, collecting rent, and sending the owner their funds. 

Now, we have previously illustrated in our previous entries about things that we implemented over the years for Houston and Dallas clients in terms of services and tools for "Going Green and Mobile".  However, we wanted to help investors and understand what this philosophy mean? Does it mean that we will force owners to accept every new environmental technology or fad? Will we force you to install solar panels on your rentals? No, our goal as a property management company is to balance our duty to our owners, tenants, and local ordinances by providing solutions that align the owner's goal of having happy, longer term tenants paying market or higher rents, but we must these strive to achieve these goals by balancing our duties to our communities in Houston and Dallas. Ashoka Lion believes that by demonstrating a constant committment to improve ourselves that we can reflect a sincere desire to balance this goal while carrying out our property management duties for their houston and Dallas properties.

Every day, we find out devestating news that affects our world in regards to the environment (Global Warming, Water Shortages, Air Pollution); and our property management team believe that it is only a matter of time before these rules and regulations will seep into the multifamily and residential investment industries. In the commercial industry space, it is being regularly reported how buildings are committing whole heartedly to offering more eco-friendly features, and new home builders are marketing the "Green" features of their homes very heavily.  It is only a matter of time before either through market dynamics for new renters will require this of rentals in the single family home or multifamily home markets. Additionally, if market dynamics do not reach that point, then government regulations will increase the regulations for rentals. My investment clients may not realize it, but rental properties are often more stringently regulated than traditional homeowners. For example,  do regular homeowners have stringent inspections of the interior and exterior of their homes to make sure that repairs are taken care of? No, well rentals in the City of Sugar Land are required to have these kinds of inspections annually (read here).  Does your home have a requirement for door viewers, keyless entry, and keyed deadbolt? No, well Houston and Dallas rental properties must have these kinds of locks due to regulations in the State of Texas. Do you have inspections to bring up building items to code even if it was built prior to any new code? No, well the city of Houston, required a building that we managed to make those kind of upgrades even though it was built in the 1940's. 

In our opinion, it is better for us to embrace this paradigm shift versus being stuck catching up. Also, our firm is investigating how we can incorporate these techniques into make readies and property upgrades so we can better align our rental properties with consumer preferences. If you think about it, where do you pay the most money for food? Whole Food or Central Market came to the top of your mind, but what businesses are booming? Those very same brands. Though the industries are different, however they do provide insight into consumer preference for things that are more ecologically friendly and more organic.

Ashoka Lion will continue to roll out new improvements to our Green Management philosophy. Currently, our property managers are evaluating how we can improve our internal processes. Our next evolution, is we are evaluating how we can evaluate our manager's carbon foot print, while we also incorporate more ecologically friendly update as part of our make ready process.  In our humble opinion, it is better to be moving forward versus being stuck in old trends.

It is appropriate that you enjoy the Michael Jackson "Earth Song".

Many agents and homeowners are considering in this real estate environment renting their homes. However, many people do not know that in Sugar Land has rental licensing requirements. In the City of Sugar Land, you must be register your rental property (either online or by mai), and pay a $80 fee.  When landlords or our property management firm register your property, you will then be required to setup a inspection of the interior and exterior of the home. If real estate owners are cited by the City of Sugar Land for some violation of their codes for maintenance, sanitation, or safety; then the landlord must remediate these issues in a timely manner.

Now, many landlords maybe wondering what is the big deal if they do not register. Landlords can be fined upto $500 a day for failure to obtain a license and water service can be denied. Imagine if the landlord does not do this registration process in a timely manner, then new tenants maybe denied water service till the landlord has paid the fines and application fees. Tenants maybe issued a temporary water service permit that is good for 30 days, but it is on the landlord (or his property management representative) to coordinate this matter to insure that the inspections are done in a timely manner. This can add a lot of unnecessary tension and headaches to your life as a landlord.

What does this mean for landlords? You must make sure that you have the time to take care of this registration in a timely manner and coordinate the inspection. If items are cited in a inspection, then you must be able to remediate those in a timely manner. This is important to do before you accept a tenant or you maybe at risk of not having the tenant have any water service.

Sugar Land is a great place to live and a lot of want to live there. To insure that you keep your tenants happy and being long term tenants landlords should be aware of the obligations that come with being a landlord in Sugar Land. The Ashoka Lion team is happy to work with our clients to handle this process on their behalf, so please contact us if you need our help with managing your property in the Sugar Land area.

Check out this great show put on New Year's Eve 2009 at Sugar Land City Hall. Enjoy!

Today, I read a article about the Galveston County Housing Authority being swamped with applicants, and it made me realize how difficult the position is for the Houston Housing Authority as well. In the past 6 months, the Houston Housing authority has accepted thousands of applicants off their wait list. This make sense that the Housing Authority would try to help tenants find housing assistance, especially in light of this economy; as it is their mission.  With such a good, noble mission; you can forget how difficult it can be for rental property owners and real estate investors who work with the program.   The Houston Housing Authority now has delays that go beyond its 60 to 90 day "normal" processing period for landlords to be paid their check from Section 8 ("Section 8" is a catch all term for the county and city rental assistance program for low income individuals). Therefore with all the good that the program is doing, there are a lot of bad things that the owners are dealing with.

For example, two of our Houston owners who accepted Housing tenants for their vacant properties in November and December of 2010 have only received contracts in April of 2011 after having passed the inspection in December and January of 2011 for the two properties that I am referring to. This means that after marketing the property for tenants in the Houston area and accepting a tenant that the there was a delay of 3 to 4 months to even be approved for payment with payment coming in May 2011. What makes this delay of payment worse is that in one of the owner's cases that the effective date of the rental contracts was that it was made as of April, 2011. This means that the owner lost two to three months of rent keeping the property vacant while the Housing Authority dealt with their internal processing issues. 

These kinds of delays must be dealt with for Houston area rental owners to want to take on the additional burdens placed on them by accepting housing authority standards.  These burdens include:

• Lengthy Paperwork: The Houston Housing Authority request copies of deeds, w-9, management agreeements, prefilled out leases signed by tenant, voucher, and housing authority packets.
• Requirements for Tenant Appliances to be at the property: If you rent the property without a refridgerator, it must still be there for the inspection.
• Inspectors inspection criteria not being uniform: Different inspectors in the Housing Authority program will pick out minute issues to "fail" a property requring a 2 week delay for reinspecting a property.
• Delays in intial payment: Traditionally, the Housing authority process can take up to 60 to 90 days to process and get payment out. However with this influx of new applicants (some tenants have told our property management firm that there are as many as 6000 new voucher issued in past 6 months).

Also, real estate agents are not educated on this process, so it makes the process longer for them to deal with leasing these properties that have accepted the Section 8 Rental Housing Assistance Program tenants. For example, our property management firm will not pay any real estate agent's commission till the owner is paid by the Housing Authority.  This policy is in place to insure that the final amount is agreed upon, and the effective date is appropriate. Additionally, the Housing authority warns agents, landlords, and property management firms that tenants could potentially be reviewed for eligibility during this submission of their rental packet to the Housing authority for review.  If the prospective tenant is found to be inelligible then the rental owner will be forced to find another prospective tenant.

These delays and risk towards getting payment is why our firm created this policy of waiting till the payment is made by the Housing Authority prior to releasing any commission payment for real estate agents. However, many real estate agents are not used to these kinds of delays and this can cause confusion and resentment. This is why we hope agents read our "Agent Remarks" that our listing agents put which explains that the receipt of a check by the owner is a prerequisite for a Section 8 tenant to be considered approved and for commission to be paid out. 

We hope that real estate agents and property owners understand the risk of dealing with the Section 8 Housing Assistance program. However, there are some benefits to the program:

• Consistent rental payments
• Tenants could potentially stay longer as they have to come out of pocket for deposits
• Housing Authority does provide periodic review of a applicants background

As the TV show the "Facts of Life" would sing in their intro song,

"You Take the Good, but you Take the bad. You Take Them Both, and There You Have the Facts of Life."

A Fort Bend area landlord was named in a lawsuit that alleges his failure to maintain a air conditioning system lead to a disabled man's death in the Third Ward area.  His estate is alleging that the disabled man was hospitalized and eventually died to the heat and humidity in the home due to the broken air conditioning unit. This case brings up several issues that should be addressed:

1) Did his lease require written notice? If so, did the tenant provide the landlord or his property management company this notice?  This is why we tell our Houston and Dallas area tenants if they cannot provide certified mailed letters for the notice that they can provide notice by fax or online through their tenant portal.

2) Did he have a unpaid balance at the time of the written request being submitted? The Texas property codes allows for landlords to not be required to make property repairs if the tenant was not current on their rent.  This is why we provide tenants a portal to check their balances and make their repair request.  

3) Did the owner carry liability insurance coverage? Liability coverage can assist when the owner is found negligent for harm caused by property conditions.  Ashoka Lion recommends that our Houston and Dallas property management clients carry $1,000,000 of coverage, but at minimum max out your coverage (usually in a homeowners policy, $500,000 without any special underwriting required). Additionally, you can obtain a umbrella liability coverage to cover any amounts that are not covered in your primary insurance coverage. If you are not comfortable with determining your needs, you can contact a insurance professional to walk you through this process. Ashoka Lion requires all owners to name the property management company a additional insured on the policy to insure appropriate defense in suits like this.

However, the problem is that this landlord will have to incur cost and time loss due to these kinds of legal actions.   This requires a clear documentation of all actions and communications for homeowner and their property management company. This is why Ashoka Lion  works to transcribes our  notes to histories for our owners, tenants, properties, and vendors. Our goal is to archive all documentation and actions taken to mitigate claims of negligence on behalf of the property management company and the Houston and Dallas property owners that our property management company represents. You cannot prevent someone from suing you, but it is prudent for landlords and their property management companies to take appropriate risk mitigation techniques to reduce impact of charges such as these.

Ashoka Lion and its affiliated real estate brokerage have developed a marketing program that is one of the most extensive for filling vacancies. We know that our property management clients want their vacancies filled as quickly as possible. Our vacancy marketing program includes the following tools:

• Online Posting to over 20 online databases including RentalHouses.com, Rental.Com, RentalHomesPlus.com, Homes.com
• Videos posted of our rental properties on YouTube (AshokaTenants)
• Listed through our Realtor Partners to Multiple Listing Services (MLS)
• Distinctive Yard Sign
• Online Application
• Realtors can pay their client's app fees through our Pay Lease, Inc
• Marketing through our Twitter Accounts: LionRealEstate and HoustonRenting and DallasRenting
• QR Bar Codes linking to mobile ready listings for vacant properties
• Text marketing programs
• Periodic Marketing reports tracking views, appointments, and applications
• Showing services track all agent showings and collect agent feedback

In addition, to our extensive marketing program, Ashoka Lion demands that our Realtor partners also take additional precautions to reduce risk that our marketing is misappropriated by scam artist. These steps include:

• Watermark Pictures with Brokerage name
• 3rd party sites must also reference MLS listing number to help tie the 3rd party site ads to the local association MLS site.

These techniques are designed to give potential prospective tenants confidence that our rental listings are legitimate and not some exotic scheme designed to bilk them of their rent money. Therefore, when prospective owners of rental property in Houston and Dallas are looking for a property management firms to help them lease their properties; they can feel confident that the Ashoka Lion team is giving a maximum effort to fill their vacancies.

Ashoka Lion introduced our marketing program to Realtors, and we have had people asking us what are the benefits to referring the property management/leasing business to our firm in the Houston and Dallas markets.There are 3 easy reasons to partner with our firm to handle this business.

1) Ashoka Lion pays a 25% Referral Fee  After we successfully lease a property, we will pay the referring agent through a check to his broker a referral fee equal to 25% of the final lease price. This is the easiest fee that you can earn as you do not have to do showing, use up fuel for showings, spend time filling out paperwork ,etc. We handle the leasing and property management, and when your client is ready to sell or buy more property; then we return it to the agent who referred us the client.

2) Our primary business is property management and leasing: Our Houston and Dallas property management teams are focused on the business of managing and renting out homes in the Houston and Dallas area. In most Realtor's businesses, this is a time consuming process with very little upside due to the lack of manpower to help assist you in preparing financial statements, recording work orders, paying our repair bills, etc. These are time consuming processes, and they really eat into a Realtor's time and margin.Our leasing packets are very thorough and include processes to make prospective tenants aware of eligbility requirements, screening that goes beyond just a credit check, and providing tenants the option to digitally signing off on lease packets that are almost 60 pages with all the required addendums and sheets.  If we list the property, the agent can still provide leads and get the buyer's agent portion of a commission, but they avoid the responsibilities of screening, advertising, and coordinating showing. Our marketing program for leasing includes listings being included in Rentals.com, RentalHomes.com, Homes.com, GoSection8.com and other sites that require to pay per listing.  Our program includes these marketing opportunities as standard. This is in addition to the marketing that is done through MLS and yard signage.

3) We will honor any noncompete for the sales business: Most agents who cannot manage a home may not take on that business, and in doing so; their clients will find someone else that can provide the property management service. These other Realtors will also position themselves to take on the future sales business in the Houston and Dallas markets with your investor. Our firm will sign a noncompete and return the sales business back to the referring agent, when the investor is seeking out property sales related assistance for this property.

4) Realtors grow their "team": Realtors are often solo practioners in most real estate practices in the Houston and Dallas market. This means that you have a lot of responsibility to growing your practice. With our program, the client can position herself as the "Sales Expert" who has a property management team to handle the day to day property management business. This will impress upon your clients that you are building a niche and emphasize your expertise that makes Realtors today successful.  In addition, by stating that you have a team that you work with,  you can draw yourself into a role of a expert guding your clients with your various connections and resources. This helps once again emphasize that your clients should work with you as your sphere of contacts seems more complete and full service.  Our goals is for successful Realtors is to make clients feel that there is a advantage to working with you versus simply doing the research through all the various online tools at their disposal. By positioning yourself as a person with contacts, resources, and tools; investors will feel that you as their Realtor can make their buying and selling experience more pleasant and less confusing.  Ashoka Lion's property management team is ready to help your Houston and Dallas clients feel like you have top notch operational suppport at your disposal.

As TREC has clarified that agents cannot do property management without their brokers approval including that rents must be collected through Broker trust accounts, the days of agents doing property management "on the side' is not really a option. Check out the TREC Advisor here.  Working with our firm allows you to avoid losing clients to brokerages and agents who can do property management and sales activities, and it also provides you another tool in the tool belt to impress clients. Also, we have a great marketing program to thank the realtors that do provide referrals. Check out a summary of those efforts here.

Ashoka Lion launching a "Thank you for the property management client referral" marketing campaign for Real Estate Agents. It is a quick social media campaign that we will do for our property management client referring Realtors. Social Media is a buzz word, but with this quick campaign, you will gain some exposure without it being perceived as you marketing yourself. Here are the three aspects to our "Thank You" program.

Today, our economy is facing a double whammy in that we have weak economic data and we also see further cutbacks in governmental support.  For Ashoka Lion, this is just another feather in our cap for thriving and improving our firm's property management services during these difficult times. Since 2008, the real estate market has been in a tail spin, and most economic indicators indicate that it will continue to be weak market for forseeable future. Investors cannot get lending to buy investment property, and so it limits the potential pool of real estate investors that are buying in the Houston and Dallas markets.

Our property management firm saw the writing on the wall, and we decided to reposition our value proposition in this real estate market. Instead of cutting back and shriveling up  to wait out these economic times, Ashoka Lion has expanded our property management service offering every year.

Since 2006, here is a list of improvements that we now offer real estate investors and tenants:

• Online Rental Owner Portals with financial reporting including income statement, balance sheet, and rent roll
• Online tenant portals with tenant statements
• Online document storage of leases
• Online rent payment option for tenants
• Online rental owner disbursements
• Electronic calendars accessible by Mobile phones for property managers
• Property managers telecommute into our property management system
• Voice Over IP Phones routed to property managers
• Electronic disbursements of Vendor Payments for services done for properties
• Tenants can provide us written notice of repairs or move outs via our online portal
• Property repair Work Orders are emailed to Vendors
• Digital approval of Estimates and Documentsby Rental Owners
• Use of Electronic Signature Programs for Leases
• Tenants can now pay rents over the phone
• Mobile friendly riders to Text to get information about Listing and Vacant Properties
• QR Bar Codes on sign riders to get information about Listing and Vacant Properties
• Vendors were instructed to fax or email over invoice versus mailing us paper invoices
• Online rent application for our properties that can be found at www.LionRealEstate.com
• Providing tenants a letter of top energy saving ideas to reduce down electricity usage
• Our website's "Green Lifestyle" Section 
• Expanded our property management operations to the Dallas, Texas area
• And More!

Do you see a pattern in our improvements? Yes, our property management firm focused on being "Green" and mobile.   We decided that we could not build a business in the traditional mode to server our property management clients in the Houston and Dallas markets, and so we tailored our property management business to be built on a mobile platform that reduces down as much waste as we can.  In Houston,  our property management team got rid of our former office space near downtown Houston.  We shifted to mobile platform that agents  and property managers access from home or  on their mobile phones. This saves us in cost related to overhead for rent, storage space,etc. In addition, our property managers do not waste time driving to the office to do their work,  and so they are generally happier with the arrangement. Our business structure allows us to save in several ways that benefit our bottom line, but these improvements have also benefited our company in our goal to be one of the "greenest" management companies in the property management industry. Our tremendous financial savings also translated to environmental benefits including:

• mileage lost to commuting to office
• paper consumption printing invoices to store in paper files
• paper printing for leases
• mileage spent driving to collect rent

In fact in 2010, Ashoka Lion was selected as one of the top case studies by our digitial contract and document approval vendor (http://bit.ly/fnzaa0 ).  I know that our property management team is not perfect, but we are trying to improve our property management services for our rental property owners by relying on state of the art technology to maximize efficiencies and reduce our carbon footprint.  We could have waited to be a late adopter to technology or try to do business in a more traditional manner, but these difficult economic times requires us to think in new bold ways; if we want to thrive. If the old adage is that "the early bird catches the worm", then isn't it easier to catch the worm if you are mobile and nimble?

I came across a article on the AshokaLion Twitter account, and it got me thinking about "wear and tear" clauses in leases. Every lease has a "wear and tear" clause in it, but it always remains a vague concept. I decided to research what other investors and real estate sights came across, and I found most had the vague notion of the wear and tear clause. I did find one article by Rental Housing Online (http://bit.ly/gklzFl) and they had a pretty good list. It definitely was not exhaustive, but either is our addendum that we provide to tenants at their walk through with our property managers upon moving in.  We have tried to provide a list of common types of damages, explainations what we consider to be "normal", and we try to explain to them what potential charges may be upon them moving out (at least some minimums that we have come across). We know this is not a complete list, but it is impossible to have a complete list due to all the circumstances at the property (including condition of the property at the time of  tenant moving in and age of the items).

I know it is impossible, but we do try to explain that "normal" is based on reasonable standards. For example, we state that scuffing a wall and it needing to be repainted is not "normal".  However, it is "normal" to have a rug steam cleaned with a rug doctor machine. However, if I have to get a commercial cleaner to take out damages to a carpet, then this should be considered "excess" of normal wear and tear".  As a kid growing up in the Houston area, my family lived in a home for over 10 years as kids, and when we moved from that home; our family was able to cleaned our carpet  to make it presentable.  It is not a huge leap of faith to think that our care was not extraoridinary, and this is why our property managers in Houston or Dallas do not understand tenant's claims that it is normal to have punch stains in the floor or bleach on the floor. 

Typical things that we would deduct from the security deposit for include:

1. Scuff Marks on walls requiring us to paint
2. Nail Holes in Walls
3. Damages to windows
4. Broken Knobs on ovens or stoves
5. Unreported leaks that cause damage to cabinets or floors
6. Carpets requiring commercial carpet cleaning
7. Smoking in the house and it sticking to walls and carpet (we request all tenants if they smoke to smoke outside the house).
8. Pet Urine requires us to get  a professional cleaning
9. Lost Keys
10. Unreturned Garage Remotes
11. Food left in the refridgerator (if mold is in the refridgerator, then we may just replace refridgerator)
12. Broken door knobs
13. Missing Smoke Detectors after it was installed
14. Blinds damaged
15. Carpet that burn marks or bleach stains (replacing room carpet)

I know that there are horror stories for tenants about items being charged that they would not consider normal wear and tear. To reduce these confrontations between tenants and landlords or tenants and property management companies in the Houston and Dallas area, I would suggest doing the following:

1. Fill out the Inventory and Condition Form within the requested time and keeping a copy. Many real estate agents and property managers will give you this form to fill out, so I would strongly urge you to do.
2. Take Pictures and/or Video.  You, your property manager  and/or real estate agent should take pictures and/or video of the property at the time of the move in. I would make sure to have the correct time stamp on videos and pictures, so you can demonstrate what condition the property is at move in.  As you usually are given a few days to finish documenting this form, it is not hard for tenants to document with video and cameras damages.   I would suggest sharing this with landlords and managers as soon as possible to make them aware of these damages that you find subsequent to the move in walk through, if you want to claim it on your inventory and condition form.
3. Report damages quickly. Landlords can charge tenants for damages that they fail to report on a timely manner that get worse. For example, if you see a leaking pipe under a kitchen report it, as it may lead to damaging the wood in the cabinets.
4. Know how to shutoff toliets and cut off water at the main water cutoff. If you see water flowing, know how to cutoff the water at the main water cutoff. This will reduce down damages that remain that could have been prevented.
5. Do not use items that you know are possibly damaged. If your AC is having problem, shut the AC off to prevent further damage because you used it after it was having problem. The same could go for appliance, disposals, and anything else that you fear may not be working. You should report these items and take the appropriate precautions. These kinds of damages could be grounds to deduct part or all of a repair cost for the matter.
6. Keep up your preventitive maintenance. If your home has a AC unit, then I would suggest changing the filters to avoid damaging the system. Unpaid repair costs in our leases can be deducted from the security deposit.

I know that some of our real estate investors probably have more examples, so if you do not mind sharing on our Facebook page (http://on.fb.me/dQDvrM) that would be great. We will post a discussion under that tab to collect feedback and input regarding example of what is and is not considered "normal wear and tear", and while you are there; please do not hesitate to "Like" our facebook page.

If anyone has dealt with court cases that involve these issues, then feel free to share this as well in our discussion section. We would love to see how any of our Houston, Dallas, Texas, or any courts around the United States for that matter adjudicate these standards.