Significance of the Right Location in Real Estate Investment

by 6, August 2012 00:43

While purchasing a rental property (commercial or single family homes), one of the most important factor for a property investor is to choose the right location. In order to stand out in the real estate market, your property should be in an area with lots of potential for future growth or sustained growth.  Real estate in a certain location around Houston or Dallas are always in demand, but some real estate investors find it impossible to sell their property. This is reflective of how crucial it is to choose the right location for a successful real estate investment.

Couple of weeks ago, I came across an interesting news article on Twitter Inc.’s relocation to a gritty area in San Francisco. The news stated that Twitter Inc. will be relocating to Mid-Market in San Francisco next month as a result of which the rent of the area has gone up to 60 percent. Mid-Market is in high demand amongst the tenants since last few weeks as leasing by several technology companies have accelerated in the area thus escalating the rent of the properties. For more information, read:

When you sell your property commercially, a prospective buyer will be willing to pay you a hefty amount if they are confident that they can make money from the location where the property is situated. Similarly, if you are selling your property to a family, they would prefer to be in an area that is safe and secure with good transportation facility, shopping complexes, parks, restaurants, good schools and colleges, etc. People are always enthusiastic of purchasing a home that is located in a pleasing area.

Location always plays the key role in property investment; thus, in order to be a successful real investor we always recommend our real estate and property management clients in Houston and Dallas to keep this in mind. While purchasing a home or a commercial property in Houston or Dallas, individuals stress on the following factors:

Safety and Security of the Area:
It is difficult to sell or rent a home or commercia propertyl in an area which is not considered safe or secure. A buyer or tenant will always prefer a secure area to reside as their home or business. Thus, it is always prudent to buy investment property in an area that has good surroundings with adequate security.

Beneficial for business:
While investing in commercial property, a real estate investor needs to consider various factors such as

  • popularity of the area
  • market competition in the neighboring area
  • kind of products you are planning to sell
  • kind of products your competitors in that area are selling
  • if the product can compete with the similar products that are already being sold in that locale
  • if the area is easily accessible, traffic flow in the locality, parking facilities and so on.

The visual appeal of a home or a commercial property loses value if it is not situated in the right location. Investing in commercial property located in shabby or remote underdeveloped areas can prove to be a disaster as you would not be able torent or sell it at a good price. Therefore, in order to be a successful real estate investor, make a prudent decision and evaluate the location. Great prices for a property can be reflective of those issues, and so real estate investors should be wary.

In the following video, Real Estate Broker Doug Buenz emphasizes on how location can affect the significance of real estate transaction.

Can you Evict a Tenant to Help Sell Your Rental Property?

by 6, August 2012 00:34

As a real estate investment property management firm, we often come across landlords in Dallas and Houston area who are curious to know if a landlord has the right to evict a tenant or remove a tenant who is under a lease agreement before selling his rental unit. A landlord no doubt has the right to sell his rental unit but he should abide by some regulations set by the law and legal precedent in order to avoid unnecessary issues.

According to the housing laws in the state of Texas, a landlord cannot evict a tenant to simply assist with selling his rental unit. Tenants with active rental agreements can be evicted only for a genuine cause. The factors mentioned below will explain why a landlord cannot evict a tenant while selling his house and how you can convince your tenants to evict your property without causing any disputes.

  1. You cannot evict your tenants till the end of the tenancy agreement. A rental agreement is signed by you and your tenant for a specific period; thus as a landlord or a person inheriting a tenant at a investment property you do not have the right to evict your tenant before the end of the term mentioned in the lease just because you want to sell your rental property.  Even if you end up selling your rental property, the buyer must allow the tenant to stay in the property till the end of the lease.
  2. Renters who are staying in the rental unit on month to month  contract can be asked to leave if given appropriate notice (usually 30 days) and if they do not agree to leave in a timely manner, then they can be evicted for failure to leave.
  3. As a landlord, if it becomes essential for you remove your tenant to assist the sale effort; then the best option would be to discuss, negotiate, and sign a release from the lease agreement with your tenant requesting him to leave the house within a specific period of time for some compensation or agreed upon term. You may wish to consult appropriate legal counsel to draft a release or agreement in such a manner to avoid confusion or disputes from a poorly worded agreement.
  4. As a landlord, you have the right to sell your rental unit, but  your tenants should be informed well in advance to avoid disputes and insure that showings of the property can occur with minimal push back. Selling a property with tenants becomes a hassle-free endeavor only if the landlord does not violate the rules and regulations set by the housing laws and reduce the impact on the tenant's right to quiet enjoyment of the property.


Navigating the maze that is known as Section 8 or Government Housing

by 11, January 2011 17:39

Today, Ashoka Lion has been working with several property owners to help assist them fill a vacancy. These owners were open to the Section 8 housing program tenants, and we have located tenants to fill those vacancies. The Section 8 or Government Housing Program is a huge program that provides subsidized rent for hundreds of thousands of tenants a year. When we work with the tenants, we have to not only lease the property to them, but we must help get all paperwork for these governement housing programs on behalf of the owner and provide the housing officials all the appropriate documents.

The typical housing packet submission requires a general warranty deed, copy of the rental owner's drivers license, copy social security, and a signed w-9 form to prove the owner's identity and mailing address. In addition to these documents, the assistance packet provided to the tenant must also be filled out. In addition, you must examine the voucher as the packet of information is commonly called to insure that all the appropriate signatures have been obtained. A packet missing a signature will not be allowed to be submitted to the housing department if the intake personnel notices any missing items. Though this is a good thing, it can also be extremely painful, when they try to tell you that a w-9 filled out by a owner in 2009 is not valid for submission with a packet being submitted in 2011, even though the owner's information has not changed. Another painful rejection that we have encountered is that they try to require that the w-9 be in original ink, which is very difficult to get in a timely manner from owners who are not in state owners in the Houston or Dallas areas.

After wading through the paper intensive submission process, the housing authority will call to setup a inspection of the property that we submitted the packet. The inspection will consist of a variety of issues from requiring that all the utilities be on for the inspection, insuring appliances are present at the property (even if landlord is not providing them), and having a person over the age of 18 present for the inspection. Ashoka Lion requests that tenants be present at the property for the inspecction, but if not, we will be at the property if given proper notice of when a inspector will arrive.

After the inspection is passed, the landlord will have to now sign the lease that was partially filled out (housing usually keeps the effective date blank) till it is determined after the inspection. Additionally, if our property management submitted the lease with a rent amount and this rental amount is not accepted; then Housing Authority will request our property management team adjust lease to the acceptable rent by the housing authority (assuming the landlord is okay with this approved amount). After this is submitted, a contract is then mailed to our rental owner to sign with the contracted amount, and period of the initial lease (usually one year). This contract must be signed and submitted to housing to process the paperwork.

It is important to keep copies of all documents submitted.  It has been our experience that the Housing authority will not accept a fully completed packet, but if they do not locate the paperwork will try to blame the property manager for missing documents. How can a document be missing if the Housing Authorities intake personnel are not allowed to accept partially completed voucher packets?  In our property management team's experience, this usually has to do with the housing authority misplacing these document and then deferring blame to the property manager.  Also, it is important to make sure your prospective tenants provides you a case worker to contact to insure that the paperwork is moving along in a timely manner. We try to email correspondence to show a time stamp with our communications just in case it is argued that we were not making good faith attempts to resolve matters.

The entire process of submission to payment can often take 60 to 90 day for a check to be issued. Even with our history, it is always fun to hear a prospective tenant tell me interesting facts like "Housing will pay you in 2 weeks" or "Housing will allow me to pay more then the stated rent". If Housing were to allow you to pay more rent, then why would they subsidize your rent for the amount that they will? Tenants rarely have a answer to that question.

Working with the Housing Authority is like working with any large entity (slow and often times confusing), however the rewards to owners can be a steady stream of rental income. As long as the owner is comfortable with slower delay at the begining of the contract, as well periodic inspection spurring repairs; then the Housing authority does provide a steady stream of rent for owners. In this day and age, the certainty of rent may trump the discomfort with the process of dealing with a large organization with tons of red tape.