Frequently Asked Questions
The following FAQ is written for both property owners and prospective tenants. At Linnemann Realty, our goal is to ensure both parties feel comfortable with their decision to work with our team. This FAQ is to help you understand the process and will likely create additional questions from you. Please feel free to call our offices and we will be happy to address your concerns. More than anything, our goal is to exceed your expectations and we look forward to working with you.
How much can I charge for rent?
We will determine what you can charge for rent based on our decades of experience and what the market will bear. While you, the client, get the final say on setting the rent rate, we will strongly encourage you to follow our lead on that topic. Our goal is to find the "sweet spot" between the maximum rent we can achieve while simultaneously finding an occupant in the time allotted. Months of vacancy are a pointless waste of time, especially if it's due to attempting to squeeze an additional $100.
Please remember that the market rent is entirely aside from your mortgage payment. Some of our clients have low mortgage payments or none at all. Others have either purchased their homes with substandard financing or have second liens that make their mortgage payment impossibly high. When this is the case the rent is just not going to cover the payment and your experience with property management is not going to be profitable. Just because your monthly mortgage payment is a certain amount doesn't mean the home will rent for that amount.
How do I report this on my taxes?
Great question and one of my favorites, especially since I have to reply first with a disclaimer: as a real estate Broker in Texas I am legally prohibited from giving any legal or tax advice. Now, that being said, the following information is not intended to be tax advice per se but just some simple instructions that you'll need moving forward.
Welcome to the world of owning rental property! Yes, your tax return will now change with the addition of what is called a “Schedule E”. If you use Turbo Tax or a tax preparation service, they will have everything you need in order to properly report your rental property on your tax return. In gathering the needed information, you will want to have the following at year’s end:
Mortgage interest statement from your lender.
Evidence of amounts paid for property taxes and insurance.
The 1099 statement you will receive from Linnemann Realty, reflecting the gross rents collected on your behalf through the year.
Your year-end cumulative statement from Linnemann Realty totaling your management fees, repairs, maintenance, and any other expenses you’ve incurred through our system.
Bring these items to your tax preparer and your tax return should be completed without delay. Don't forget to include your own deductions, not just the expenses from Linnemann Realty (i.e. postage, bank fees, travel to the property?).
How does this affect my homeowner's insurance?
As soon as you begin moving out of your home, it's a good idea to contact your homeowner's insurance company and alert them to the fact that the house will now be a rental and will no longer be owner occupied. Based on this information, they will probably recommend dropping the contents coverage from your policy. Contents are not your responsibility and should be covered by the tenant with their own renter's policy. Your home will still be covered, of course, for anything that was already itemized in your policy.
As an owner of rental property you'll want to make sure you have a solid liability provision in your policy. Most homeowner's policies have liability but it's very low. Our management agreement requires a minimum of $250,000 in liability coverage (which is still very low) and that Linnemann Realty be included on the policy as an additional insured. This is standard procedure in property management and doesn't cost you anything extra in your premium.
How does this affect my mortgage?
Simply, it doesn't. You still pay your mortgage the same way you always have. Don’t wait for the funds to come from Linnemann Realty before making your payment. Given the potential of unforeseen circumstances, there may be a delinquency in payment at some point and we wouldn't want you to get into hot water with your mortgage lender. Linnemann Realty does not make mortgage payments for clients. We transfer funds to you so that you can continue to make your payment as you always have.
What if I want to move back into my house?
The tenant's lease protects them for the entire term of the lease. Thus, if you plan on moving back and know you’ll want to reoccupy your home, let us know at least one year out (or the balance of the lease term plus one month) so we can make sure to allow the lease to expire. Even then, we are required to give at least 30-days written notice for a tenant to vacate (unless they're already in violation in some way), so you'll want to time things carefully.
How do we start the process?
It all begins with a phone call or an email, whichever is easier for you. There are two people at Linnemann Realty who are authorized to initiate new accounts:
Director of Operations
Director of Marketing
Becky Griffon Bradd Stever Director of Operations Director of Marketing 254.275.4829 254.275.4830 firstname.lastname@example.org Bradd@linnemannrealty.com
You’re welcome to stop by the office or, better yet, call Becky or Bradd and set an appointment to visit and discuss your property and your particular needs. Property management goes well beyond just finding a tenant for your home, and we know it’s a stressful step for a lot of people. We try to take the stress out of it.
We’ll factor in when you’re moving so we can begin marketing the property ahead of time and hopefully have a resident in line once the home is vacant. We’ll send one of our Assessors out to perform a full property review and note any repairs and/or upgrades that might be needed prior to renting it out. We can even help you get the property ready with having qualified contractors at our disposal to assist with any unexpected issue.
In short, once you’ve contacted our team we will make every effort to see that your move and your transition to property management is as smooth as silk.
A few key points to note:
1. Per federal regulations, all rental homes have to be equipped with certain security devices on all exterior doors. We can and will handle this for you, but be ready for the first rekey and upgrade to your door locks, which usually runs about $150-$200 depending on the size of the house.
2. Your home has to be in the same condition for a new resident that we will require of any tenant moving out of your home. The home has to be spotlessly clean, the carpets professionally cleaned, the property treated for insects, and the grass cut. Chores like these are not fun, especially when you’re already fully-occupied with moving. Never fear – just say the word and we’ll send our own crews in to handle the labor and we’ll bill it to your account.
3. Please don’t leave any personal possessions behind. If you do then please don’t expect them to still be in working order or furthermore even at the property.
4. Please don’t leave any part of the property “secured” and apart from the use of a future resident. We manage the entire property and lease the entire property – there are no exclusions.