How to Become a Landlord in Texas

Whether as a vocation or side hustle, becoming a landlord needs dedication, expertise, and time.

Many prospective landlords are drawn to this business by the prospect of passive income through rent collecting.

However, seasoned landlords understand that this job demands initiative. The more time you put into maintaining homes, finding suitable renters, and keeping track of all the details, the more successful you will be. Here’s how you can begin.

Are you ready to start making money with one or more rental homes in Texas? Texas is an excellent area to start a business as a landlord for various reasons. The typical rent in Texas’ most populous cities may provide high passive income. Jobs and the number of renters are increasing across the board, from computer firms to the burgeoning petroleum industry.

Becoming a Landlord in Texas: The Step-By-Step Guide

Becoming a landlord may be a lucrative business in Texas, especially if you own property in a bigger city like Houston or Austin. Properties don’t remain unoccupied for long in this state, where the typical gross rent is slightly under $1,000 per month, and the occupancy rate is over 90%. To be a successful landlord, you must do more than own a house and rent it out. You’ll need to understand the basics of the industry and follow a few easy steps.

Find a mentor

Any entrepreneur may benefit from mentoring, but it’s especially vital in real estate because much money is at stake. A mentor’s principal role is to assist you in avoiding frequent problems that they may have already faced. You also don’t have to locate someone to accompany you every step of the journey. A handful of coffee meetups or a few quick phone calls can be all you need.

You may locate a mentor in various ways, but the ideal method is to ask around. You’ll be astonished at how many individuals are ready to assist you, even if they are technically competitors. Most landlords understand that there is enough business to go around and that each property appeals to different individuals for various reasons. Someone who owns property in the same region, or at least close by, is the perfect mentor for this sort of business. If you’re unable to find one in your area, it’s OK to contact someone in another state section.

Talk to your lender

Before you start shopping for houses,

  1. Speak to a lender to see how much you might be able to borrow.
  2. Remember that borrowing money for an investment property differs from lending money for a primary dwelling. You may be required to make a larger down payment and pay higher Texas landlord insurance costs.
  3. Start by speaking with the bank with whom you do business.

They might be able to assist you or refer you to another form of a mortgage broker. Hard money lenders in Texas may be the most outstanding alternative for this investment.

Purchase your property

It’s time to start looking at residences once you’ve figured out what you can afford to buy. Finding a reputable real estate agent and telling them precisely what you’re looking for is the best way to do so. You may start your search on one of the major real estate search sites, but an agent may be aware of houses that aren’t currently on the market. It’s crucial to work with a real estate agent with whom you get along. This should be someone who pays notice to your requirements and is accessible. They should be able to inform you what kinds of properties rent well in the areas where you’re looking.

List your property

You’ll need to put your rental property on the market and rent it out as soon as feasible after purchasing it. There are various options available to you. You may list it in the newspaper, online, or through a real estate firm, and each option has advantages and disadvantages. Although advertising in the newspaper is a low-cost option, it will likely reach fewer people than if you put it online. A real estate business is a safe choice because many people turn to them first when looking for a rental, but you’ll pay a commission if they locate your renters—listing your house online as a rental is the best option in many circumstances. You may advertise it on Facebook selling groups, Craigslist, or rental websites.

Choose your renter

Most of the most okay landlords are either skilled or natural marketers. All this implies is that they analyze their choices to maximize the profitability of their products (investment properties).


Here are a few examples from Marketing 101:

Marketing mix

Professional marketers frequently begin by considering the “marketing mix,” sometimes known as the “Four Ps:”

  1. Product — Is my product marketable? Can I make it marketable if it isn’t? In other words, can I make it more profitable by improving it?
  2. Price —  What is the maximum profit I can make from my product without diminishing demand?
  3. Place — For most marketers, this refers to the location where the product will be sold. For landlords, though, it’s all about the home’s location, city, or county and how those factors will affect the renters it attracts and the rent it can charge.
  4. Promotion — How much will I have to pay for marketing upfront to achieve maximum demand? And how should I spend it (using which media)?

Thinking about rental properties in such terms can benefit landlords. They may also choose the things they wish to advertise by carefully selecting the residences they buy, unlike most professional product managers.

Target markets

Your target market is the set of people who will “purchase” your goods — or, in your instance, who will be able, willing, and able to rent the specific house.

At its most basic level, this involves determining who will want to live in your home and can pay the rent.

The more you learn about local demographics (such as age, gender, occupation, income, and family size), the better you’ll be up to understanding your target audience. The more profitable your buy is, the better.

Promotion (advertising)

The majority of landlords will use four different forms of media to sell their properties:

  1. Digital — Local classified advertising sites on the internet may connect you with tech-savvy tenants (e.g. Craigslist)
  2. Direct mail — As your renown as a landlord improves, you may receive inquiries when you don’t have any available properties. Create an email list of potential renters so you may contact them later. Also, keep in mind that you never know when a unit will become available.
  3. Advertising — Local newspapers or fliers on local grocery shops, gyms, and other bulletin boards may be the best strategy to recruit tenants in some places. Also, remember to put up a yard sign.
  4. Personal selling — You are unlikely to solicit business by knocking on doors. However, unless you hire a property manager, you’ll most likely be the one showing potential renters around.

You’ll become more confident in picking and implementing your most effective marketing strategies with practice.

Tenant selection

Every consumer is a good customer for confident marketers. For landlords, however, this is not the case.

You’ll need to weed out potential tenants who aren’t going to take care of your property or are actively vandalizing it. It would help if you also avoided those who might not pay their rent on time (or perhaps at all).

Even if you think yourself an excellent judge of character, an interview should not be your exclusive source of information. Much more information is required.

But how do you get it? Though there is no certainty, previous conduct is frequently the best predictor of future behaviour. Background checks are also necessary.

If you have a property manager, it will be their responsibility. However, you should evaluate the information they gather.

Background checks

You’ll have to perform the checks yourself if you don’t have a property manager. You may also hire an internet provider to do it for you.

Look for “tenant background checks” or “tenant screening” on the internet. However, choose a provider with a lot of excellent feedback from landlords.

A good one will disclose a candidate’s:

  • Convictions in the past
  • Credit report and score as of now
  • Based on public data, previous evictions
  • Previous mailing addresses

You’ll need the applicant’s signed consent form to do a background check.

If you have many other, better prospective renters, you might reject an application for a single blem on any of those records. However, if you’re low on options, you might want to delve further.

Do you want to penalize someone for an eviction or a crime that occurred many years, if not decades, ago? A bad credit score is regularly the result of a brief time of unemployment or illness that is now behind the applicant. Will you keep them out because of something that isn’t their fault?

You’re not in the business of providing second chances, of course. However, you should probably be moderate. So you might wish to discuss any concerns you have with the candidate.

Contacting previous landlords

Most other background checks can’t tell you as much as the applicant’s prior conduct as a renter. Request past landlord references and phone them for an off-the-record conversation.

Time spent selecting suitable renters might be the difference between being a successful landlord and being one who is continuously anxious.

Landlord check-ins & maintenance

When it comes to directing your rental property, communication is crucial. In your lease agreement, specify when and how often check-ins or walkthroughs. The lease should also determine which repairs the landlord is accountable for and when those repairs should be made. In Texas, the typical repair time is ten days, but it may be as little as 24 hours for something like a nonfunctioning air conditioner in hot weather.

Best Practice: Clearly define the maintenance and repairs that the lease will cover. When creating them, be sure you follow Texas rental rules.

How to evict bad tenants

Eviction regulations vary depending on the state where your rental property is situated. And you must strictly adhere to them.

Even a little dispute about phrasing or how the notification was delivered might cause the process to last weeks or even months longer than it should.

Eviction without cause

Unless your rental property is in a rent-controlled city, you may usually serve a month-to-month renter with a notice to quit the premises. Depending on local rules, you must generally give 30 or 60 days’ notice.

Termination without reason is the word for this. So there’s no need for an explanation. Perhaps you believe you can locate a renter willing to pay a higher rent. You may also choose to rent the house to a friend or relative. Maybe you need to relocate yourself.

You have the right to force a month-to-month renter to go if you obey the law.

Eviction with cause

Of course, you’ll want to stay away from evicting anyone. Most landlords try to address concerns with difficult tenants in person.

If it doesn’t work, you might be allowed to evict a long-term renter on the following grounds:

  • Nonpayment of rent
  • Violation of local rules governing noise levels and health standards
  • Breach of lease – The renter may have a pet, lease the property or allow too many people to reside there. To constitute grounds for eviction, those things must be explicitly prohibited in the lease.
  • posing a safety or health risk
  • causing considerable property damage beyond normal wear and tear

Don’t go to court depending simply on your word’s trustworthiness. You’ll need extensive documentation, images, or witness testimony to substantiate your claims.

Executing the court order

Your worries are practically over once you receive a judge’s eviction order.

The prudent course of step is to have the order carried out by an impartial law enforcement officer. The mere presence of such an officer is frequently enough to soothe tensions. You’ll also have a trustworthy witness confirming the renter and their belongings were legally removed.

A note on forms for landlords

Many landlords use a lawyer to prepare necessary paperwork (like lease agreements or eviction orders). However, few attorneys are inexpensive. So you can opt to become a landlord and an amateur lawyer.

That will only work if you are willing to put in the necessary time to do your assignment. You’ll need to study your state’s landlord-tenant laws and any applicable federal or municipal regulations. That implies you’ll need a mind at ease with collecting and using knowledge.

If you Google “best legal books for landlords,” you’ll get many results. Just make sure they’re from respectable publications and written by experienced lawyers, and they also cover your state.

Standard forms

Templates for all types of legal forms you’re likely to require are included in good ones. Some examples are:

  • Agreement on Receipt and Holding Deposit
  • Tenant-Landlord Checklist
  • Letter of Acceptance
  • Residential Lease on a Month-to-Month Basis
  • Residential Lease on a Month-to-Month Basis (Spanish Version)
  • Residential Lease with a Fixed Term
  • Residential Lease with a Fixed Term (Spanish Version)
  • Cosigner Contract
  • Disclosure of Lead-Based Paint and Lead-Based Paint Hazards Information

Final thoughts on becoming a landlord in Texas

Being a landlord is the most acceptable decision they’ve ever made for many people.

Owning rental properties may be a lot of effort, depending on how hands-on you want to be. The financial and emotional benefits, on the other hand, can make it all worthwhile – and then some.

Each month, your mortgage debt decreases, but the rent you can collect increases in most years. True, owning a rental property does not make individuals wealthy overnight; however, steadily becoming rich is a very appealing option.

What should you do first to become a landlord? Purchasing a rental home. So, before you take any more actions, talk to a lender about your eligibility.

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