One of the questions that may be on your mind if you’re a real estate investor is: Do I really need a professional Dallas property manager?We say yes, you definitely need a property manager in Dallas. If you want to self-manage your investment, you can. But, you have to treat it like a business. You have to dedicate a lot of time and resources to keeping up with the laws and regulations that are always changing. It can’t be a hobby.There are a lot of important reasons to hire a Dallas property management company. Professionals will save you money on things like vacancies, terrible tenants, and deferred maintenance. Your management company will have systems and processes in place that ensure you and your investment are protected. They’ll be responsive to your residents, ensuring the continuity of your cash flow and the stability of your property.Property managers aren’t emotional and they treat your rental home from a business point of view.The most important reason to work with property managers, however, is that it reduces your risk and liability.
New Rental Laws in Dallas Require Proactive Management
Managing your own property is possible if you’re here and you’re active with all the regulatory changes. There are new requirements coming from the state and the local municipalities. Last year, a law was enacted that requires all Dallas rental properties to be registered and to apply for a certificate of occupancy. You cannot rent out a property in the Dallas market without this registration and certification.Historically, Texas has always been a landlord-friendly state. It still is, especially compared to many of the other states on the east and west coast. However, the state has become more aggressive on behalf of residents and their rights. A lot of new Class A and Class B apartment complexes have been developed, and last year there were nine different pieces of legislation that passed the statehouse to become law to protect residents.
Common Legal Mistakes Made by Self-Managing Dallas Landlords
One of the most important new laws that came out of last year’s legislative session is related to late fees. You can now only charge up to 12 percent of one month’s rent for a late fee. If you charge an amount over that, you’ll need to deliver a good reason to the courts. Otherwise, it will be capped.You also cannot charge for late fees during an eviction. The only money you can collect when you’re in the eviction process is the unpaid rental amount.Not only do you have to follow this law, you may also have to change your lease agreement. If your current leases say that your late fee is 15 percent of the rental amount, it’s going to need to be changed and rewritten.A lot of self-managing landlords also don’t know that they have 30 days to return a resident’s security deposit with a reconciliation of any money that was kept. This is a timeline that the courts are serious about enforcing. If you don’t return the resident’s deposit within that time period, your resident can take you to court.Maybe the place was destroyed and you decided to keep the entire deposit. You still need to send an itemized reconciliation showing what the money was spent on, and you have to send it within 30 days. Otherwise, the resident will not only get the full deposit back; they’ll get three times the deposit amount. That’s a lot of money coming out of your pocket. You have to send the reconciliation or else lose a lot of money.
Prepare for Longer Eviction Periods
Dallas rental property owners usually regret managing their own homes when they have to evict a tenant.With additional new laws, evictions in Dallas are now going to take a bit longer. A year ago, the state increased the amount that can be disputed in a small claims court action. It went from a $10,000 limit to a $20,000 limit. So, courts are seeing more cases that were once settled in small claims court.This extra pressure on the Dallas judicial system means that you will have a backlog when it comes to getting a court date to evict a resident. You could now be waiting 60 days or even longer to remove a resident from your property.Many self-managing landlords mistakenly think that when they want to evict a resident, they’ll take care of the whole process within days of the rent being late.It’s actually going to be two or three months now, which is another excellent reason to work with a professional property manager.When it comes to court protections, the line is moving more and more away from the landlord and towards the resident. This is a trend that’s gaining strength across the country, and Texas is no different. If you’re going to self-manage your investment properties, you’ll have to be prepared for additional legislative changes that are sure to arrive in the future.We specialize in helping Dallas landlords and rental property owners manage their risk and liability, especially when it comes to the law. We stay up to date on all the legal changes, and we closely follow federal, state, and local laws to ensure you’re in compliance and safe.Contact us at Mynd Property Management if you have any questions about professional property management in Dallas. We’d be happy to help you with your rental properties.If you want to learn more about real estate investing, we also provide other opportunities to connect with us and learn more about investing in Dallas. You can visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.