When you purchase more than one home, you can put them to work for you by renting them. Rental property can create a semi-passive income for you because it only requires periodic upkeep.

The landlord must maintain the home, make repairs, and typically, care for the lawn. Otherwise, the tenant lives there and takes care of the day-to-day cleaning of the interior of the home.

Texas Landlord FAQ

If you’ve never purchased a home for use as a rental property, read up on the topic of becoming a landlord first. We compiled this frequently asked questions (FAQ) document to help you get started.

What should a lease document include?

A first-time landlord should hire an attorney as a consultant to obtain advice and guidance in setting up their accounts, accounting methods, and specific rules. You can save yourself money by using EZlandlordforms.com to obtain lawyer-written lease agreement forms specifically for Texas landlords. Otherwise, you would need to have the attorney draft a lease which can cost significantly more.

Does a Texas lease have to be in writing?

No. The state of Texas recognizes verbal leases. In archaic terminology, these are known as “a gentleman’s agreement.”

How long does a landlord have to fix something in Texas?

If something breaks at your home that you rent, as a Texas landlord, you have seven days to repair any major item that breaks at your rental home. The clock starts as soon as the tenant apprises you of the problem. Texas prioritizes good living conditions, so landlords get even less time than seven days to repair the following items:

• Heat,
• Air conditioning,
• Running water,
• Sewage,
• Broken pipes,
• Flooded areas.

Because these items affect the health and safety of the individuals in the home, the state prioritizes their repair.

How much can a landlord raise the rent in Texas?

Texas does not have any rent control laws, so a landlord can raise the rent as much as they like. However, once a tenant forms a lease agreement with a tenant, they cannot raise the rent until the lease period expires. For this reason, most landlords use a one-year lease. This process allows them to raise the rent a reasonable amount when necessary.

What is a typical raise in rent?

While not Texas law, typically, a landlord would use a cost of living increase annually. This means that the rent would only change by a few percent, less than five percent under most conditions.

What can you do if a tenant files a complaint with the state about you?

Texas state law protects tenants who blow the whistle on slum landlords. If you don’t make repairs and the tenant files a complaint, your only recourse is to make the repairs. You can file a written response with the state and include photos showing that you have made the repairs. Texas state law includes six specific actions no landlord can make after a tenant files a complaint. The landlord cannot:

• File eviction paperwork,
• Deprive the tenant of services in the home,
• Deprive the tenant of the use of the premises,
• Raise the tenant’s rent,
• End the lease,
• Act in bad faith to interfere with the tenant’s rights as enumerated in the lease agreement.

What forms of payment can you use to accept rent?

Most people traditionally accepted rent checks, but those days have gone by. You can still accept checks, but Texas state law does not require you to accept any specific form of payment. You must, however, track and record each payment, so you can accurately report your income on your federal and state income tax. You can accept cash, check, money order, credit card payments, debit card payments, direct deposit to your bank, or use an electronic wallet app like PayPal, Cash App, Venmo, Payoneer, etc.

How do you set your rent?

Unless you own the home outright, you’ll have a mortgage. You need the rental payments to cover your mortgage payment. If you can make money on it, that’s nice, too, but ultimately, you need to pay off the mortgage. If you charge the amount of the mortgage payment plus $100 or 10 percent, whichever is larger, you can make some money from the start. The ideal situation is to find a reliable tenant who loves the home and wants to take care of it while renting it from you. They’ll pay you on time every month, so you can give that money to the bank.

Can you turn your home into an Airbnb?

You can rent each bedroom separately through sites like Airbnb or Vrbo. This lets you charge a minuscule daily rate that attracts people and keep the rooms rented. You’ll need to clean the rooms after each person stays there though. That makes operating that type of rental property less of a passive income stream and more of an active one.

Becoming a landlord can turn into a lucrative and enjoyable undertaking. You meet a lot of people. If you enjoy rehabbing homes or renovating, you can have fun fixing up the homes you purchase, too. Start with one home and build your real estate portfolio.