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Archive for the ‘texas’ Category

As a remote real estate investor, I am reliant on my local team to help me with the management of my properties. With Hurricane Ike threatening the Texas Gulf Coast, I called early Wednesday to ask the property management firm to board up the property. I was particularly concerned about a row of windows set into the roof that faced east, as they had leaked in the past and were the most vulnerable part of the house.

Not only did was the answer, “we don’t do that“, but they couldn’t even recommend someone for me to call. The insurance agent, also local to the area, was also quite worthless, they couldn’t help me out either. Pointing out that it was in their best interest to help me protect the house got me nowhere.

I then called my tenant. She had also called property manangement and asked for help boarding up the house and gotten a similar unhelpful response. There was boards for the lower windows and she had taken care of those, but we were missing the boards for the clearstory and she did not have a truck to get the boards or a ladder to access the roof. She also had had recent surgery and wasn’t up to climbing up on the roof, and quite frankly I didn’t want her to. It was a job for a professional. We both agreed that the property management firm wasn’t living up to the spirit of what they were supposed to do.

It took me close to 48 stressful hours to get the problem resolved, only 8-10 hours prior to Ike’s arrival. The water had already started rising due to the storm surge and flooding some areas. Luckily my mother lives in the area and could pay the service provider .. as he wasn’t taking credit cards. Do you agree with my tenant and I that property management is supposed to take care of these sorts of issues? At the very least, you would think that a local business would have a list of contractors and handyman services I could call.

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I own two SFR in Texas, and one unfortunate aspect of investing in real estate in Texas is the high property taxes you pay. It varies from county to county but usually the prooerty tax is about 3% for non-occupant owners.

The 3% hit is one reason I’ve hestitated at looking at any high price point real estate in Texas, and also why I haven’t bought more TX RE, my purchases have been at the 100K level.

So when I heard there was a change in the winds at the National Wealth Builders Expo a couple of weeks back, my ears perked up. Today I went a’ googling to see what the story is.

I found an article in the Houston Chronicle that indicates that the school taxes would be shifted more to business. Note however that if you put your properties into an entity and that entity has more than 300K of gross receipts you would not be exempt.

I dug out my Nueces County Consolidated Property Tax statement which is the nastier one of the two I get. The school taxes are hefty. Of my tax bill of $3245.46 the ISD (independent school district) taxes are $1610.66. Not to mention an additional $246.71 for a community college.

Could be a significant savings.. I would certainly look into buying more TX real estate if this comes to fruition.

Now that I know the name of the initiative:
“Texas Tax Reform Commission Plan”, google found a lot more information for me. The governor’s site has a report on it. Looks like it is a done deal.

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I thought I would capture some of my observations of the Padre Island Real Estate market. With Corpus Christi appreciating 12% (a figure almost unheard of in Texas) there has been a lot of investor interest, so perhaps this entry in my blog might be of use to someone. To be honest I haven’t looked at it for six months, but I have been tracking it for over two years and have made several trips there.

Padre Island is a barrier island near Corpus Christi. The residential section is incorporated into the City and very close to the Padre Island National Park. Being so close to the ocean, the real estate rental market there is a mixture of long term and short term rentals. There is a lot of canals so many condos and homes are on the water. Houses that are not on the water are called “dry lot” houses.

Padre Island has gone crazy. It’s one of the last affordable places where you can buy on the water and there has been a lot of investor interest. There is a lot of development planned and the big news is the packery channel plans (so boats have easier access to the water), the land near it just skyrocketed.

There are two tourist seasons on Padre. During the summer most of the vacation rentals are by Texans for a weekend or a week. The other season is during January, February and March, when the “winter Texans” drive down for 2-3 months from the cold midwest. These folks are generally retired and live in places like Minnesota. They often settle on a particular property to stay in year after year and look forward to meeting up with all their other winter Texan friends. Year round residents are a mixture of commuters, retirees and folks that own business on the island.

Houses on the water have really appreciated, unfortunately I don’t have stats for those, but my dry lot house appreciated about 20% over 18 months.

Long term rentals have been dampened by the work on the causeway which should be about done.

It’s really tempting to buy a condo on the water. An older one is still under $120-150K. All the newer condo/townhouse developments are more upscale. However when I was there in January there was a glut of the new ones on the rental market. The dry lot houses rent easier. You have to think of your market, not everyone can afford the high rents and if they can, they are likely to want the space and privacy that a SFR affords them.

Is it too late to get into the Padre Island market? Certainly difficult to buy anything that will cashflow anymore. Especially if you are looking at the vacation rentals. You would be investing for break-even and the appreciation. I think that it is an area that will continue to draw retail buyers as they retire, you just have to ride out any short term hiccups likely in this economy.

One thing to know about Padre Island is that the carrying costs are very high. You have to carry flood, fire and wind insurance and like elsewhere in the Texas the property taxes are high.

The Padre Island real estate market is different than the rest of Corpus Christi, it is more expensive but the appreciation has been higher.

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Just got word of a potential deal. The catch? You have to close by April 29th with all cash. Looks pretty good though.

Purchase price: 93, 500
Comps: 112-118K
Potential rent: 1150-1250

Two story 4/2.5 brick facing on the front, sliding on the back.
two living areas.
Estimated closing costs 2,200, will need carpet and paint and some fixtures.
garage is 1.5 as workshop has been added.
4 years old, $240/year HOA. 2278 square feet.

Location: Converse, TX (surburb of San Antonio)

(updated to reflect it is a 4 bedroom not 3)

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