Utilizing up to date market data, capital return rates and projections, our team researches and identifies ideal investment opportunities in the Central Texas region. AIR Property Group specializes in single family, condominium, multi family, and commercial real estate. We partner with multiple lenders offering the best rates. Each property is analyzed for the best return. This includes identifying the ARV and premium rental rates, offering the best ROI in our hot market.
It's important to stay informed during and after the purchasing process. We keep you updated on changing market conditions, and offer comparable market data highlighting your property's estimated market value. We also remind you of important deadlines regarding filing exemptions and property tax protests.
AIR Property Group offers full service property management. We manage short and long term single family homes, condos, duplex, triplex, fourplex and apartments. Offering tenant and owner portals for efficient communication and quick owner disbursements. Please reach out to our team today schedule your consultation.
We close our books on the 15th of the month. Your owner portal allows you to access each monthly statement and all receipts in a PDF format 24 hours a day. Your ACH fund transfer occurs as soon as possible, after all funds from tenants have been collected and cleared, usually by the 10th of the month. However, delays can occur, and we must allow for holidays and weekends. Management statements include a monthly and year-to-date profit & loss statement for each property, a detailed activity page showing each transaction for each property, and a copy of invoices. This is important as most property management companies do not provide copies of invoices. We believe in transparency.
Are you certified and carry insurance?
We carry General Liability insurance and Professional Liability insurance (commonly known as Errors and Omissions).
While it's not required to operate as a property management company, AIR Property Group is currently seeking the Texas Residential Property Manager certification. This certification may save you money on your home owners insurance. We'll notify you once this certification is complete. Several classes were postponed due to Covid.
Requirements for companies to get the TRPM certification are :
Be a member of Texas REALTORS®
We strive to keep informed about a property's condition through several systems. This includes striving for well-qualified tenants, annual property manager surveys, and our in-house maintenance tech visits.
The biggest key to a property being well cared for is leasing to a well-qualified tenant. We find that well-qualified tenants are motivated to take care of the property to remain "well qualified".
Your property manager will be available annually to discuss the property condition and if a lease renewal is in order.
NOTE: The on-site survey is performed by your property manager. This requires your property manager to have firsthand knowledge of your investment.
We have experienced maintenance technicians on our team that respond to maintenance requests within 24 to 48 business hours, perform quality guaranteed repairs, completes a 7-Point Maintenance CheckUp during each visit, and can also perform several different trades in one call. A less expensive way than calling different vendors.Over time, a property’s systems and appliances will deteriorate. By evaluating these, you will be more prepared for needed improvements and more likely to discover potential maintenance items before they become larger, more expensive problems for you. Also, when it's time to exit, a well-maintained property sells more quickly.
Maintenance of rentals involves more than simply responding to service requests and sending out a repair technician to remedy the problem. Similar to maintaining a vehicle, a structure and its components have life expectancies e.g. heaters, air conditioners, range, carpet, and paint. The life expectancy of these components and the building exterior components vary, as examples the roof covering and paint. These also change with the type of tenancy and location involved, say college students compared to young professional singles, and from coastal properties to those in the panhandle, and from West Texas to East Texas. Texas is a vast state with various climate conditions unique to each area and the location impacts not only the exterior but also the interior components of each dwelling.
The impact of the property location influences the normal wear and tear on the structure and on the building components. For instance, a rental property located in Corpus Christi where it is often hot and has salty humidity may have to be painted more frequently than a similar property located in Dallas. Likewise the air conditioning in coastal climates can be expected to wear out sooner than those in similar properties located in West Texas which has cooler evenings and a shorter hot season, which means it doesn’t need to run as frequently. It is important for the property manager to be aware of what these life expectancies are for their area so they can inform the property owner of what to expect concerning maintaining the building and the need for various kinds of maintenance. This is especially true for out of area owners who will often be unfamiliar with the location of the investment property. Regardless of the of property location, all properties will experience five different kinds of maintenance issues:
These maintenance tasks involve no service request from tenants and are ordered by the property manager on a scheduled basis. Routinely, if required by the lease agreement, the lawns may be mowed on a monthly schedule and fertilized on a biannual schedule, and storm gutters may be cleaned monthly. Similarly, if provided in the lease, the property manager may arrange for scheduled swimming pool service on a schedule to properly maintain chemical levels and cleanliness of the pool.
These tasks are unlike routine maintenance tasks as the activity isn’t intended to provide a direct service to the property but is instead implemented to prevent a building component from failing. Examples of preventative maintenance include servicing the HVAC equipment at the start of summer and winter, inspecting and cleaning fireplaces of combustible residue accumulations in the chimneys at the start of winter, and the annual pumping of septic systems to reduce the likelihood of sewage backing up into the residence.
A lot of the property manager’s time is spent on handling corrective maintenance issues. The proper handling of service requests quickly and in accordance with the property code is expected by both tenants and owners alike. When a property manager evaluates a service request and moves it forward for service, it is a corrective maintenance function. This covers anything between repairing a fence that is falling to replacing the roof covering that is causing a leak.
In order to improve the overall appeal of the rent property, the property owner may wish to make general improvements to open it to more potential renters. For example, a rent house may be located in a superb neighborhood, be in sound condition, and have great interior amentias. If the yard is not in good condition, the property manager may suggest to the landlord that a new lawn with irrigation system be installed or that a covered patio be installed so that the yard can be enjoyed. Adding ceiling fans to the living room and bedrooms, or wainscoting to a wall to accent it are other examples of cosmetic maintenance items.
When a property does not receive maintenance to keep it functioning properly or when it is allowed to slide to the point of being an eyesore, the term used to describe the condition is called deferred maintenance. This condition is not limited to rent properties as many homeowners allow their residences to experience deferred maintenance either from a lack of knowledge as to how to properly care for a property or due to a lack of money to fund the maintenance. Many astute real estate investors look for homes with deferred maintenance to purchase as they often know that the owner may not have the money to make the repairs and so are a good candidate to approach about selling the property. Deferred maintenance items are almost always repairable and can be returned to the sales or rental market for profit.
Experience has taught us that the better the condition your property is in, the better the tenant you will attract. The better the quality of the tenant, the lesser the likelihood of a property is intentionally damaged. They have worked hard to get to where they are and they don't want to mess up their credit.
This means that the property should be:
Many residents begin to make up their mind about your property the moment they pull up to the curb. If the yard, entrance area, and interior look sharp, the agent will be much more successful in leasing your home. A quality resident is motivated to take care of your home and will leave it in good condition when they go. This means lower operating costs for you!
Federal Fair Housing laws are demanding and the fines are huge. Our job as your agent is to protect you from discrimination lawsuits. We take Fair Housing laws very seriously reserve the right to select and approve the most qualified applicant. We can call and present the applicant information to you if requested, but we have the final say. If an owner refuses to approve the applicant because of discriminatory practices we will unfortunately be forced to cancel our property management contract immediately.
In Texas, most residential leases require a security deposit. A security deposit helps cushion the landlord against property damage caused by a tenant’s negligence or carelessness. In most cases, the security deposit is equivalent to one month’s rent.
According to the Texas security deposit laws, landlords must follow specific rules when handling a tenant’s security deposits. If they don’t, there are bound to be consequences.
No, it does not. Landlords have a right to charge whatever amount they see fit.
While this may be the case at a state level, city and county laws may have limits on the exact security deposit amount. Landlords may also negotiate the amount according to certain criteria. For instance, they may charge according to the tenant’s rental history.
No, they don’t. Landlords don’t have to give the tenant a written receipt for the deposit.
Unlike other states, Texas security deposit law doesn’t dictate how landlords should store a tenants security deposit.
The previous owner must forward all security deposits to the new landlord when a property changes hands during the lease period.
The previous landlord will still be held accountable for the security deposit so long as the renter hasn’t received a Change of Management/Ownership notice from the new owner. Under Texas rental laws, once the notice is given the new owner is solely responsible for the security deposits.
The notice should state the new landlord is now in possession of the security deposits and also state the exact amount of security deposit received.
No, it isn’t required. A walk through inspection when both the tenant and the landlord go through the rental unit to inspect it. This is because a renter needs to leave the rental property the same condition as when they moved in.
Yes, they can. Like in other states, Texas landlord-tenant law specifies that landlords have a right to keep all or part of the tenant’s security deposits depending on certain situations.
Landlords may keep all or some of the security deposit at the end of the tenancy if the renter:
Examples of normal wear and tearExamples of property damageTarnish on bathroom fixturesKeys not returned at the end of the tenancyDirty groutMissing outlet coversA few small nail holes in the walls from hanging picturesMultiple holes in the wallsLoose door or handles on kitchen or bathroom cabinetsBroken windows, doors, bathroom vanity, and so on.A small amount of mildew forming in grout lines in the shower tilesExtensive water damage to hardwood floorsA few small stains on the carpetHuge stains on the carpet–Damaged or missing smoke detectors
In this case, the landlord has a right to mitigate. Texas rental law states that a landlord can charge reletting fees of up to 85% of one month’s rent. Or they can deduct their actual costs to find a new renter when a lease isn’t fulfilled.
Unless the security deposit was claimed to cover loss or damage, landlords must return the security deposit at the end of the lease.
On the day the tenant moves out of the rental unit, the landlord has 30 days to refund the deposit to the tenant. The only exception to this general rule is if the landlord doesn’t have the tenant’s forwarding address. In this case, the landlord must wait until the tenant provides it.
The landlord can also demand an advance notice of the move as a condition for refunding the deposit. That being said, a landlord can only do this if this requirement was highlighted in the lease or rental agreement.
If there is damage to the property, the landlord has a right to make deductions. In this case, the damages must be in excess of wear and tear. Examples of property damage that warrant security deposit deductions include:
A landlord must send the renter an itemized list of such damages, their estimated cost of repair and the balance of tenant’s security deposit. If the landlord doesn’t, then they forfeit the right to make any deductions from the security deposit.
The landlord may also need to pay for the financial loss the tenant has suffered in his or her efforts to recover the deposit from the landlord.
However, the landlord doesn’t need to give the tenant the list of items to be deducted if:
Wrongfully withholding a tenant’s security deposit may attract penalties in Texas. These penalties usually include paying for the tenant’s attorney fees plus paying the renter three times the security deposit amount.
This overview of the security deposit laws in Texas is only meant to be informational. For specific questions, please seek help from a qualified Texas attorney. You could also review section 92.101-109 of the Texas Property Code for the full scope of the law.
The like-kind exchange is one of the most tax-favored transactions, but many technical requirements must be met for the exchange to work. Sellers are confronted with an array of risks that can lead to a failed exchange transaction, but they achieve the favorable tax benefits of a like-kind exchange if they have good advisors and follow the rules.
Real estate professionals are likely familiar with the basic rules of like-kind exchanges, in which sellers of real property may defer the gain on the sale of real estate if they reinvest the sale proceeds in other like-kind real property (a similar property that can be exchanged without incurring any tax liability). The idea that a seller can defer potential gain from the sale of real estate by reinvesting into other real estate sounds like a great idea, at least at first. Later, when mistakes occur, what seemed like an easy real estate swap becomes a nightmare. A failed exchange places the seller in a double bind. The seller has reinvested all of the sale proceeds from a sale into other property, but he still owes tax on gains from the sale.
An exchange of property can be simultaneous, but the seller typically hires an intermediary (called a "qualified intermediary") who acts as a middleman to facilitate the real estate swap. The process usually goes like this. The seller sells a piece of property. The qualified intermediary receives and holds the sale proceeds while the seller locates a replacement, like-kind, real property. Once a replacement property is found, the seller instructs the qualified intermediary to purchase it. Essentially, the purpose of the qualified intermediary is to avoid the seller having receipt of the sale proceeds. If the seller receives the sales proceeds of the first property, she loses the benefits of a like-kind exchange.
Under a like-kind exchange, the seller must identify replacement property within 45 days after the sale of the first property (known as the identification period) and acquire the replacement property within 180 days after the sale (known as the replacement period), or sooner if the tax return is due.
The following are mistakes commonly seen in botched like-kind exchanges.
Benefiting from a like-kind exchange takes advance planning. Real estate attorneys and title officers can talk for days about sellers who miss the opportunity to make a like-kind exchange by not realizing the opportunities until they arrive for closing.
When a seller walks into closing and realizes only then that she could have protected the gain on the sale by purchasing like-kind property, it is too late.
The seller has 45 days to identify replacement property—a short amount of time to identify, negotiate, underwrite, finance, and complete due diligence for the purpose of property.
Sellers commonly lose track of time and do not have a clear idea when the 45-day period ends. It begins on the date the seller sells his property and ends at midnight on the 45th day after that property is sold. The seller could fail to realize that the 45th day could end on a holiday or weekend. If he wishes to benefit from a like-kind exchange, he should mark specific deadlines on a calendar.
Another common mistake is for a seller to identify only one replacement property, but then revoke the identification near the end of the 45-day period and miss the deadline. If there's a possibility the seller might revoke an identification, he should leave ample time to select another potential replacement property before the deadline.
The seller is subject to two critical rules on identifying multiple replacement properties:
Under the three-property rule, the seller can identify up to three properties as potential replacement properties without any concern over the values of the properties. Under the 200 percent rule, the seller may name more than three potential replacement properties, but the combined value of those properties cannot exceed 200 percent of the value of the sold property.
The seller should plan for the likelihood that he will change his mind about a designated property and run over the 45-day limit by naming multiple potential replacement properties.
As previously discussed, the seller has 45 days to identify replacement property and 180 days to close on the purchase of the property. The exchange period begins on the date the seller transfers the relinquished property and ends at midnight on the 180th day. Usually that is ample time to close, but several problems can occur.
For instance, the 180th day could land on a holiday or weekend when title companies are closed, thus preventing the closing from happening. Another potential problem is the 180-day period can end early if the tax return for the year is due. The cut-off period for the tax return filing would mean an exchange that started late in the tax year could pose a risk if the seller files her tax return on March 15 or April 15.
Participation in a like-kind exchange is not a time for working with amateurs, so sellers should use only a reputable and experienced qualified intermediary. Unfortunately, the marketplace for qualified intermediaries is unregulated, so it would be easy for the seller to select an inferior one.
The qualified intermediary holds large sums of money, and there are highly publicized stories of less-than-scrupulous qualified intermediaries mismanaging or even losing exchange funds. A seller whose exchange funds become unavailable faces not only losing the funds for the replacement purchase, but also a potential breach of contract lawsuit for failing to complete the exchange.
The qualified intermediary requirements are formal and precise, and a qualified intermediary can take actions or cut corners that expose the seller to the risk of a botched like-kind exchange. Some have been known to play games with the identification rules by switching pages in the documentation to enable the seller to identify replacement property after the 45-day period expires. Sellers could face the risk of tax fraud if they play along with these scams. There are strict rules preventing a qualified intermediary from distributing or making proceeds available to the seller before the end of the 45-day period.
Most reputable title companies or banks maintain a qualified intermediary business staffed with competent personnel. In addition, there are many capable private qualified intermediaries unaffiliated with a title company or bank. Some real estate attorneys also serve as qualified intermediaries.
Receiving flawed tax advice from amateur intermediaries or financial institutions is another common mistake. Taxpayers involved in a like-kind exchange are often tempted to follow advice from staff of the intermediary or from other financial institutions, perhaps from someone who is neither an accountant nor an attorney but who nevertheless gives tax advice.
The tax requirements of a like-kind exchange are technical and require careful consideration. For example, a seller identifying a replacement property meets Treasury regulations only if the document identifying the replacement property is a "written document signed by the taxpayer and hand delivered, mailed, telecopied, or otherwise sent before the end of the identification period to either . . ." Is an email sufficient for this designation requirement? How is the email signed? Should DocuSign be employed to attach signatures to a document? Is the seller better off designating property with a signed document, converting it to a PDF file, then emailing the PDF? If there is a defect in the signature, such as a misspelling, is the document still acceptable? If there is no signature on the email other than the conventional email signature block, will the IRS or the courts respect it?
Again, these issues illustrate the technical nature of the exchange requirements, and taxpayers should rely on experienced and knowledgeable advisers, not amateur intermediaries or financial institutions, for guidance.
One of the core rules of a like-kind exchange is that the property sold and the replacement property must both be investment properties or trade or business properties. Sellers make mistakes when they lose sight of these fundamental rules.
For example, personal-use property such as a residence will likely fail as transferred or replacement property. Sellers often try to convert residential or vacation property into investment property or trade or business property by offering it as a rental prior to an exchange. The IRS provides a safe harbor for exchanging or acquiring a second home or residential property in an exchange. One rule requires 24-month ownership before or after the exchange, minimizing personal use to 14 days or 10 percent of the number of days the property is rented at fair market value during the year.
Sellers wanting to include personal-use property in an exchange should proceed with caution.
Another common mistake occurs when sellers try to exchange property held by a partnership or LLC. The seller might be in a partnership or LLC with others, some of whom want to undertake a like-kind exchange, while others do not. A like-kind exchange concerns the exchange of real property, not partnership or LLC interests. If the seller wishes to exchange property held in a partnership or LLC, she should arrange for transfer of the property from the partnership or LLC and undertake the exchange acting as an individual owner.
Sellers often attempt a like-kind exchange with a related party. Generally, this is ill-advised without attention to the detailed holding period rules. The IRS is concerned about financial chicanery or parties playing games by dealing with related persons.
The like-kind exchange rules permit an exchange with a related party, but they impose a time requirement of 24 months. This means both the seller and the related party must hold title to the property acquired in the exchange for a minimum of 24 months. If either party disposes of the acquired property prematurely, both parties lose the favorable tax treatment of an exchange.
If a related party dies, the parties are relieved of the 24-month rule. The parties are not subject to the restriction if either experiences an involuntary conversion, such as a destruction of property by a severe storm.
The definition of who is related is not straightforward. For individuals, related parties include a spouse, brothers, sisters, ancestors, and lineal descendants. If one owns more than a 50 percent interest in a corporation or partnership, then the corporation or partnership is the related party. There are many facets to identifying who is a related party, and sellers should proceed carefully.
TOP 5 FREQUENTLY ASKED QUESTIONS
ABOUT 1031 EXCHANGES
WHAT IS BOOT?
Not all property transferred in an exchange must be of like-kind. Other property or money can be transferred in addition, without invalidating the exchange. Such non-like-kind property is called "boot."
In general, boot is only taxable to the extent of the realized gain. Transactions involving boot must be very carefully structured so as not to invalidate the qualifying portion of the trade. The receipt of money or non-like-kind property will cause the realized gain, if any, to be recognized to the extent of the sum of money and the fair market value of the property received.
In other words, you have to pay taxes on any money or other non-like-kind property you receive in an exchange. Properly configured exchanges are structured to eliminate or minimize boot.
WHAT IS "CONSTRUCTIVE RECEIPT?"
Constructive Receipt occurs in an exchange when a taxpayer has the unrestricted right to access cash or boot, whether or not such right is exercised, and regardless of whether there is actual or physical receipt of the cash or boot. Any cash or boot received by the exchanger will cause recognition of gain (i.e., taxable income). If your relinquished property closes and the buyer's take title without having an exchange opened, the IRS considers the transaction as a taxable event. It's important to open your exchange prior to the close of escrow.
WHAT IS "LIKE-KIND?"
The words "like-kind" refer to the nature or character of the property, not its grade or quality. For example, real property is not of like-kind to personal property because they are of a different nature and character. Conversely, vacant land, for example, is of like-kind to improved property as the two differ only in their grade/quality.
Raw land, condominiums, single family residences, shopping centers, apartment buildings, farm and ranch land, commercial real estate, industrial property, second homes converted to investment property, and almost all other realty are of like-kind with respect to their intrinsic nature and character and may, therefore, be interchangeably exchange. With limited exceptions, any real estate meeting the above tests can be exchanged for any other real estate.
In addition, the rules accepting incidental property from the identification requirements should not be construed as meaning such property will be considered like-kind realty. Remember, the final regulations for "Multi-Asset/Personal Property" exchanges provide for very narrow like-kind qualification of any non-realty business or investment property, which may be transferred together with real estate in your transactions. For example, any furniture, manufacturing or other equipment, autos, or art work, etc. transferred in addition to real estate is not like-kind to realty received as replacement property.
The definition of realty is determined by each state in the United States, and any person wishing to exchange should determine the definition of realty according to the state or states where the relinquished and replacement properties are located.
CAN I EXCHANGE MY PARTNERSHIP INTEREST IN REAL ESTATE?
No, with extremely limited exception. After much confusion, the Internal Revenue Code was amended in 1984 to specifically prohibit the exchange of partnership interests. Similarly, the exclusion clarified the law that a partnership interest, whether general or limited, cannot be exchanged for an interest in real property without recognition of gain. Some highly technical and relatively complex structures have been employed in an attempt to legally circumvent the restrictions against exchanges of partnership interests. Skilled legal and/or accounting counsel must be engaged for such transactions.
WHAT KIND OF REAL ESTATE QUALIFIES FOR A 1031 EXCHANGE?
Generally, real property of "like-kind" which is not identified as condemned property (a 1033 exchange) or your personal residence (a 1034 exchange), and was not acquired for resale or considered inventory or dealer property may be traded under the I.R.C. Section 1031 exchange rules. The property relinquished in the exchange must have been either productively used in your trade or business, or held for investment, i.e., you must have effected a "qualified use" of the property. Likewise, it must be your intention as you acquire your replacement, to either hold that property for investment or use it for a business purpose.
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