Starting a Rental Property Co in Texas

5 Replies

I'm moving to Texas and I want to start a rental property company.  What licenses do I need as the owner to make sure that everything is legitimate?  What licenses does the person leasing the property for me need as well?

In Texas you need to have a broker's license to be able to manage someone else's properties.  Your employees and agents can be the person leasing the houses as long as you are the broker on the deal and you are liable for all the transactions.  If you are already a broker then you may be able to just take the exam in Texas or may even qualify with years of experience.  If you are not currently a broker, you need to have at least 4 years of experience as a realtor as well as a minimum education program and testing before you can apply for the brokers license.

check out trec.texas.gov

@Michelle L Thank you for the information. 

@Christopher Gilbert  I want to purchase an apartment building so I'm assuming that everything that you just said applies as well.  What if you're someone that's just getting into  real estate investing?  Should I partner with someone that has the experience or just breakdown and get a part time job as a leasing agent?

If you only plan on managing an apartment complex that you own or have an ownership share in then I beleive that you are OK and do not need anything special.  But if you do not have any experience in property management and am new to investing I highly recommend hiring a property manager for at least the first few years since certain areas can have varying code requirements for apartments.  For example, city of Austin has some rediculous energy efficiency requirements as well as ever-changing codes that take effect on properties with an ownership change regardless of how old the building is. 

Which means that even if you buy an older apartment that should be grandfathered, the fact that you are a new owner of the property means you may be responsible for getting the building up to current code requirements.

I recommend going to a local real estate club and look to partner with some experienced investors in your area on the first deal or two so that you can learn the ropes much quicker.

Getting a job as a leasing agent will allow you learn some of the ropes but those jobs typically do not pay very well and you might be better off just getting your real estate agent license and start the four year clock until you can get your brokers license.

Property management also has one of the highest litigation rates which means that most brokers severly limit who can manage properties under their umbrella and most will not allow you to manage other properties yourself if you report to them.

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