Key Takeaways
- Renting out a Houston property requires strict compliance with Texas rental laws.
- Proper marketing, leases, and repairs are essential to avoid legal and financial issues.
- A licensed property management company helps ensure compliance and steady income.
One of the most effective ways to build long-term wealth in Houston is to rent out your property.
However, Texas is not a place to deploy the do-it-yourself approach at your risk. For property owners who manage their units for rental purposes, the Texas Real Estate Commission (TREC), local Houston rules (new short-term rental requirements), and the Texas Property Code outline detailed obligations and responsibilities.
In this guide by Keyrenter Houston, we will walk you through the process of renting out your property from the pre-listing stage to the move-out phase. Additionally, we will highlight Texas-specific requirements and explain why getting a professional property management company is often the best choice in Houston, Texas.
Have a Strategy
Before starting the rental property investment, you need to decide on the best strategy for your property. If the property is a single-family home, then the long-term leasing (12-month terms) will be a suitable option. Texas does not have citywide rent control.
However, with the Governor’s approval, municipalities can have rent control during disaster-related emergencies. Since there is no rental price cap, landlords use the market rates within the confines of fair housing and lease terms.
Short-term rentals are also permitted in Houston. However, from 2025, operators of such properties need to be registered and obtain a certificate.
Landlords who operate short-term rentals are expected to comply with use restrictions, undergo annual human-trafficking training, and provide emergency contacts that operate 24/7.
Plan for Texas Legal Compliance
Texas has unique safety and habitability standards. Some of them include;
- Floodplain disclosure: Landlords are required by Texas law to provide tenants with written flood notices if the property is in a 100-year floodplain.
- Health and Safety Repairs: After proper notice from the tenant, the landlord must repair problems that affect the tenant’s health and safety.
- Utility interruption: Except in emergencies, serious repairs, or construction, landlords may not interrupt utilities. Doing so can attract liabilities.
- Smoke alarms: Working smoke alarms must be provided by landlords.
- Security: Every rental property must have recommended security devices (like door viewers, window latches, keyless deadbolts). By the seventh day after every tenant turnover, locks must be rekeyed.
Market the Property in Line With Fair Housing Law
Marketing your rental property and screening tenants should follow the Texas Fair Housing Act.
This act is similar to what is obtainable with federal protection. The property advertisement screening criteria and steering should not discriminate based on origin, color, race, disability, family status, sex, or religion.
The tenant screening criteria should be written and uniform. Decisions should be documented in case any discrimination claims arise.
Draft a Texas-Compliant Lease
The landlord-tenant lease you draft should comply with the Texas Codes. Pay particular attention to clauses involving late fees, security deposits, floodplain notices, repair, and notice protocols.
The Texas Property Code 92.019 regulates late fees, and landlords can assess late fees at least two full days after the due date. For structures with more than 4 units, the late fees should be less than or equal to 10%, while properties with four units or fewer can charge less than or equal to 12%.
Clauses involving security deposits should comply with the requirement that residential security deposits should be returned within 30 days after a move-out. All deductions will have documentation showing itemized lists and receipts. Floodplain notice should be included in the lease. Repair and notice protocols should also align with the Texas Property Code to minimize disputes.
Move-in Procedures
The day your tenant moves in, deliver legal possession and ascertain that smoke alarms and security devices are functional.
In addition, confirm rekeying of the property within seven days after tenant turnover. If the home has attached garages or gas appliances, ensure it complies with best practices concerning carbon monoxide alarms.
Perform a video walk-through session and document the property’s condition at move-in. Have your tenant sign the move-in condition form. Doing this is essential because it will be needed during the security deposit deduction.
Repairs
Texas allows seven days as a reasonable timeframe between when a tenant reports health- or safety-related issues and when the landlord commences repairs.
If tenants want to “repair-and-deduct”, then it should be in line with the statutory notice steps, and such tenants should be up to date with rent. As a landlord, it is essential to keep track of all your notices, work orders, and completion dates.
Taxes, Insurances, and Local Administration
It is crucial to have a landlord (dwelling) policy and liability coverage for your rental property.
Additionally, some policies require that your tenants also have renters’ insurance. It is necessary to include this clause in your lease agreement (if there are waivers and limits, state them clearly). Property taxes and a homestead are things you should also plan for.
Check the Houston Permitting Center for supplementary requirements and ensure that you register with the Administration and Regulatory Affairs.
Hire a Property Management Company
In Texas, property management activities are treated as real estate brokerage.
As such, it requires that you strictly comply with trust-account rules and licensure. A suitable property management company like Keyrenter Houston will help you in several ways because they have experience in the Texas rental landscape and know how to navigate it without issues.
Partnering with a property management company will ensure you avoid common pitfalls.
Bottom Line
Texas law about real estate is detailed and unforgiving. As a landlord who wants to avoid liability issues, the best way to rent out your property in Texas is to hire a licensed property management company in Houston. This ensures that you protect your asset, stabilize cash flow, and avoid legal risk.
Hiring a property management company like Keyrenter Houston will be the best investment you will make for your rental property business.