Buying a Rental Property in Fort Worth
The short answer: a rental property is a small business that happens to be a house. It can work well, but the buyers who do well tend to plan for taxes, repairs, vacancy and the legal side of being a landlord before they make an offer. This page covers what to check when you are buying a single-family or similar rental in Fort Worth.
This is general information, not investment, tax or legal advice. Talk to your lender, accountant and an attorney, and run your own numbers on every property.
Start with the numbers, not the house
Before you fall for a property, work out what it would cost you each month and what it could realistically earn. Use conservative assumptions and check them against real records.
Rent. Base your estimate on comparable rentals, not on a listing's hopeful number.
Property taxes. Get the actual tax figure for the property. The Fort Worth investment guide summarizes the Comptroller's rules on appraisal caps for non-homestead property.
Insurance. Get a quote for a landlord policy on the specific property.
Vacancy and turnover. Plan for months with no rent and the cost of getting a unit ready again.
Repairs and capital expenses. Roofs, HVAC, plumbing and foundation work are the big ones.
Property management. Price it in even if you plan to manage the property yourself, so you know what your time is worth.
Financing. Investment property loans can have different requirements from owner-occupant loans, so talk to a lender early.
My take: the mistake I would most want you to avoid is using a best-case rent and a zero-repair budget. A property that only works on a perfect spreadsheet does not work.
Choosing the property and the area
Look at the condition of the home and the demand for rentals in the area. Older homes may need more repairs, and newer homes may have HOA rules that limit or restrict leasing, so read the HOA documents before you buy. Compare a few areas such as Near Southside, north Fort Worth, Benbrook and Burleson, and remember that each suburb has its own city rules.
Fort Worth rules to know
Rental registration. According to the City of Fort Worth, registration is voluntary for one- and two-family rentals with no violations and mandatory for those with fire safety or public health violations. Out-of-state owners must designate a local agent to accept legal service and provide an emergency contact.
Short-term rentals. The city has a separate ordinance that requires registration before operating or advertising a rental of 29 consecutive days or less, and requires operators to collect and remit hotel occupancy taxes. Confirm the current rules before you buy for short-term use.
Permits. The city lists remodels, additions and accessory structures among the residential work that requires permits.
Texas landlord-tenant basics
The Texas Attorney General says tenants have a right to demand repair of any condition that materially affects physical health or safety, and that retaliation for a good-faith repair complaint is illegal for six months. Landlords must return a security deposit within 30 days, minus deductions for actual damage, with an itemized list of deductions, and cannot charge for normal wear and tear. Write your lease carefully, put changes in writing and get advice from an attorney or an experienced property manager.
Before you make an offer
Get an inspection and read it as a landlord would, with an eye toward what you will repair over the next five years.
Ask for the current lease, the rent history and the tenant's deposit if the property is occupied.
Confirm zoning, HOA rules and any registration requirements.
Have a plan for how you will manage the property and who will respond when something breaks.
Rental property FAQ
Do I have to register a rental in Fort Worth?
The city says registration is voluntary for one- and two-family rentals with no violations and mandatory if there are fire safety or public health violations. Confirm with the city for your property.
How long do I have to return a security deposit in Texas?
According to the Texas Attorney General and the Texas State Law Library, landlords must return the deposit within 30 days, minus deductions for actual damage, with an itemized list of deductions.
Can I rent my Fort Worth property on a short-term basis?
Fort Worth has a short-term rental ordinance that requires registration and hotel occupancy tax collection. Check the current rules and the zoning for the specific property.
Should I hire a property manager?
It depends on your time, your distance from the property and how you value your time. Price it in either way so you can see the true return.
Thinking about buying a rental?
If you are looking at a rental property, tell me what you are trying to do and we can talk through the numbers and the areas. The investment property search page covers how to start looking.
Sources: City of Fort Worth rental registration, City of Fort Worth short-term rental ordinance, City of Fort Worth residential permits, Texas Attorney General on renters' rights, Texas State Law Library. This is general information, not investment, tax or legal advice.