Terra Residential Services
November 2011

14655 Northwest Freeway
Suite 124
Houston, Texas 77040

(713) 895- 9966
(800) 275-7776



Houston's Only
Certified Residential
Management Company.
Specializing in Investment Brokerage & Management
Since 1990.

Serving You

Michael Mengden

(713) 895-9966 x305

Bridget Mengden
(713) 895-9966 x304

James Dominy
Property Manager
(713) 895-9966 x308

Jennifer Steward
Property Manager
(713) 895-9966 x306

Carolyn Marsh
Assistant Property Manager
(713) 895-9966 x303

Our Services
  • Leasing
  • Make Readies
  • Rent Collection
  • Evictions
  • Electronic Statements
  • Online Payments
  • Property Acquisitions
  • Sales
  • And More


Check Your Insurance: Events can happen - flood, extreme heat, hurricanes, fire, and more! It is important to check your insurance to obtain the best coverage possible and ensure that it is current. Review now with your insurance agent before a disaster/emergency occurs.

If An Emergency Occurs: Our first priority during any emergency is to handle the situation, taking any necessary measures for the safety of your property and your tenants. Then, we will contact you as soon as we are able.

Our Associations

A Cash Reserve for Your Investment Property

You never know when something can happen that will require a large amount of cash, such as a disaster where the property is located, a major maintenance expense, an unexpectedly long vacancy, or a problem with a tenant that leads to legal action and damage. As your property management company, we work on preventative measures to keep this to a minimum but we cannot control Mother Nature, unexpected maintenance on a property, or anticipate the future actions of tenants. Therefore, it is important as an investor to create and maintain a cash reserve. Many factors impact rental property financially.

Emergencies and Disasters
No one can anticipate the unknown and often, it can depend on where your property is located, i.e. fire, flood, tornado, hurricane, etc. The first thing that can offset and help your money reserves is to have a good landlord policy that addresses fire and disaster issues. Even then, it probably will not cover everything.

Major Replacement
Major maintenance often depends on the current condition and the age of the property. You may have bought an older well-maintained property or one that you purchased to fix up. Consider the condition of the property, the age of the roof, gutters, fencing, appliances, paint inside and out, flooring, and more. Then, make a chart and prepare a plan of future replacement costs. Just remember that major maintenance can occur on any property, new or old.

There is no doubt a vacancy requires a cash reserve. To think the property is never going to be vacant is unrealistic. Even the best properties can become empty. It is less costly to keep the property vacant until we find the right tenant. It is important to keep an eye on the market where you own rental property and know when it is a difficult market. Location and condition of your property can make a big difference. If your property is in a less desirable area or is not in the best condition, it is a good move to plan a bigger reserve.

Eviction generally leads to vacancy and damage. Proper tenant screening is another way to reduce the need for reserves. However, it is impossible to know when a tenant is going to have personal problems and become a problem even when they have been good tenants. Again, a realistic attitude that it can happen is important and to investigate what legal costs can be.

The question now is to address how much to keep for the unexpected. Sit down and review your property for all the factors in this article and possibly others not covered here. Generally, the recommendation is that you keep at least 3-4 months in reserve for a vacancy or major repair. At $1200 a month, this would mean $3600-4800. Then, if you have a problem occur, you already have funds available. Add to your fund monthly or as often as possible.

If you are unable to keep a healthy reserve, investigate and develop a backup plan of where you could obtain emergency funds. If you need help in planning, call us and we are happy to assist you. Plan now to protect your investment.



Terra Residential and CNR
partner to improve
Cash Flow!

CNR Insurance Brokerage Services - 8% Insurance Rate Discount for TERRA RESIDENTIAL CUSTOMERS
- Up to $500,000 Personal Liability Protection PER PROPERTY
- Lower Rates for Real Estate Investors
- Broad Coverage Form
- Current CNR Customers can call for these greater discounts
- This product is for Texas, Oklahoma, and Arizona

Example Quote: $120,000 Home, Built in 2006

972.248.2415 | Toll Free 800.539.1744 | Fax 972.248.4294

info@cnrbrokerage.com | www.cnrbrokerage.com

The material provided in this newsletter is for informational and educational purposes only. It is NOT legal advice.
Although we believe this material is accurate, we cannot guarantee that it is 100% without errors.


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