OWNERS NEWSLETTER – JANUARY 2007

 WHO GETS MY HOUSE WHEN I DIE? – Being a community property state, many property owners in Texas believe that when they die, their spouse and/or significant other automatically inherits 100% of the house or real property they owned jointly. This is not necessarily true in all cases. For example, if a person dies and is survived by a spouse and one or more children of a previous marriage who are not children of the surviving spouse, the surviving spouse only receives his or her one-half share of the community property, which may include the family home. Unless there is something in writing such as a valid will, one-half ownership of the house will be passed on to the deceased spouse’s children by a prior marriage. Conflicts and disputes could easily arise if animosity exists between the surviving spouse and the deceased spouse’s children by a prior marriage (now the co-owners of the property). To ensure that your estate passes to those to whom you intended, it is wise to have a valid will drafted by an attorney. It is equally wise to revisit and update your will if you haven’t done so recently.  

3,500 TROOPS COMING TO FT. HOOD – In April 2007, the 3rd Brigade Combat Team, 1st Infantry Division, will stand up at Fort Hood. The brigade was originally scheduled to form at Ft. Knox, KY, but since that base presently lacks the infrastructure to support these troops, they are instead coming to Texas. It is unlikely that the forming of this unit, which currently exists in name alone, will have much of an impact on the local housing market. In all probability, the unit will be filled by re-flagging units already here, permanent change of station moves, and by soldiers fresh out of basic training. Additionally, these soldiers will only be here to train for future deployment, and will eventually move to Ft. Knox in 2009. 

MEET CRAIG WATKINS – Craig is our new maintenance manager and took over operations from David Mendenhall, who has retired after fourteen years with us. Craig is a hard working and conscientious individual and is committed to providing you with the best possible service with regard to the maintenance of your property. His preference to calling property owners verses e-mailing is a reflection of the personal and close communication he intends to provide. Craig can be reached at 254-634-4105. Our maintenance e-mail address remains the same at hrmaint@aol.com.  

IMPORTANT 1099 INFORMATION – Please verify your name and social security number as being correct on your 1099 form. Incorrect information reported to the IRS will result in backup withholding being taken from your rental proceeds. If your rental income for 2006 was less than $600.00, you will not receive a 1099 form. 

MORTGAGE COMPANY DATA – At some point between December and March, your mortgage company will furnish you with a copy of your escrow accounting showing your expenditures for taxes, insurance, and interest for the year 2006. This information is provided for your tax filing. When filing your taxes, you should also include any personal expenditures you had such as costs associated with travel to visit your property.   

ADMIN FEE – Please note that there has been an annual admin fee charged to your account this month for each unit managed. This fee helps cover our increased administrative costs in January for 1099 tax forms, purchasing software to print the 1099s, extra paperwork, postage, and handling associated with the year-end accounting. The fee is $30.00 for the first unit managed, and $5.00 for each additional unit.

ACCOUNT STATEMENTS – Included in this envelope, you will find the following items: 

  1. January Statement. Your January statement has been printed on white paper this month and shows income and expenditures for January 2007 only.
  2. December 8th – 31st Statement. This statement has been printed on purple paper and will only be included if you incurred an expense or had income between December 8th through December 31st.
  3. Year-End Statement. Your year-end statement has been printed on yellow paper with your total income and total expenses shown. The first block of this statement is a summary of total income and expenditures you had in 2006. The second block is an itemized summary of all your transactions in 2006. Multi-family property owners and multiple property owners-the second block has the transactions for each individual unit summarized.
  4. 1099 form. This form has been attached to the last page of your year-end statement (yellow statement). It will show income only. Please contact us if there is an error.
  5. For your most recent account balance, refer to the January ledger (white statement).

DECEMBER TRAFFIC – We had the better part of two weeks to rent as many properties as possible last month and we succeeded in leasing close to fifty properties. We ended 2006 with an overall occupancy rate of 90%. During the same period one-year ago, we rented only thirty-seven properties and had an occupancy rate of 86%. It was at that time that soldiers from the 4th Infantry Division were heading out for deployment. These same troops have been returning over the past sixty days.  

RENTAL MARKET OUTLOOK – The rental market will likely see steady traffic this month as the last of the 4th Infantry Division returns. Additionally, we expect to see the normal rotation of soldiers and their families making their permanent change of station to Ft. Hood this month. Beyond that, it is unlikely that we’ll see any improvement while the 1st Cavalry Division is deployed to Iraq. Multi-family properties and the larger, more expensive rentals will continue to be difficult to rent. As always, we will work hard to keep your properties rented and maintained. 

David Gerke

CO-Owner/Broker