What is successful Property Management?
Management is Everything. How you manage your rental property will determine your cash flow and whether you make money or not. Below are some tips and tools we recommend. You CAN be successful as a landlord, just make sure you do it right!
All of the management tasks below can be handled with a simple online software that we recommend. It is called Buildium. You will save so much time and money with this software. They offer a Free Trial to make sure its for you. Check it out:
Advertising Your Property
How will you list your property? The old way is putting a sign in the yard. This can work, but it only reaches a small number of applicants. For you the get the best tenant, you need a wide reach. The internet is where you need to be. Before you list it online, gather the following: 1. Some Good Pictures of the Property, 2. A Nice Description of the Property, 3. Some Basic Information about the Property (schools, number of bedrooms, etc.). There are many websites available to list your property. Rather than posting on a bunch of different websites, try to post on a network that will publish the listing to many other sites. This is something that Buildium can do for you.
Handling Lease Applications
Gathering and Reviewing Rental Applications can be a pain. The traditional way is obviously having tenants fill out a paper form and fax/email it to you. We recommend something more digital if possible. One way is to email them a form that can be filled out and sent back easily. Docusign is a good service for this. In fact, DocuSign is a great product for any landlord managing their own properties. If you are signed up with Buildium, your applicant can apply on your site as they are standing there looking at the property. You can also email them an easy link or do a paper application if they are computer challenged. We recommend charging an application fee. An application fee prevents bad applicants from applying. If you receive applications digitally through Buildium, you can charge an application fee seamlessly with the application.
Getting the right Tenant – Tenant Screenings
How do you screen tenants? It can be tricky. It took this writer a long time to learn this skill. The hardest part is saying “no” to bad applicants. Trust me, it’s MUCH easier to say “no” to a bad applicant than to evict them 3 months later! We recommend a credit check, criminal background check, proof of income, and prior rental history. When doing your due diligence on an applicant, keep in mind that nobody is perfect. Proof of income and prior rental history are very important because those indicate if they will pay the rent, and that’s our goal. Regarding credit, if they had perfect credit, maybe they would not be renting. The serious red flags on a credit report are indications that the applicant cannot pay their day-to-day expenses, such as old utility bills, broken apartment leases, and multiple car repos. Regarding criminal history, remember that people make mistakes and change. Look at how old the offense is, and what kind of offense it was. Was it a violent crime or something less? Was it many years ago or last month? After looking at all available information, make your decision. And again, don’t ever be afraid to say “no” to the wrong applicant.
Handling Maintenance Requests Timely
To keep your tenants happy and paying rent on time, you need to do your part. And part of that is fixing things that break, and doing it quickly. If you are using Buildium, your tenant can simply submit a request through the “resident portal.” Their request can even include pictures and videos of the problem. Then you can decide what course of action to take. Is it something you will handle yourself, or will you send out a repair guy? The key to being successful here is staying in communication with your tenant so they know that you are working on the problem.
Collecting Rent Easily and On Time
The old way to collect rent is with a check or even worse, cash. The best way to collect rent is to get your tenants set up on a “resident portal.” The resident portal is where they can enter their account number and routing number, and submit a payment to you electronically. This is also called an ACH or EFT. It is very nice for the landlord. Buildium has the resident portal and online payment feature built in to their service. Regardless of how you collect rent, you must be strict about collecting it on time. If you let the tenant get behind, it will only get worse and worse. Tell them up front when they sign the lease that you are very strict about on time rent, and that you deliver an eviction notice once it is past due. Tell them it is nothing personal, it’s just business. They will get the message. It’s easier to be strict up front, than to be enforcing it later.
Storing and Accessing Important Documents
How do you keep all your documents together? One way is throw papers into a paper file. But that is obviously not the best way. Your papers (leases, letters, applications) should be scanned and stored digitally. There are a number of affordable scanners on the market these days. You plug them into your computer and scan away. Then you have everything in one place. If you are using Buildium, they have cloud storage for all your documents. It is very nice- you log in and can access everything in one place.
Accounting and Reports for Taxes
There is nothing worse than having a mess of bank statements, invoices, etc. at the end of the year. To make money as a landlord and to get all the tax benefits, you have got to be organized. This means using some kind of accounting software such as Quickbooks or something built into your software. Every transaction should be entered into your accounting software so at the end of the year your account or CPA can easily prepare your taxes. Buildium offers built in accounting software, as well as ability to run reports. Generating reports is vital so you can understand your business and decide where to make changes.
Tools Plus Experience Equals Success
With the right tools, plus some experience with the tasks above, you will become a successful and wealthy landlord.