the ultimate guide to automate your rental management

THE ULTIMATE GUIDE TO
AUTOMATE YOUR
RENTAL MANAGEMENT
HOW TO MAKE MORE MONEY AND SPEND LESS TIME ON YOUR RENTAL PROPERTIES
THE ULTIMATE GUIDE TO AUTOMATE YOUR RENTAL MANAGEMENT
HOW TO MAKE MORE MONEY AND SPEND LESS TIME ON YOUR RENTAL PROPERTIES
Through our conversations and interactions with our customers one
thing is clear - landlords and real estate investors want to figure out
how to make their real estate management more hands-off and
make more money doing it.
Let’s be real for a minute. The profit margins for buy-and-hold real
estate are not always great so it’s important to maximize your
monthly income potential and get your involvement down to a
minimum. You could always hire a property management company,
but that will cost you anywhere from 7% - 12% of your gross monthly
income plus a full month’s rent to fill a vacancy. Why pay someone
else when you can do this on your own with these 7 best practices
and keep all of those profits to yourself?
Management Fees
12%
Advertising Costs
Months of Rent
Property management fees
range from 7% - 12% of your
monthly rents. There are
additional costs for up to
one month rent when filling
a vacancy.
1
0
11
3
6
9
12
88%
PM Costs
Rent Income
i
Here are three reasons why limiting your time on property
management is advantageous, not only to you, but your business as
well.
1. Increase usable time.
By putting your properties on autopilot you have more free time to
find more real estate deals and work on the big things that will
bring in more money. This is how you will find time to work ON
your business and not IN your business.
2. Easier rental management.
Implementing systems means your rental management will
become more matter of fact. Stop stressing over the little details
that can distract you from making money in real estate.
3. It’s just good business.
Putting systems in place helps your tenants, vendors, and finally
you know what to expect and how to handle management
situations when they arise.
SAVING TIME
Putting your rentals on autopilot is not just about saving money; it’s
about saving your time too. There are only 24-hours in each day so
you need to figure out how to make the most of these precious
hours. Often, landlords will start their investment business while
working other jobs. Sometimes families are a priority. And other
times, well, you just might not want to spend all of your time working.
Decreasing the amount of time you spend collecting rent checks,
running around fixing minor maintenance issues, and showing
apartments gives you more time to network with other real estate
investors or evaluate additional rental properties. It’s important that
you not be penny wise and pound foolish when running your
business and learn how to value your time. After all, time is your
most valuable resource.
EASIER MANAGEMENT
Systems equal less time and energy wasted making small decisions
over and over. It’s the same idea behind why some people
implement a dress code and wear the same outfit day in and day
out (like Steve Jobs famously did) or eat the same breakfast every
morning. One less thing to clutter their minds. You can use the same
thinking when it comes to your rental business.
Implementing systems for qualifying tenants, turning vacant units,
and collecting the rent gives you a structure to follow time and time
again so that you are not bogged down by repetitive tasks and
running down your energy on things that can be handled
automatically.
GOOD BUSINESS PRACTICES
Finally, putting systems in place will elevate your rental business.
Adopting best practices and procedures raises your thinking about
your own business and gives you more confidence. You know how
to react to situations as they arise and will be seen as a professional.
This will go a long way with tenants who may be used to pushing the
limits with previous landlords.
ii
And it’s not just tenants who appreciate professionals, your vendors
look forward to working with landlords who have their business in
order. No more hemming and hawing. Business decisions become
more matter of fact and easier to make when you know your rental
business is running full speed ahead.
Most business owners dream of having a business that can run
without them so they have time for vacations and hobbies. The
trouble is most businesses never get there and the owner becomes
burnt out. But, not you. Just by reading this eBook, you are elevating
yourself to the next level. Businesses that can run themselves are
successful businesses. They are the businesses that people want to
buy. So, use these 7 keys to rental management to get your
business running automatically and soaring to new heights.
WHERE TO START:
The following strategies are broken down into categories and are
laid out via the property management cycle. We’ll start with finding
good real estate from the beginning and work our way through
managing your rental property investments through maintenance
and tenant turnover.
iii
1
PROPERTY
EVALUATION
Becoming a real estate investor starts with finding the
right property. This chapter will help you look at what
goes into finding a good buy-and-hold rental property
and how much you should spend as a percentage to
make sure you can have positive cash flow each
month.
Having a system in place for evaluating properties will save you
countless hours, not to mention improve your investment strategy.
If you are just starting out, talk to local real estate investors that
you admire. Offer to buy coffee or lunch and pick their brain
about how they got started, what they think of the local real estate
market, and what they wish they had known when they started.
You could also see about “interning” with them in order to learn
the ropes and provide them some support.
Most newbies are scared to ask for advice from successful
business owners. But, surprisingly, those that are the most
successful are the people that are usually the first to say yes and
help. Just make sure you are holding up your end of the bargain.
Be a positive person and let your genuine curiosity show through.
Find out how you can help them and then follow through.
When you are starting to evaluate buy and hold properties, you
need to establish your investing rules of thumb or “rules” for
short. Some common rules include the 70% purchase price rule,
the 2% rent price rule, and the 50% expense rule. It should be
noted that these thresholds are very difficult to achieve, but the
closer your numbers can get to these thresholds, the better your
cash flow will be.
5
The 70% purchase price rule:
70%
This rule means you should strive to buy a
rental property for 70% of the market value
after repairs and updates. For example, if the
market value of a rental property is $100,000
and you anticipate $8,000 in repairs before
you rent it, you should try to pay as close to $64,400 for it as
possible. [($100,000 - $8,000) * .7 = $64,400] This is usual more
important if you intend to flip the house, but the closer you can get
the better.
The 2% rent price rule:
This rule means that you should strive for
monthly rent prices close to 2% of the
purchase price of the property. For
example, if the purchase price is $64,400
the monthly rent would be $1,288 using this
rule. There is debate whether this rule is
attainable and often it boils down to the
type of properties you invest in. Nicer properties (Class A) will more
likely have rents closer to 1% of the purchase price where median
properties (Class B/C) will get closer to 2%. This is because of two
factors. First, the class A properties are more expensive to
purchase, making 2% harder to achieve. Second, you will be taking
on more risk with the class B/C properties so you need to be
rewarded with higher rent percentages.
2%
The 50% expense rule:
50%
This rule pertains to your operating expenses.
Savvy investors anticipate expenses to be
50% of the rent price not including a
mortgage payment. The expenses include
taxes, insurance, vacancy, maintenance,
utilities, management costs, turnover, and capital expenditure
reserves. So any funds left over after withholding 50% of the rent
and the mortgage are roughly your cash flow each month. If after
doing the math on the expenses and your numbers are negative, it’s
not a good investment.
Property Evaluation Tools:
Tools to assist with your property evaluations can be very helpful
too. One tool you should keep in your arsenal is a property
evaluation tool. Something that can quickly help you run the
numbers before you get too committed or even view the property
can be helpful. A mobile app like the one found at PropertyEvaluator
is free for one property and has paid options as you grow your
business.
But, knowing the numbers on a potential investment property is not
enough. For a good look at how well a property will perform, you
need to look at the neighborhood and demographics too. This is
where a tool like Movoto comes in. This will also help you see the
quality of the schools for a particular property. The quality of public
schools is of big concern to families so you need to factor that in as
well. Homes in a good public school district and quality
neighborhood will command higher rents and be susceptible to
6
lower tenant turnover. Movoto should list the school ratings, but if it
does not you can check GreatSchools too.
The county assessor’s website and office in your area can be a gold
mine. Not only can you find out the overall price history for a specific
property, but the overall neighborhood too. Take a look at the price
history from the last 20 - 30 years. You will do better in a real estate
market that shows a gradual increase over time versus a market that
has multiple highs and lows. None of us can predict the future and if
you need to liquidate your assets at any time, it would be
devastating to find yourself at the bottom of the market.
Another way to keep a pulse on the market is to keep up with your
local news and get familiar with your city, county and state economic
development activities. This will keep you updated on companies
moving to the area and the overall strength of the job market. Of
course, all markets can experience ups and downs so diversified
job opportunities will increase the longevity of your market.
Finally, make sure you evaluate the street and neighborhood of the
property you are considering. Are there several other homes for rent
or for sale? Do the neighbors show pride for their properties by
keeping up the lawn and outside appearance of the homes? You
want to buy property in a quality neighborhood without a lot of
turnover or other rentals. More rentals equal more competition which
can keep rental prices lower.
Pro Tips:
#1: As a new investor, you should start investing in your local
market. You know the good parts of town and those that are more
risky. You’ll have more connections in your area and be able to be
hands-on if you need when you start out. Time and time again we
see investors that get swayed by what seem like “too good to be
true” prices in different markets. There is usually a reason behind
the low price so buyer beware.
#2: Join your local real estate investors or landlord association.
Associations provide a wealth of knowledge. They can help you
understand the market in your area best so you’ll know what kind of
deals you can expect. Association membership can help you with
everything from negotiating price on a new property and estimating
rents to generating standard forms and leases, and learning your
local laws. An association is also a great place to find a mentor and
potential deals.
7
2
ADVERTISING
Vacant rental houses do not generate income so it’s
important to fill any upcoming vacancy as soon as
possible. This chapter looks at how to spread the word
about your rental houses quickly and efficiently in order
to minimize your vacancy rate and beef up your bottom
line.
Once you’ve found a property, you’ll need to find a tenant to rent
it. Even if your new investment has a tenant currently renting the
space, they will eventually move out and you will need to
advertise. Here are the tried and true ways savvy landlords
advertise their properties along with some automation tips.
Signage:
There is a debate over whether you want to advertise your
property with a sign in the yard. Sometimes people are
concerned the exposure will lead to vandalism. Other times,
landlords are concerned the neighbors will not like having renters
live next to them.
We’ve found that putting a sign in the yard is a great way to let
the neighbors help you find a good tenant. They will often be first
to want to share the information with friends who need a place to
live as they want good neighbors almost as badly as you want
good tenants.
Just be sure to use quality, professional signage with enough
information. This includes basic statistics about the property,
monthly price, a phone number and possibly a website. In order
to automate your efforts, the phone number should go to a
voicemail recording that gives more information about the
property and the date for an upcoming open house. Encourage
prospects to leave their contact information so you can return
calls at your convenience.
9
Online Listing Sites:
Social Media:
Zillow Rental Manager purchased Postlets a few years ago and it’s a
good way to get more exposure for your rental property. By posting
once, your advertisement will be syndicated to several other sites
without any additional work by you.
Craigslist has been the dominating online rental ads for the past
decade, but they have made posting more difficult over the years.
While you cannot auto-post your ad on Craigslist, you can get the
information from your Zillow posting and manually copy it in for a
pretty quick posting strategy. This will save you time from having to
rewrite descriptions and other rental information multiple times.
It’s no secret that social media has taken over many parts of our
lives. For some it’s an addiction and you can use this to your
advantage when marketing your rental properties. If you have
established a business for your rental management activity, you
should set up a business page and share all of the information
posted there through your personal profiles. If you do not have or
want a business social presence, you still should post your rentals to
your personal profiles. This lets people know you have a property
available for rent so they can start working to help you fill the
vacancy.
10
Word of Mouth:
A direct word of mouth referral can be an excellent form of traffic.
Whenever you have a vacancy coming available be sure to tell your
other tenants, family, friends and anyone else you come into contact
with. Having business cards or flyers on hand is recommended so
that people can contact you for more information. You can offer a
referral fee to incentivize more referrals to your properties as well.
Just be sure to spread the word to people you would like to be
renting from you. As the saying goes,”birds of a feather flock
together” and you want your property filled with responsible tenants.
Pro Tips:
#1: Pre-screening begins with your rental advertisements. In order to
save your time, include your qualifying standards in your
advertisements. Set up a standard paragraph that you include with all
of your listings showing your rules. For example: monthly income
must be at least 3x rent amount, no pets, no smoking, no prior
evictions, credit score must be above (your threshold). If you are in a
college town, you can list if co-signers or guarantors are allowed.
#2: Use great photos. Lighting and cleanliness are important. Take
photos of your entire property starting with the exterior. Your goal is to
give a prospective renter a guided tour of your rental through the
photos. Be cognizant of how you order your photos. It’s best to place
your photos in order of how you would walk through the house. You
want prospects to feel as if they’ve been there. Make sure the rooms
are vacant and clean. (Bonus: you can use these photos to document
the move-in condition of the house as well). Remember, the old
adage, “a picture is worth a thousand words.” These are the first
impression renters will have and better images will attract a better
renter.
#3: Post your rental ad at least one month before your property will
be vacant. Good tenants plan ahead. It does not matter if your
property is still occupied. The better tenants understand this as they
have probably given notice of their move-out to their landlord already.
#4: March and April are the best months to rent your properties to
good quality tenants. This is the time when tax refunds are coming in
and parents are looking at schools for the next year. The worst
months are November and December when the holidays make
renting difficult. Try to end your leases in March or April and never in
November and December in order to rent your properties quickly and
to better tenants.
11
3
TENANT
SCREENING & PRESCREENING
Your tenants can either make your life easier or create
big problems for you. It all starts with good tenant
screening. Use the tips in this chapter to find good
tenants to fill your vacancies and cut down on how
much time you spend searching for your next along the
way.
As mentioned in the previous chapter, tenant screening begins
with your advertisements. Of course you screen your tenants
because you want to find someone who will treat your property
with respect and keep it in good condition, but you can use prescreening efforts to make sure you are not wasting your time
while finding these good tenants. The following automation tips
will give you more control throughout the process and increase
your confidence on finding the right tenants.
Pre-screening:
We mentioned including your qualifying standards in your
advertisements. This is so you can avoid the tenants that are
looking for a landlord who's an easy target. Having qualifying
standards in place shows tenants that you are a professional who
is fair and knows how to run their business. More often than not,
bad tenants will see your qualifying standards and stop the
process right there because they know they will not pass your
screening standards and they do not want to waste the
application fee.
Setting up a pre-screening process:
1.
List qualifying standards in your advertisements, on your
rental website, and social media profiles.
2.
Set up an automated voicemail message for when
interested parties call your advertisement. Google voice is a
great service that will allow you to set up a new phone
number and voicemail message. This keeps your prospects
separate from your current tenants and makes managing
the process easier for you.
13
3.
Set up an automated email responder. This can be done pretty
easily with Gmail. You can set up a new email address for each
property or one general email for all rental inquiries.
4.
Set up an online calendar for property showings. The calendar
can be used to automatically list times for available showings of
your properties on your website and in email correspondence
with your prospects. The added bonus of the calendar is that it
helps generate demand as prospective tenants see they might
be competing for a rental. Some good calendar services
include MixMax, Calendly, and You Can Schedule Me.
Tenants that have to do some work to come see your property are
going to be the tenants that actually show up for the showings. Part
of the balance is adding this layer of work, but not making it too
difficult as you are still competing with other landlords to get your
properties rented.
Once you’ve set up your system what should you include on your
voicemail or website to make sure you are only seeing quality
tenants and not wasting your time with unqualified tenants and noshows?
Your voicemail message should describe the property for rent and
list the date it will be available along with the monthly rent and
security deposit. The message should conclude with a property
website where prospects can find out more information, see photos
and schedule a viewing. If you plan to only have one general
voicemail for several vacant properties, you will want to refer people
to the website for more details. Don’t forget to make sure this
website is listed on your signage as well.
With today’s tenants doing everything on their mobile devices, it’s
important your website be responsive. This means that it works well,
regardless of the device - computer, tablet, or mobile phone.
Websites can be set up on platforms like WordPress, Wix, Weebley,
or SquareSpace and you do not need to know about computer
programing to have a nice functioning website these days.
Things to include on your website are:
• Property listings with photos and descriptions
• A list of your qualifying standards
• Scheduling calendar for apartment tours - Can be a request to
email for a date and time
• Optional pre-screening questionnaire
The online scheduling works as follows; you will set up time in a
linked Google Calendar which will connect your available time to the
scheduling app. You can set the length of each appointment time
and then prospects can select a time that works for them.
Scheduling in 15 minute windows might mean that some
appointments will overlap, but that can lead to competition and
increased demand. Once an appointment has been scheduled,
prospects are sent a confirmation email and text. They are reminded
again 2 hours before the showing which decreases no shows.
14
SHOWING THE RENTAL & LEASE SIGNING
An easy way to save time when showing your rental properties
is to hold an open house. In all of your correspondence with
prospective tenants, you can list the date and time of the
showing. This makes it easier for you because you do not have
to worry about no-shows and you will not waste time going
back and forth to the property multiple times. Open house
showings are also great because they create more competition
for the rental and thus increase demand. The downside of an
open house is that the time frame may not fit for all prospects
and the good renters may find an alternative rental before the
date of your showing.
After you complete the screening process and find a renter, you
need to have the lease signed. For lease signings and all other
documents requiring a signature, Docusign and HelloSign offer
great functionality. You can set up your lease as a template with
all the applicable documents (like rules and regulations,
addendums for maintenance of the unit, pets, etc.) and send it
to the tenant. Documents can be signed by multiple tenants and
copies are sent to all parties when finalized. This electronic
copy can be saved to your computer and eliminates the paper
mess.
Tenant Screening:
Once you have a qualified pre-screened prospect, you need to
complete the tenant screening process. If you have a list of several
interested parties, it’s best to fully screen one applicant at a time
before moving on to the next. This will save you from running
unnecessary screening requests and wasting the prospect’s
application fee.
Online tenant screening tools usually mean a credit check,
background check, and eviction report. Services like TransUnion’s
SmartMove provide these reports quickly and easily. Simply enter
your property information and your tenant’s email. Your tenant will be
sent an email request to complete the application and have the
reports sent to you. The results show you a full credit report including FICO score, credit
lines and payment history, nationwide criminal records and
nationwide eviction reports.
One caveat with tenant screening is that the reports are only as
good as what was reported by the local courts. Speed can also be a
factor as criminal and eviction records can take some time to update
on the local and state level. That’s why it’s important you also
complete another step of due diligence.
15
Due Diligence:
The final step for most landlords is verifying the information on the
tenant’s application. That means that they call the last landlord on
record to confirm the tenant was not evicted and to see if they would
rent to this tenant again. Smart landlords also verify employment by
getting copies of the last 2 pay stubs and calling the employer of
record. There are services that can complete the screening and due
diligence step for you such as Investigative Screening and
Consulting, but for new landlords it’s recommended you get
comfortable with this verification step and know the tenants renting
your properties.
Pro Tip:
#1: The most important tip for screening tenants is to use written
qualifying standards. These need to be used each and every time
you have a prospective tenant apply for your properties. Not only
will having the written standards increase your quality tenants, they
will help keep you out of trouble when it comes to fair housing and
discrimination issues as you will be using the same standards for all
applicants. But, the best part is that they will save you considerable
time. If a tenant does not meet your qualifying standards you will
quickly move on to the next. No need to second guess or give it another thought.
#2: Take your time to find a quality tenant. Rushing to fill a vacancy
might seem like the right thing to do since you lose money everyday
your property is vacant. However, that vacancy loss is better than
having to evict the wrong tenant. In the case of eviction, you’ll still
be without the rent, but someone will be in your property, and there
will be the possibility of damage to your asset. A little more vacancy
loss is worth it.
16
4
RENT PAYMENTS IN
& EXPENSES OUT
Stop chasing rent checks each month and discover
how to create a rent payment flow that works for your
business. This chapter will show you how to
automatically collect rent and pay expenses so you
can get on with building more wealth instead of
worrying about who still owes you money (hint: not
many since your rent payment software will be tracking
it down for you).
One of the easiest ways to automate your rental management
activities is to take a look at your rent payments in and your
expense payments out. These are the activities you spend time
on month-in and month-out, so of course you can save time and
headaches by getting them automated. The good news is that
these are some of the easiest areas to automate because
systems have been implemented in recent years to help do just
that.
Rent Payments In:
Allowing your tenants to pay online is one of the most recent and
most effective ways landlords are improving their businesses.
Not too long ago, landlords were forced to collect rent in multiple
ways - mailed check, door-to-door, cash - which all have some
downsides. With new technologies, like RentMonitor.com
landlords can now automate the rent collection cycle and get
back to their more important tasks and wealth-building strategies.
Here’s how online rent payments work:
• Landlords create an account and set up the property
information in their chosen software
• Tenants are invited and set up their own accounts
• Email and text reminders are automatically sent to the
tenants when rent is due
• Money is seamlessly transferred from the tenant’s account
to the landlord’s bank account
• If the payment is late, a customizable late fee is
automatically added and the tenant is re-invoiced
18
Money is collected without the landlord having to do a thing each
and every month and the payments are tracked so they are always
up to speed on who has paid and which tenants are late on the rent,
if any. No more chasing tenants or rent checks!
“The idea of having to bang on all my tenants’ doors
“The
idea
of having
to bang
my tenants’
doors
each
each
month
to collect
renton
is all
horrifying.
That’s
why
month
to collect
rent rent
is horrifying.
That’s
rather collect
I'd rather
collect
online. And
inwhy
the I'd
beginning
of
rent
online.
And in
the beginning
each
month
when I the
check
each
month,
when
I check of
my
bank
account,
mybalance
bank account,
balance
almost
always
makes me smile.”
almostthe
always
makes
me
smile.”
Money Out:
Just like with any business, you will have expenses to pay for your
rental properties. A simple way to deal with these is to set up
automatic payments from your bank account for the recurring
expenses like mortgage, taxes, and insurance. Utilities often offer
direct debit programs so you will not miss a payment. Setting up
these expense payments to be automatic makes it easier to handle
the one-off payments that come up occasionally for things like
maintenance.
- Landlord, 10 years experience
- Landlord, 10 years experience
Online rent payment tools also allow landlords to collect for security
deposits and one-off payments if necessary. These payments can
be tracked by tenant and property so year-end accounting is easier
too.
Systems like RentMonitor also create a payment record for the
landlord and tenant. Tenant’s enjoy having this proof of payment that
they can refer to anytime. Landlord’s like knowing exactly when each
payment was made so tenants can no longer use the excuse of, “it’s
in the mail.”
The better rent payment softwares allow landlords to choose if they
want to allow partial payments and enable them to turn off rent
collection if needed. This would be helpful in an eviction situation. If
the landlord has started the eviction process, they may not want to
allow a payment to be made as this would end the eviction or force
the landlord to start over, costing even more time.
Pro Tip:
#1: Look for a software that includes customizable late fees that are
automatically added to any late payments so you are not leaving
money on the table, like RentMonitor.com.
#2: Not all tenants are able to make payments on the exact same
day each month. For these tenants an automatic “pull” payments
system will not work. They need the flexibility to “push” the payment
funds out when they choose.
#3: Choose software that is geared toward rental properties. There
are some inexpensive online payment options that are not focused
on rent payments. These softwares will not include things like
automatic late fees or other rent specific features like tenant
screening, or maintenance requests.
19
5
ACCOUNTING
Numbers, numbers, numbers...they all add up and
your job is to make sure they end up in a positive figure
on the bottom line without spending all your time on
your books or pulling your hair out. Follow along in the
next chapter to see how you can get your accounting
tasks done quickly and (surprisingly) easily.
The dreaded accounting. No one, other than accountants, really
likes this step, but it is extremely important to your business.
Keeping good records will ensure that your taxes are in order at
the end of the year. It will also help you see your revenue coming
in from rent payments and all of the expenses going out to
operate your rental property. This bookkeeping step can confirm
if your estimates for running your business were correct and if
your return on investment is performing as expected.
There are countless ways to record your income and expenses
ranging from the very manual process of writing all your
transactions down in a ledger to a more sophisticated software
product. Of course, the manual process would be time
consuming so it’s great news that the more sophisticated
softwares are reasonably priced and do so much of the work for
you.
Two of the best softwares for online accounting are FreshBooks
and Xero. These two products offer intuitive accounting software
that is robust and not glitchy. They are true cloud-based products
that feel much easier to use than some alternatives. These
products simplify your life even further by automatically importing
your transactions from your business bank accounts
automatically. By doing this, you are able to reconcile your books
in just minutes each month.
Both options can easily be set up for a real estate specific
business and allows tracking of multiple properties with their
tagging features. This lets you drill down on how each property is
performing as well as a group of tags (properties) which is nice if
you want to run reports on a certain portion of your portfolio. Their
support staffs are knowledgable and quick to respond. These
21
softwares also offer tutorials in the form of blog posts and videos
that explain how to setup the software and use it. This makes it
possible for a non-accountant to thrive and possibly even enjoy
accounting (just a little bit).
Other accounting tips:
Another great way to keep your records in order is to use an
expense or receipt tracking software. The biggest players in this
space are Neat Desk, Expensify and Shoeboxed. These softwares
allow you to upload photos of your receipts so you no longer have to
store them for tax time.
Neat Desk is actually hardware, meaning that it is a physical
scanner that you use to scan the physical receipts, but it can also
scan business cards and letter-sized papers. This is a great option if
you need help organizing all of your office papers, but is the most
expensive of the bunch running $179 - $499 for the hardware and
$5.99 - $24.99 per month for the scanning software.
Expensify starts at $5 per month and goes up to $9 per month.
Shoeboxed starts with a free account and goes up to $49.95 per
month depending on number of users and how much functionality
you need. With both of these products there are some integration
options and reporting functionality that will help keep your business
organized.
different entities to help manage your risk and business profits, but
this is a strategy best discussed with your accountant.
Yes, you are still going to need a good accountant, but these tips
will help you save money along the way since your books will be
organized and easier for them to work with.
Pro Tip:
#1: Do not use Quickbooks. Some landlords swear by Quickbooks
and any accountant worth anything knows it very well. However,
ever since the IRS started using Quickbooks, there has been talk
about how secure your information would be should you ever be
audited. Unlike enterprise accounting solutions, Quickbooks does
not have a way to close out your records from year to year. There
may be some workarounds for this, but they are not automatic
settings. So, should you be selected for an audit and you use
Quickbooks, you may be asked for your login information. This
would give the auditor access to all of your business records, not
just the year in question and could lead to a much larger
investigation. For this reason, our accountant has recommended we
Another way some landlords keep their records in order is to have a
separate bank account for each property. This works well when you
are first starting out, but as you grow, you may want to consolidate
the bank accounts and group your properties by street, city, or state
depending on your portfolio. You can set these groups up as
22
6
MAINTENANCE
It’s just a fact of rental management. Something is
going to need to be repaired at some point at one of
your properties. Instead of running from the task, use
t h e s e t i p s t o s t re a m l i n e y o u r m a i n t e n a n c e
management and get things done quickly.
Maintenance issues are the things that keep new landlords up at
night. It’s also the area of property management that keeps
people from becoming a landlord in the first place. That’s too bad
for them because if they would broaden their comfort zone just a
bit, they would learn that there are ways to automate your
property maintenance as well.
Not Doing It All Yourself:
Surprisingly, the maintenance cycle actually starts with good
tenant screening. Choosing good tenants will result in fewer
maintenance requests as these tenants are more likely to take
care of their things, including the rental house they are in.
However, even with good tenants, something is going to need
maintenance on your home eventually. That’s why you need to
have a team in place. You do not want to be “on-call” 24/7 as the
goal here is passive income; not active income.
Talk to other landlords, call around for bids and meet with
contractors that can help you when the situation calls for it. At a
minimum, you want to know a handyman, plumber, electrician,
and HVAC repair technician you like working with. These can be
the same person, but it’s always good to know more than one
person who can help.
24
Systems in Place:
In order to keep your involvement to a minimum, you need to teach
your tenants how to respond in the event they need maintenance
help. There are a couple of ways to do this.
1.
Use a system like RentMonitor.com to receive maintenance
request emails from your tenants. These can then be forwarded
to your maintenance people for action.
2.
Have your tenants email and/or text you when they have a
maintenance issue. You can then forward this message on to
the correct maintenance person.
3.
Instruct the tenants to call the appropriate maintenance person
directly.
4.
Set up a phone number with multiple extensions that will ring
directly to the appropriate maintenance person. Phone systems
like Grasshopper.com and Switch have low cost monthly plans
that can do this.
the tenant. For example, damage to the walls, the wrong things
flushed down the toilet, and broken windows. Have your
maintenance people make it a habit to always document the repair
and send you pictures. This will help you know who is responsible
for the bill and help you keep great records if the tenants ever
dispute the charge.
Pro Tip:
#1: Instruct your maintenance crew to simply bill you for all
maintenance repairs. If it’s a cost associated with normal wear and
tear, you’ll pay it. However, if the tenant should cover the cost you
can pay it and then bill the tenant. If you use an online payment
software, you can add a line item for the maintenance call to next
month’s rent so that it’s paid at the same time.
No matter how you decide to communicate, the best is to not have
tenants call you directly. This just ties up your free time as
maintenance calls are usually not made during business hours.
You’ll just become the middleman and coordinator, which is not the
best use of your time.
Billing:
Repairs resulting from normal wear and tear on your rental units
should be covered by the landlord. However, savvy landlords will
have a clause in their lease passing on the cost of repairs beyond
wear and tear to the tenant. These are issues that were caused by
25
7
TURNOVER & HOW
TO STANDARDIZE
YOUR MATERIALS
Time is of the essence when it comes to renovating a
rental property or turning a unit over between tenants.
The following tips will help you save money and cut
down on vacancy time.
Tenant turnover can be a stressful time in your property
management business. Often times there are multiple units
coming available and new tenants moving in within a tight
timeframe. One way to help lessen this burden is to standardize
your materials across all of your rental units. This can be done
over time as your units become vacant to limit your upfront costs.
Do you know why stores like Costco are able to give you such a
great price on groceries, home goods, clothing, and electronics?
It’s because the prices are based on bulk purchases with few
frills and limited choices. You can apply this same mentality to
your rental properties when choosing materials and getting them
rent ready.
Choosing The Materials:
Your goal is to have a comfortable living space that attracts a
quality tenant, but does not cost a fortune. That can be
accomplished by selecting the right materials and finding them at
a good price.
Paint Colors:
Choosing to paint your rental properties all the same color
can be a big time and money saver. Not only will you be
able to save when you buy the paint, it will make touch-ups
much easier in the future. Always buy the 5 gallon bucket,
even if you only need 2 or 3 gallons because you know that
you will be able to use it in the not too distant future.
Using the same paint color also makes it easier to simply
repaint an entire wall and have it blend into the space. This
saves you from having to paint the entire room when only
27
one wall really needed the touch-up - saving you time and
money again.
When choosing your paint finish, remember your goal is to
have to do as little touch up as possible. Semi-gloss, while
usually reserved for bathrooms and kitchens, can be great in
rental properties. Tenants are generally rougher on walls than
homeowners and this hearty paint finish can stand up to the
extra wear-and-tear. If you’re lucky, you might be able to skip
the painting and be able to wipe down the walls instead.
Flooring:
When it comes to flooring the thing most landlords say is to
avoid carpet when possible. Carpet does not wear well so it
needs to be replaced more often and it has to be cleaned in
between each tenant turnover. This costs you time, even if your
tenants cover the cost of cleaning.
If you happen to purchase a property with hardwood floors,
most landlords recommend keeping them and doing the
necessary work for a hard top coat to seal and protect them.
Outside of finding hardwood under existing carpet, most
landlords choose to use ceramic or porcelain tile, vinyl plank
tile, vinyl sheeting, or linoleum squares.
A lot will depend on your location as the weather and humidity
dictate the material choices and preferences of renters in your
local market. Whichever flooring you choose, be sure it is a
neutral color, that it can be repaired relatively easily, and that it
is installed well.
Kitchens:
If your investment property needs a lot of renovation, your
kitchen and baths will be where you spend the bulk of your
budget. The saying of “you get what you pay for” works here
too. Look for quality items at good prices.
Shop local specialty shops, Habitat ReStore, and the Big Box
stores like Home Depot, Lowe’s or Menards. Before you buy,
do your research. Visit different stores and compare prices.
Ask other landlords for recommendations and good resources
in your area.
Granite, when using the in-stock material, can be found at
close to the same prices for laminate countertops. This will
hold up to the test of time and look very nice in comparison.
Appliances are another area where you can save. Stainless
steel is preferred by high-end renters, but not necessary in
mid-range properties. Look at getting matching finishes like
black instead.
Farmhouse or apron sinks are all the rage right now, but they
can cost a fortune. IKEA has some inexpensive options for
fireclay sinks that are durable and eye-catching.
Bathrooms:
The consensus on bathrooms is to keep them simple.
Bathrooms might be the smallest rooms in your rental, but they
can eat up the biggest portions of your budget. Like in your
kitchen, keep your colors neutral and the materials as durable
as possible.
28
The best solution to keeping your bathroom in good shape is to
get a vent fan installed and connect it to the overhead light.
That way anytime the light is on, the fan will be running as well.
This will keep the mildew at bay and tenants will not have to
remember to turn on the fan separately.
Door Locks:
Pro Tip:
#1: Choosing a neutral color palette keeps your decisions in the
process to a minimum. In a world where time is money, not having to
make decisions about colors, fixtures and finishes can mean moving
a tenant in a month earlier.
Between each tenant, you’ll want to be sure to change the
locks on your rental properties. You cannot be certain that all
keys have been turned in and it will give peace of mind to all
parties involved. However, no one wants to spend half a day
replacing the locks or storing and rotating them between
properties. A good tip is to use the new instant re-key types of
locks from Kwikset. These locks come with a key pin that can
instantly reset the lock to any Kwikset type key used. You can
rekey an entire home using a new key in a matter of minutes.
Another great landlord tip is to only use a deadbolt with a nonlocking doorknob on the exterior doors. This makes it
impossible for a tenant to lock themselves out of the rental.
29
Good landlords know that time is money. Your time is a limited
and very valuable resource. Use it wisely. Instead of working so
hard on the details of property management, use these proven
strategies to systematize your rental business management and
get busy working on the money making deals that will grow your
bank account.
The following page is dedicated to breaking down the resources
listed throughout this book. Put it to good use and start saving
time and money today. Not all of the resources are free, but all
are highly recommended and immensely valuable to building a
sustainable, hands-free business that makes you money month
after month.
30
RESOURCES
The following resources have been highly
recommended to us by actual landlords. We have
vetted these resources and trust them to provide the
right tools you need to run a successful business. Some
of these links are affiliate links which means we may be
compensated if you decide to make a purchase based
on this referral. We hope you value the free information
we have provided in this book. If so, please consider
using the resources below to grow your business.
Property Evaluation Tools:
Rent Payment Tools:
PropertyEvaluator
Movoto
GreatSchools
RentMonitor
Advertising Tools:
Zillow Rental Property Manager
Craigslist
MixMax
Calendly
YouCanBook.Me
Tenant Screening Tools:
TransUnion SmartMove
Investigative Screening & Consulting
Docusign
Hellosign
Accounting Tools:
FreshBooks
Xero
Neat Desk
Expensify
Shoeboxed
Website Tools:
SquareSpace
WordPress
Wix
Weebley
31