As a landlord it’s likely your day to day is filled with tasks.
From dealing with maintenance requests, chasing rent payments, tracking expenses, and a thousand other small jobs, being a landlord can be overwhelming. This is especially true if you also have a full-time job. It can (almost) seem like your real estate investments just aren’t worth it.
Thankfully, the real estate industry is quickly adopting new technologies that are revolutionizing the lives of DIY landlords. Here are the top 10 ways that property management software can help you scale your real estate investment business.
1. Avoid property management fees
Hiring a property manager is, no doubt about it, the easiest solution to managing your investments. However, they come at a price, quite a steep price. They are running a business too after all. In general, they charge around 10% of your monthly rent, plus additional fees for things like finding and screening tenants.
2. Choose the better tenants
No one is going to care more about the quality of tenants as much as you do. Whilst it may take a bit of practice to learn how to tell the good eggs from the bad, you will likely have more demanding standards than if you let someone else determine who is going to move into your property. In the long run, having better tenants could save you a lot of money, they’ll look after the property better and report maintenance needs in a timely fashion.
3. Have more control
You have more control over what happens in your property when you personally manage it with the help of property management software. Paying closer attention to your property will help you ensure the property stays in tip-top condition, reducing major maintenance expenditures as well as increasing the value of the property over time. It will also have the added bonus of helping you build a positive professional relationship with your tenants meaning they are more likely to look after your property.
Better Tenant Management
There are a plethora of websites to list on where you can easily get your property in front of potential tenants. What this means is that whilst finding tenants was once a challenge, something that it would make sense to hire a third party to do for you, you can now easily, and cheaply get your property in front of thousands of targeted individuals.
Everyone has their own process and criteria for their ideal tenants. However, this process has been incorporated into a lot of property management software. For example, Landlord Studio allows you to screen tenants right from the app to determine things credit, criminal background, and rental history at no expense to yourself.
We don’t suggest that people rely entirely on a tenant screening service, rather combine it with their own process.
Routine communications with tenants can be immensely time-consuming. Things like notices, welcome letters, receipts, or invoices. These can easily be managed from within property management software like Landlord Studio who have dozens of customizable templates ready for use.
7. Collecting Rent
Collecting rent is a vital part of being a landlord. However, not everyone no matter how carefully you screen them will remember to pay their rent. Using property management software you can automate rent reminders and rent overdue reminders to chase up tenants so you don’t have to worry every month if the rent is going to come in.
Many softwares also have their own built-in payment portals that allow your tenants to pay via their software. However, there are plenty of payment software, like Zelle pay which allows users to easily pay rent straight into their landlord’s bank account.
8. Tracking Income and Expenses
Keeping careful records of income and expenses is another integral part of being a landlord.
Using property management software like Landlord Studio you can quickly and easily stay on top of your accounts, instantly generate professional reports, reconcile with your bank account, and more.
Common expenses include:
- Mortgage interest (NOT the mortgage payment itself)
- Property taxes
- Management Fees
- Travel expenses to and from your property if the primary purpose is to manage the rental property
- Cleaning, repairs, and maintenance
- Realtor commissions
- Legal and professional fees
Other expenses include:
- Advertising expenses
- Necessary supplies
9. Tracking Mileage
Just like it’s important to keep good records of your income and expenses you need to keep detailed records of your mileage. The reason being you can claim back against your taxes 58 cents per mile for business miles driven (2019). Obviously, if you drive a lot when managing your rentals this can add up to a sizeable amount that can be claimed back against your income tax.
It’s important that you record; start location, end location, miles traveled, and the purpose of the journey.
10. Digital Documents
Digitizing important documents like lease details, receipts, invoices, and storing them all in the same place, neatly organized will save hours of organizing through paper documents at the need of the year when you file your taxes. You can do this via property management software like Landlord Studio.
What all of these benefits add up to in the end is more time and money at the end of the day. Enabling you to grow your rental business and achieve financial freedom faster whilst having more time to enjoy the good life.
The following blog post was contributed by Ben Luxon of LandlordStudio