SMARTERLANDLORDING

ADVICE FROM EXPERIENCE

Forms, Files and Tools

Online Rental Payment – A Must Have Tool

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I have a question for you.  What is the one thing we landlords want?  I’ll give you a hint. It usually comes on or about the first of the month.  Yep, you guessed it, the rent.  We want to collect the rent.

So here is another question.  Why do many of us in this day and age make it so difficult for the tenant to get us the rent?  Think about it.  How many of you still require your tenants to mail you a check?  Why do you make your tenants go through the process of finding an envelope, stamps and a check month after month?

There is an easier way.

Set up a system to allow your tenant to pay their rent online.

Almost nobody writes checks anymore.  In fact, your tenants are already paying most of their bills online anyway.  They do not have to find stamps for their utility bills or car payments.  They don’t write checks at the grocery store.  I’ll bet many of them do not even carry much cash and instead use electronic debit payments for almost everything.

Setting up a system for online rent payments is easy to do.

We used a system at clearnow.com for many years.  I highly recommend them.  We would still be using it today but our cloud based property management software has an electronic bill payment system included.

The clearnow.com system is a great tool all smarter landlords no matter what your level of experience or how many properties you have.  Using this system will save you, and your tenants, time and effort.  There are many other benefits as well.

  • It is a great marketing tool for the landlord.
  • Rent payments get directly deposited into your bank account.  No more running to the bank every time a check arrives in the mail.
  • Rent collection is much easier.
  • You get a heads up e-mail if a tenant cancels their automatic payment.
  • You can set up different debit days working with your tenant’s pay schedule.
  • Tenants can build their credit histories.

On the down side, there is a small fee charged for this service, but I believe the fee is well worth it for the amount of time you will save.  Plus, this service will not work in all markets or with all segments of the population.  Some tenants simply are not going to have checking accounts.  Tenants in those markets will still need to bring you a money order.

Online rent payment is the wave of the future however.  Philly.com for example reports that rent payments made online have increased by over 66% in the last three years.

So do yourself and your tenants a favor.  Set up on online rent payment system today.  Once you do, you will never look back.

What’s The Rent?

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Smarterlandlords want to maximize their investments by maximizing rental income.  That means they need to be charging top dollar for their rental properties.  Problem is, how do they know what to charge?  Here are some tips and tools to help.

 

 

 

  1. Talk to other landlords.  Most have no problems telling you what they get in rents because they want to verify what they are doing as well.  Where do you find other landlords?  You can find then at your local REIA.
  2. Scan Craig’s List.  Most landlords will put “for rent” ads up on this site.  You can refine your search in a variety of ways and target your market.
  3. There are several other tools available online.  Use them to establish a base.  But be careful.  Some of the data on these sites can be a bit misleading.  So know your market. Here are a few of the most popular.
    • Hotpads.com – The place to find your place.  Do a search here like you would for Craig’s List.
    • Rentmetrics.com  – Claims to be real time rent comparable data for real estate professionals.  I took a look around for my area and was impressed.
    • Renometer.com  – Paying too much or charging too little?  Cool site but it gave me quite a range for my area.
    • Zillow.com – Search the for rent section to see what you can find.  This site is nice, but it also gives me quite a range.

Remember however that these websites only show what rent was being asked for.  They do not really show you what the landlord actually got in rent.  So again, use these sites as a starting point.

  1. Finally, depending on your market, you may have to drive around and look for “for rent” signs and give them a call.  Some markets are just not going to be as accessible on the internet.

Once you have done your research, try putting your property on the rental market for as high as you think it can go.  If it does not rent in a week or so, you are likely asking too much, drop the price until you find a renter.  Only then will you truly know how much the rent is.

A Key (Box) For Saving Time and Aggravation

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Ever notice that tenants will lock themselves out at the worst possible times?  Mine have called while I’m on vacation or out of town even once during an anniversary dinner.

Repairs needing help from contractors were always fun too.  They would tell you when they would show up so you could meet them and let them in the property.  But, those contractors always took a little longer on the jobs before yours and that wait was always a little (a lot) longer than you thought.

I used to go to my properties to let locked out tenants in (yes, I did charge them) or to let in contractors.  As I got more properties however running here and there to unlock doors became quite the time consumer.  I am lucky, most of my properties are pretty close to my home, but I know other landlords who live much farther away, even in the next town.  So quickly running over to their property was not an option.

My solution to recapturing my time and reducing aggravation was to place key lockboxes at my properties, in which I put keys to every lock on the property.  Now, if a tenant calls while I am on vacation or simply out of town, I can provide them with the access code to get their key and open their apartment.  Now, when a trusted contractor needs to go to a property to make a repair, they have the access code to get the keys, make the repair and then lock it up upon leaving.

I use a lockbox from Master Locks.   This lockbox has space for several keys. It is sturdy and hangs easily.  Plus the combination code can be set and reset easily which I do from time to time or if a tenant has gained access.

These boxes have been a true time saver.  No more going to let a locked out tenant in.  No more waiting for contractors to show up.  Now I just text them the address, the problem and the lockbox code and they text me back when done.  Take some of your time back and get some of these lockboxes for your properties today.  To save money and time, I get mine from Amazon.com.  You can too by clicking this link.

The “Getting Your Deposit Back” Form

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Tenant turnover is one of the costliest aspects of this business.  You have to advertise and re-rent the property.  Most likely you will also have to do some clean up and repairs after the tenant moves out.  One of our most important goals in this business is to get our properties back from tenants in a clean and nearly rent ready condition.

Getting your properties back in a clean and rent ready condition is not impossible.  To do it you need to do three things.  First, collect a security deposit for the property.  Then provide your tenants with a “Receive Your Deposit Back” form upon their move in.  Lastly, provide the same form again when the tenant gives notice that they are going to move out.

The “Receive Your Deposit Back” form states very clearly what the tenant must do to get their deposit back upon move out by listing the costs to clean and repair various items that were clean and working upon move in.  For example, if the tenant does not replace a burned out light bulb, it is going to cost him $15.  If they do not clean out the stove, that will cost them $75.  If they did not feel like vacuuming or sweeping up, that will be $50.  If they leave a bunch of junk, it will cost them $75 per hour to clean it up.  These costs are not made up; they are based upon actual labor and materials charges.

The goal here is not to make money with this form.  I can make more money if I can quickly re-rent my property so I want it returned to me pretty much the way it was when it was rented and I want to give the tenant their deposit back.  By using this form you create the incentive for your tenants to give the property back in a clean and working condition.  Tenants now know that it will cost them if they decide not to clean the stove when they leave for example.  We do allow for “normal wear and tear” such as small nail holes from pictures, scuffed up paint and very minor issues that come from someone living in the property.

This strategy has worked pretty well.  Plus, as an added bonus there are less disputes regarding deposits after move out.  The tenant was provided a list.  They signed the list and they made their choice upon move out, clean or not clean.

You should use such a form to help you get your properties back in a nearly rent ready condition.  To help you get started, you can download a copy of the form I use here.