Posted on Wednesday September 22, 2021 at 02:19PM in General
There's a reason why countless properties are making the switch to an online landlord software: it plays a pivotal role in creating a streamlined and smoother rental process for all parties involved.
4 Key Benefits of Using a Landlord Software
There is no doubt that online software will improve the ways that a rental property runs. Here are four perks of landlord and rental property software that benefit both landlords and tenants alike:
#1: Quicker and Consistent Payments
Paying rent has never been easier than with an online software. Not only can tenants set up autopayments with their choice of a preferred method of payment, but landlords also get their money much faster without having to go to the bank and wait for checks to clear.
#2: Affordable Pricing
The beauty of working with landlord software, especially with Schedule My Rent, is its affordable price tag. There is no setup, monthly, or minimum fee to worry about, making the incredible features of the software worth a great value.
#3: Customizable Features
Online landlord software offers a level of customizability to fit the unique needs of each landlord and tenant. Some of these features include the choice to split the rent between roommates, choice of payment method, custom late and return fees, and so much more.
#4: Better Organization
Running a rental property is difficult enough, let alone also having to organize the tenant’s physical rental checks, paperwork, and requests across multiple platforms. The great part about an online system is that it allows landlords to track charges and payments, maintenance requests, and expenses all in one centralized place.
To work with a landlord software trusted by thousands of users, schedule a 30 day free trial with Schedule My Rent today!
Posted on Thursday August 26, 2021 at 08:45AM in General
Owning a rental property investment can be a rewarding opportunity, but it also burdens you with some major responsibilities. Every state has a huge number of laws, rules, and regulations governing landlord and tenant relationships to protect all parties involved, and juggling all of these factors can be difficult.
Even situations that are entirely out of your control can drop huge liabilities at your doorstep, so it’s vital for you and your business to be proactive about minimizing risk and liability whenever possible. From property maintenance to online lease and property management software, here are a few things you can do to protect your prospects.
Screen Your Tenants Carefully
It’s an unfortunate reality that not all tenants will use your property for good purposes. Some will treat your rental with the respect it deserves, while a problematic handful could miss rent payments or trash the property. Lease out your property to unreliable candidates, and you might end up with significant monetary liabilities.
Thorough tenant screening can help you reduce these risks by helping you pick only the best and most dependable tenants for your rental. Ideally, your tenant screens should include a detailed background check of the candidate’s criminal record and employment history to verify that they have a dependable income and a tendency toward good behavior.
Double Down on Maintenance
Broken facilities aren’t just annoying for your tenants— they can present active risks to their safety. As the landlord, it’s your responsibility to ensure that you never endanger your tenants and quickly repair any major damages on your property.
If you let damaged facilities like water or air go unrepaired for too long, you may end up being charged for negligence. It’s a good idea to partner with a local repair company to reduce these risks and provide quick responses for any issues. Of course, ensure that any professionals you hire are fully licensed and insured, as unprotected workers can generate even more risks.
Develop Airtight Contracts
It isn’t difficult to find blank templates for leases and contracts online, so it may be tempting to use one of these and manage your documentation yourself. However, these one-size-fits-all solutions will likely not address all the intricacies and unique factors affecting your situation. If you use a blank slate like this, you may be missing out on important limiting clauses that could protect you from liability headaches.
For the best results, you should work with a real estate lawyer in your local area to verify that all leases and contracts are written with your market in mind.
Use Online Lease & Property Management Software
Documentation is always a hassle, and if you’re trying to manage all your contracts on your own, you may have some recordkeeping troubles in store. Using an online platform to help you and your tenants keep track of your paperwork can help you stay on top of all your numerous rental agreements and ensure that everything remains in compliance.
There are a few potential options on the market, but Schedule My Rent is easily the best when it comes to convenience, value, and functionality. We have served landlords and tenants across the country and have helped take the hassle out of managing leases. Call us at (844) 465-3339 for more information about our online property management software today.
Posted on Tuesday August 24, 2021 at 04:45PM in General
It takes time, effort, and dedication to secure a tenant for your property. However, your job isn’t over when your tenant settles in - it’s only just beginning. Now, your focus should turn toward retaining your residents and keeping them happy with your rental.
Tenant retention is no one-time project. Instead, it’s a dynamic process that involves extensive planning and dedication on your end that requires using online lease management software. If you’re curious about how you should get started, here are five key tips to remember to help retain your residents.
One of the most practical ways to retain your tenants is also the most obvious: keep your property in good condition. Nobody likes the idea of living in an unsightly home, which is why it’s vital to maintain your rental and ensure that it looks attractive all year round.
Most importantly, keep an eye on essential facilities like plumbing and air. Your tenants won’t hesitate to seek out other residences if they find that you aren’t taking care of the bare necessities for comfort. Consider working with a dependable contracting company so that you can quickly address repairs and maintenance issues.
No one likes feeling like they’re in the dark. Your tenants shouldn’t have to jump through hoops just to get in touch with you— instead, prioritize communication and provide plenty of ways for your residents to reach you. Be available by call, text, email, or in-person, and ensure that you respond to inquiries promptly.
Sometimes, life happens. While it’s always essential to be firm about deadlines for paying rent, you should have some degree of flexibility for tenants that have been dependable in the past. When you do so, you’ll help foster loyalty with your residents and show that you care about them beyond simple goals for business profitability.
When you’re setting rent for your property, you have to toe a fine line between making a profit and providing a competitive value. You may be tempted to set a high price to maximize your revenue, but if you want to attract and maintain your tenants, you’ll need to keep your rent below the market average.
Offering a good value for your rent will not only incentivize tenants to move in but will also encourage them to renew their leases time and again. In the process, you’ll make further profits than you would have with a higher rent that routinely drove tenants away.
If it’s hard for you to keep track of all your leases and contracts, imagine how tough it is for your residents. You can simplify your lease management efforts by using a streamlined online lease management software, which helps you organize all your tenants’ and landlord documents.
Try Our Lease & Rental Property Management Software
At Schedule My Rent, we provide the industry’s most effective and efficient rental management platform that landlords and tenants across the country trust. Call us at (844) 465-3339 for more information about our online lease and property management software today.
Posted on Wednesday June 23, 2021 at 08:38PM in General
Tips to Create a Property Management System Strategy
Creating and implementing an effective property management system strategy is essential for a profitable rental property’s continued success. Improperly managing a property can quickly lead to significant issues that could cost a property owner money and reputation. Managers running multiple properties or properties with multiple units need property management software and a strategy to use it effectively and efficiently.
Organizing and maintaining your property management system will help you keep tabs on all aspects of the operation. It allows you to anticipate the unexpected and handle minor issues before they become major problems. Setting up a new strategy from scratch or reexamining an existing plan provides the opportunity to create a new system that monitors the progress of all aspects of the tenant-landlord relationship to make sure you never get caught off guard.
A property management system, commonly referred to as a PMS, is computer software that provides a centralized location to organize, schedule, and perform daily activities involved in running a rental property. Implementing a strategy using a PMS increases efficiency by customizing your scheduling and record-keeping needs.
Your property management system should handle all aspects of running the property while streamlining the relationship between you and your tenants. A well-run and organized PMS strategy can increase tenant retention and satisfaction rates while saving you money in various operational and maintenance areas. An effectively run PMS is an indispensable tool for modern property management in the technological age.
Maintaining a rental property is a complicated, involved, ongoing process comprised of many moving and changing parts. A PMS is used to keep maintenance and tenant records organized to maximize your time and budget.
Even the best system to manage rental properties is only as good as the strategies implemented by those running it. The only way to fully take advantage of a property management system’s functions and features is to customize a plan that services your specific setup and addresses your tenants’ needs.
The following are some common-sense tips for establishing an efficient and revenue-generating property management system strategy.
The rental lease is the single most important document relating to a residential or commercial property rental. The lease must clearly lay out the tenant’s responsibilities to avoid surprises and help mitigate any disputes. The landlord also holds specific duties that need to be outlined in detail by the lease, ensuring both sides enter the agreement with complete transparency.
The only way to know for sure that your rental units are being properly taken care of is to include regular inspections of the property as part of your overall property management strategy. Regularly scheduled inspections provide the chance to change filters, inspect fire extinguishers, and perform smoke detector tests throughout the property. Being proactive and physically examining all property areas allows you to schedule needed service calls and update or replace systems before problems occur.
Running a rental property with multiple units and tenants involves processing a lot of paperwork and documentation. One of the greatest benefits of digital property management systems is the ability to customize the organization of all of your important, ongoing documents. Inspection records, service maintenance histories, and purchase receipts are kept in a centralized location and should be viewed and monitored regularly. Set up notices and automated reminders to ensure all matters are taken care of properly.
The interior and exterior maintenance and repair needs of your rental property vary depending on the season. Seasonal maintenance strategies adjust to annual changes in the weather. Anticipate each season’s needs and plan to help make sure the property is safe and looking its best throughout the year. Scheduling annual cleanings and system inspections will adequately prepare you for each season and save you money on updates and repairs.
Communication helps prevent and mitigate nearly any problems or issues that come up with your tenants, contractors, and vendors. The digital age offers more chances than ever to communicate easily and quickly. Having an efficient system to accept and process tenant maintenance and repair requests will help keep communication lines open when your renters need it the most. Creating portals for tenants to connect offers a more streamlined approach that can automate and simplify the process for both you and your tenants.
Unexpected circumstances can derail the best PMS without an emergency fund as part of your overall strategy. Planning for emergencies can help to save you money and hassle when unexpected circumstances and expenses occur. Creating a reactive maintenance strategy provides a quick response in times of crisis. An emergency account should also be maintained by adding a certain amount each month, so there is always something in reserve when you need it most.
The tenant-landlord relationship’s most tenuous part is when the lease ends, and the tenant moves off the property. It is crucial to have a strategy for quickly preparing the unit for the next tenant. You do not make any money on an empty unit, and you lose revenue with every day that goes by before replacing a tenant. An end-of-the-lease checklist will spotlight trouble areas that may need extra work before the property can be shown to prospective new tenants.
Schedule My Rent provides software that allows you to establish an effective property management system strategy to keep your property running smoothly and looking its best. Call us at (844) 465-3339 for complete information about our rental property management software and get started today.
Posted on Monday June 21, 2021 at 04:32PM in General
Posted on Saturday March 27, 2021 at 01:58PM in General
What to do if your tenant isn't paying rent
As a landlord, it is ideal to always have good tenants who pay on time who you can keep happy and satisfied. However, that is not always the case and no matter how well you screen potential tenants, you will end up with some less than pleasant tenants. When one of your tenants isn’t paying rent, it is important to have a plan with how to manage the situation. Here are some steps and words of advice for confronting and dealing with a tenant who won’t pay rent:
- Keep records and review the lease When managing rental properties there is a lot to keep track of, especially with multiple units and properties. It is especially important to keep records of payments including when and how much is due. Schedule My Rent offers an organized and simple landlord software that automatically documents when and how much tenants have paid and highlights missing payments in red making it easy to know who owes what.
- Communicate with your tenant As a landlord, if you consistently let your tenants pay late or make late partial payments without any late fees or consequences, chances are they will do so every month. You are probably relying on getting rent payments every month for your personal finances, so if your tenant doesn’t pay on time it could set you back.
- Hire a property manager If you aren’t interested in managing tenants who won’t pay their rent, or you are too lenient on enforcing timely rent payments, you might benefit from hiring a property manager. A management company is a neutral third party who has policies for handling late rent payments, and a tenant who isn’t paying you rent will probably not try to skip on rent if a professional is in charge.
- Use a property management software If you would like to still be in control of your property, but don’t want to have to hassle tenants for rent, you can use a property management software. Schedule My Rent has features that allow you to send rent reminders to tenants, add customizable late fee policies, and stop rent collection from a tenant in the eviction process. Our system will take out the hassle of managing a property and will give you full control of your business.
- Send your tenant a “pay or quit” notice In most states, landlords are required to send a “notice to pay or quit” to their tenant who isn’t paying rent. This formal letter or email says something like, “You haven’t paid rent. You have X days to pay rent in full or your lease will be terminated and you will have to move out.” Normally, the X number or days is between three and five. If your tenant doesn’t move out or pay their rent, you are able to formally terminate the lease and your tenant will lose the right to live in the unit. If your tenant doesn’t either pay or move out, you can file an action with an eviction court.
- File an eviction action A landlord is never allowed to force a tenant out of a unit without a sheriff. The sheriff is legally necessary and landlords are not allowed to cut off utilities or lock a tenant out. If your tenant didn’t respond to the “pay or quit” notice as discussed about, you can go to a local courthouse and fill out the paperwork for an eviction hearing. It is important to bring the “pay or quit” notice that you sent your tenant for the court’s records. After paying court fees, the administrator will schedule your hearing (usually two to six weeks from now). Then you or the court will serve the tenant a subpoena (a document requiring the tenant to come to court).
- Alternate to an eviction: Pay your tenant to leave If your tenant still is not paying rent after your conversation, you can still avoid the eviction process. If your tenant is having financial troubles and that is the cause of them not paying rent, you can motivate them to leave by paying them.
Before taking any action, review the lease or tenant agreement and make sure that any grace period for making rent has expired. Also check to see if a late fee was specified in the agreement. Late fees are a great motivator for tenants to pay on time. Schedule My Rent also provides features that allow landlords to set a grace period, late fees, and daily late fees automatically.
It is important to communicate with your tenant and let them know that you can’t afford not to receive rent. If your tenant doesn’t communicate with you about why they aren’t paying rent on time and create a plan with you, it might be time to take action. Let your tenant know that if they can’t pay their rent, then they can’t stay. You could offer them the option to get out of their lease early without penalty if they leave by the end of the week. Sometimes if the tenant is faced with the prospect of losing their unit, they will be more proactive and responsible about paying their rent. If your tenant doesn’t want to move forward with that option, let them know that you will be giving them a formal eviction notice.
On the court date, show up to court and argue your case. If you win a judgement against your tenant then you can hire a sheriff to legally remove your tenant.
This seems like an odd solution since you are the one who is supposed to be receiving money. Overall if you weigh the costs and benefits of the decision it might work out for the better. An eviction will most likely get a tenant out of your property, but the process is long (typically one to three months). If your tenant leaves immediately for an amount that is less than one month’s rent, you will probably save yourself some money and the stress of an eviction process.
Posted on Wednesday March 17, 2021 at 01:26PM in General
Tips for Raising Your Tenants' Rent
Raising the rent on your property can be tricky. First-time landlords might be nervous about upsetting their good tenants already living in the property. Even experienced landlords could be worried about upsetting a close relationship they have with a tenant, or worried if it has been a while since rent was last increased. While it might be difficult, it is important to tell your tenant you are increasing rent, although you don’t need to justify it to them. There are many valid reasons for raising your tenants’ rent including increasing taxes, insurance premiums, maintenance fees, cost-of-living, and homeowner association dues. We have provided some tips for how to easily increase your tenants rent.
- Send a rent increase letter
- Include small rent increaes every lease renewal If you are worried about tenants moving out because of a large rent increase, consider increasing it by less than $50 each renewal time. A good general rule is to increase rent by 3%-5% each year. If you are in a position where you are trying to convince a great tenant to renew their lease, you could consider waiving the rent increase so they will continue to live in your property. An excellent tenant is more important than a rent increase.
- Do your research and know the law Before deciding to increase rent, do some research on what the fair market value is for rent in your area. Even though you own the property, you can’t simply raise the rent to whatever value you would like if it is rent controlled. It is important to know if there’s a statute that limits how much you can increase rent.
- Remember you run a business It is important to remember that you are running a business. Even if you are close or friendly with your tenants, if you are losing money it is time to adjust rent to help your business succeed.
When sending your tenants a rent increase letter, it is important to give them plenty of time to decide if they would like to stay or end the lease (and give you 30 days’ notice). 60 days before the lease ends is the right amount of time to send out your rent increase letters.
In your letter, you can thank your tenant for being such a good tenant and describe why such as always paying rent on time or keeping the property in great shape. Next, tell your tenant that you are increasing the rent and if you would like you can provide an explanation. Then state what the new rent will be and the date when it becomes effective (the day after their lease ends). If you and your tenant have a fixed-term lease, then you could include a new lease and ask that the tenant read it, sign it, and send it back to you. If you have a month-to-month lease with your tenant, then they won’t need to sign a renewal (because it automatically renews each month).
You can choose to send your rent increase letter via email or mail. If you choose mail, consider sending it through certified mail. Certified Mail is a service by USPS that allows the person sending the mail to receive confirmation that the mail was received. This creates a dated paper trail for your reference, and allows you to know that your tenant has received the notice.
It is important to track when your lease ends. If you use Rental Property Management Software like Schedule My Rent, you can enter a lease end date. You can easily see when a lease ends on your dashboard and you are automatically sent reminder emails about upcoming lease end dates.
You could also consider including a rent increase clause in your lease. If you are upfront with your tenant that you will increase the rent, then there will likely not be negative feedback. This clause could simply state that there will be a small increase (3%-5%) in rent every year. When your tenants sign the lease, they will be prepared for the rent increase.
If your tenant signed a lease, you are also unable to increase your tenants’ rent until the lease is over. The only exception is if you stated in the lease that you can increase rent during the lease period. But this negates the “fixed” lease idea and often does not hold up in court.
If your tenants are on month-to-month leases, you need to give them enough notice (varies depending on your state, but typically 30 days’ notice). This notice needs to be via email or a letter and not a verbal agreement which usually won’t work in court if it is argued.
You are not able to raise rent because you made necessary repairs and want to punish your tenant for complaining about the problems. You are also not able to raise rent in a discriminatory way because of a person’s religion, sexual orientation, or race.
In many states, there are situations that prevent you from raising rent for a certain period of time. These situations include if your tenant has been involved in a tenant’s organization, filed an official complaint with a government authority, or exercised a legal right. It is important to know the laws of your state, because many courts will assume retaliation if you increase a tenant’s rent after a negative action is taken by the tenant. The typical period before you can increase rent is 60 to 180 days, but differs by state.
You should be firm with your tenants once you have done your research and decided on a fair rent increase. It is not a great idea to negotiate with your tenants or ask their opinion on what a fair increase would be. It is important to ensure that your rent is in the market value, because if it is way over market value then tenants will see that as unfair and probably leave.
In order to raise the rent a fair amount and keep your tenants, you can look at actual rent prices in similar rentals in your area. Looking at actual rent data provides you with an actual amount and is better than looking at listing price data which is just a projected amount.
We hope these tips help make increasing your tenants’ rent a smooth, and worry free process. Rent increase can be tricky, but it is essential to maintaining your business and competing with other rentals on the market. If you follow these tips and professionally give your tenants their rent increase notice, you will wonder why you were ever nervous about the process.
Posted on Sunday March 14, 2021 at 02:19PM in General
When do Guests become Tenants?
Your renters will inevitably have people visiting their rental including family, nannies, partners, and roommates. But when does a visitor become a tenant?
It is important to protect your property, your other tenants, and your legal rights by making sure guests don't become tenants without your approval. Here is a real-life example from one of our owners showing how this can easily occur.
"We had an older woman that lived in one of our units. She was having a few medical issues and her son was coming over occasionally to help her out. Over a period of multiple months, he needed to come over more often and occasionally started spending the night. We wanted to be supportive since the tenant was having health issues and didn't take any actions. As the months went on, the son slowly moved in and his wife and son also moved in. Once again, we were trying to be supportive since the tenant was having medical issues and needed a support system. We then started to receive complaints from other tenants about the couple yelling and fighting and disturbing other residents. A few days later, the police had to come out because there was report of a gunshot. At this point, we realized our situation had gotten out of control and had the couple each submit an application and background check. We were horrified to discover a long list of evictions and violent issues in their past." This is just one example illustrating the need to know who is living in your rental and to make sure you find out right away even when nothing looks wrong.
The difference between a tenant and a guestMost landlords consider a tenant as a person who is on the lease. That is usually a good definition, but it doesn’t account for guests living in the property without the permission of the landlord. Tenants on the lease are responsible for paying their rent on time and not damaging your property. Guests who begin to act like tenants become a liability and you can’t legally account for them. Tenant’s rights allow guests in a tenant’s rental, but rogue tenants are not allowed and cause legal issues. It is very important for adult occupants who are living at the property to be on the lease.
Examples of guests vs tenantsIt can be difficult to determine if someone living on the property is acting like a guest or a tenant who needs to be added to the lease. For college students, if they are returning to the unit for weekends or school breaks and will go back to school they are considered guests. If they are home for the summer or have stopped attending school, then they would be considered a tenant. For elderly parents, if they are visiting for a few weeks or helping their children out they would be a guest, but if they are moving in with your renters because they can’t take care of themselves, then they are considered tenants. For hired help (such as nannies), if they are spending normal business hours at the property, they are considered guests. If they begin to live at the property full time, then they would be considered tenants. For friends or romantic partners, if they visit during the day or spend a couple nights at the unit they are considered guests, but if they spend most days and nights for weeks or months, then they are considered tenants.
Helpful signs guests are becoming tenantsGuests can start to become tenants if they begin to spend most of their time at the property as given in the examples above. Some other signs are that they are paying rent, moving in pets or furniture, making maintenance requests, receiving mail at the property, and spending every night at the unit.
Know the lawsState laws vary on the issue of tenants vs guests on your property. It is important to know what the specific laws for your state are. It is important to address how long a guest is allowed to stay in the unit, before they are considered a tenant. For example, it could simply state that guests can stay no more than 10 to 14 days in any 6 month period.
When should you add a guest to the lease?The best practice in this situation is to add any adult that is occupying the property to the lease. Once they are added, they become accountable for the terms of the lease. This is an important step to clarify who is living at your property.
The conversation with your tenant about adding a roommate to the lease can be uncomfortable, but it is necessary. Most landlords ask their current tenant to simply add their roommate to the lease, and this provides the landlord with an opportunity to discuss renewing the lease with new terms if necessary. The alternate to this approach is the serve your tenant a lease violation notice and threaten to terminate your lease agreement. Most tenants would rather add their roommate to the lease than risk lease termination.
Preemptive stepsThere are easy ways to avoid the situation of a guest turned tenant. It is important to specifically mention guests in your lease and when a guest becomes a tenant. If you are upfront with your tenant about what the rules regarding guests are, then they will likely be more compliant with them. You can also consider having a conversation with your tenants regarding guests and explain to them what’s allowed.
In some cases, if you as a landlord accept rent from a guest, it might initiate a landlord-tenant relationship. This puts you at risk for legal issues, and you should only accept rent from people on the lease. In this situation, the guest might have the same rights as any of your other tenants. If you use Landlord Software like Schedule My Rent, you can document a clear history of who is paying on the lease. You also have the ability to immediately stop all or specific roommates from making payments which is very important if you are trying to move a tenant out or are in an eviction process. You can learn about additional options in our Rental Property Management Software Guide. It is also important to consult an attorney before you consider evicting a tenant because of guests.
Realistically, as a landlord, your tenants will have guests and you will probably need to decide if these guests are considered tenants. It is important to be informed and prepared to make that decision.
Posted on Friday March 12, 2021 at 03:18PM in General
Top 6 Ways to Finance Your Rental Property
Purchasing real estate can be a great investment and update to your financial portfolio, for a variety of reasons. Real estate is one of the primary investment categories, which also includes stocks, bonds, gold/commodities, and cash. Real estate often gives you an advantage against market volatility if stocks go down, and being a landlord allows you to have a steady stream of passive income. When buying a rental property, you need to have a certain amount of cash in order to get started and enjoy the perks. It can be challenging to discover the right way to fund your property purchase. Most investors use a combination of cash and loans to purchase a property to increase the leverage which increases the return on the cash that is used. While a loan can increase your return rate in good times, it can also decrease your return rate in bad times. Even if you decide to buy a property with another person, it is important to know all your investing options. We have provided you with the top six ways to finance your next property.
Loan optionsWhen financing your rental property, it is important to choose the right loan for you. Some loans have very specific criteria that needs to be met and if you choose the wrong type of loan, you could set back your success in financing your real estate.
- Conventional Bank Loans You are probably familiar with conventional financing if you already own your own home (that is your primary residence). This type of loan is not backed by the federal government and instead conforms to guidelines set by other parties. The typical down payment for this loan is around 20% of the purchase price of the home, but in the case of an investment property, you may need to provide a down payment of 30% of the funds.
- Tapping Home Equity - HELOC Another way to secure your investment property is through drawing on your home equity (through a home equity loan (HELOC), or cash-out refinance). Generally, you are able to borrow up to 80% of your home’s equity value in order to use it for the purchase of a second home.
- Fix-and-flip Loans If you would like another option that doesn’t include becoming a landlord, you should consider flipping houses as an alternative. You are able to receive a lump sum of profits when the house is sold, instead of waiting for rent checks each month for your return on investment.
- Private Funding Private funding is similar to mortgage lending in the aspect that some lenders can provide secured interest in the home or rental property. This process can be faster than the route of conventional mortgage financing. When considering this option, keep in mind that you may pay a higher interest rate. If the property is a good investment (if there is a positive cash flow through rental income) you can use the option of private funding until conventional financing is available for you.
- Insurance Company or Specialized Lender Insurance companies need a stable return and often use real estate loans. Because they are custom loans, these loans are typically for one million dollars or higher. You would contract directly with the insurance company or specialized lender that facilitates the loan. Most terms can be negotiated, including the term, interest rate, ability to pre-pay or no ability to prepay without a penalty, covenants, etc. Unlike a conventional loan, there are typically yearly reporting requirements where you need to provide a rent-roll, profit and loss statement, and there may be annual inspections of the property where an inspector reviews the inside and outside of a property to ensure it is properly maintained. Using rental property management software like Schedule My Rent helps you create a rent-roll report and track expenses. The interest rates are often similar or lower than a conventional loan.
- Cash-Out Refinance on a Primary or Secondary Home A cash-out refinance is when your lender uses one of your existing properties, a primary or secondary home, as security for your new loan. This process is the exact same as applying for a standard mortgage and takes around 30 to 45 days. You are typically able to borrow up to 80% of your home value. Through cash-out refinance, any existing debt on the property will be paid off and a new mortgage will be created. Then you will receive the difference as “cash out”.
- You provide the settlement statement indicating no financing
- A title search shows there are no liens on your property
- Any loans used as a source of your down payment must be paid back on your new settlement statement
- Your purchase was an arm’s length transaction
- Your new mortgage cannot be more than the initial investment that was used to purchase
- You must be able to source the funds for your purchase through bank statements, loan documents, etc.
Your personal credit score and credit history play a determining role in if you get approved for this loan, and how high the interest rate on your mortgage will be. Since you are renting this property and don't plan on living in it, it is not an "owner occupied" property your interest rate is typically .5% higher than a loan that is "owner occupied" where you live in the property. Your lenders will also review your income and assets and you must be able to prove that you can afford your current mortgage along with the loan payments on your investment property. You may have to have at least six months of funds for both of your mortgages. When your debt-to-income calculations are made, your future rental income from the property may not be included, depending how conservative the bank loan officer is.
This method has its pros and cons which can depend on what type of loan you decide to choose.
If you choose the HELOC option, you are able to borrow against the equity. This is the same concept you would use with a credit card, and your monthly payments would often be interest-only. The rate is variable in most situations (meaning it can increase if the prime rate also changes).
If you decide on the cash-out refinance method, you would pay a fixed rate, but it could extend your current mortgage. If you have a longer loan term, you are also paying more interest on your current residence. It is important to keep in mind that you will have returns on investment when you rent out the property.
This short term loan called a fix-and-flip loan allows you to renovate a property and put it back on the market as quickly as possible. These loans are essentially hard money loans. This means that the loan is secured by your property.
The benefit of this type of loan is that it might be easier for you to qualify for a house flip loan instead of a conventional loan. While your credit score and income are still considered, the primary concern is the profitability of your property. Your property’s estimated after-repair value (ARV) is used in calculating if you are going to be able to repay the loan. Another advantage is that you might be able to get loan funding in days instead of weeks or months when applying for this loan.
The largest disadvantage that is important to think about is that your interest rates can go as high as 18%, and you might have a small timeframe for paying back the loan. It is not uncommon for these types of hard money loans to have time frames of less than a year. It is also important to consider the origination fees and closing costs that could take out part of your returns.
Since this option has home owners using the equity from their personal properties, it may not be an option for you if there is simply not enough equity in your existing properties to finance the cash-out.
The maximum cash-out available to you if you refinance on a property you own (that was not purchased in the last six months) is 75% loan-to-value ratio (LVT) for one property, and 70% if you have a property with two to four units.
You are able to pursue a cash-out refinance immediately if these guidelines are met and if there was no financing for the purchase transaction.
Posted on Thursday March 11, 2021 at 03:02PM in General
Can my tenants break their lease?
Usually when a tenant signs their lease, you expect them to stay in the unit for the entire term of the lease. But occasionally this may not be the case. Your tenant could decide to move out early and break the lease. Is a tenant able to break their lease? What should you as their landlord do?
Your tenant most likely intended to rent your property though the entire period of the lease. Lots of different situations could have caused your tenant to move out early such as a job transfer, job loss, opportunity to buy a house, etc. Usually, if your tenant needs to break their lease, it’s for a good reason.
Is your tenants still financially responsible for their lease even if they move out early? You can’t make your tenant stay but this is still an important question for you to consider. Here are important details on how to proceed if your tenant breaks their lease.
A lease is bindingIn the same way a lease protects tenants from their landlords kicking them out before the lease ends without a cause, a lease also protects landlords from tenants who want to leave early. When your tenant signs their lease, they are agreeing to pay rent every month (or bimonthly/weekly) for the entirety of the lease. In most cases, if your tenant moves out 4 months early, they owe your rent for those 4 months. Although there are some exceptions.
- Check your state’s laws
- The unit in uninhabitable When renting to tenants, it is essential that you are providing them with an inhabitable place to live. You must provide a non-leaky roof, hot water, doors, windows that lock, heat, functioning electrical systems, safe stairs (if applicable), and no pests for the unit to be habitable. If you aren’t providing your tenant with a safe and livable unit or if you aren’t responsible in fixing anything that comes up that causes the unit to be uninhabitable, your tenant may be able to break the lease.
- Military or active duty Federal law allows people in the military to break their lease agreement to begin active military duty or if their orders take them approximately 50 miles or more from their unit. This law is called the Servicemembers Civil Relief Act and applies to members of the armed forces, National Oceanic and Atmospheric Administration (NOAA), activated National Guard, and U.S. Public Health Service. If this is the case, your tenant won’t need to provide you with a 30- day notice if they are leaving for military reasons (even if there is time left on the lease).
- You’re intrusive Even though you own the property, once you collect rent from your tenant, you forfeit the right to enter anytime you would like. In an emergency (for example the unit is flooding) you are allowed to enter the property, but if you would like to conduct a routine inspection or make a repair, you have to provide your tenant with a notice (visit https://www.schedulemyrent.com/blog/ for types of notices to send to tenants).
- What your tenant can help with If your tenant tells you that they want to break the lease, you can ask them to help you out. Your tenant might be able to help you find a responsible replacement tenant who can continue the lease, or they could show the unit to potential tenants. You should still screen your new potential tenant though.
- Fees for early termination As mentioned above, you are able to charge your tenant their rent amount until the lease has ended, as long as you are looking for a replacement tenant.
- Suing your tenant You might end up in a situation where you need to take your tenant to court. This could be the case if your tenant breaks the lease, won’t pay rent for the months until the lease ends, and won’t pay an early termination fee. It is important to consider talking to an attorney before taking legal action. When going to court, it could be possible for you to just present a copy of the signed lease and tell the judge which months your tenant owes rent for.
- Prepare for false charges To avoid paying rent after breaking their lease, your tenant might decide to place false charges on you. For example, they could claim their unit was infested with insects or rats (and you did nothing to remedy the situation), the heat didn’t function (or anything that could cause the unit to be determined uninhabitable), or you continuously visited their unit.
In most states, landlords are not legally allowed to hold their tenants to the terms of the lease while the unit is vacant. Even though the tenant has broken the lease by leaving early, the landlord must try to re-rent the unit (even in inconvenient times). Although your tenant is still responsible for paying their rent while you find a new tenant. You are still able to go through your usual screening process for tenants (you don’t have to rent to the first person who applies if they don’t meet your requirements).
In a few states, landlords are not required to look for a new tenant. In this situation, they can hold the tenant to the lease terms for the entire lease. It is important to know the specific laws of your state.
Even if you are being intrusive and not respecting your tenants property and privacy, your tenant still has to give you a warning before leaving. They need to provide a “notice to remedy or quit” which can be a letter saying “Stop coming by unannounced, or I’m terminating the lease in X days”. Your tenant will most likely not terminate the lease immediately. If you receive a “notice to remedy or quit” from your tenant, you might want to consider talking to a lawyer to ensure you aren’t violating any state or local laws.
If your tenant would prefer not to pay the ongoing rent charges, you could offer to charge an “early termination fee”. This fee is designed for the tenant to pay an amount that allows them to break the lease and leave without repercussions.
This fee is nonrefundable, so if your tenant decides to pay this fee (usually equal to two months’ rent) and you find a tenant within two months, you aren’t obligated to refund the prorated amount to your tenant. On the other hand, if it takes you three months to find a replacement tenant, you are not able to charge your tenant that third months’ rent if they agreed to pay the early termination fee.
If you decide to offer the early termination fee, make sure that you specify the amount in your lease, so your tenant has enough warning. This is important because you are not able to charge double rent amounts, but you are able to charge rent to your replacement tenant and collect the early termination fee from your original tenant. This is possible because your tenant decided to pay the fee to avoid the possibility of paying rent for over two months.
It is important to be prepared for these kinds of charges in order to defend yourself against them. You should keep maintenance records and photos of the unit to prove that you maintained the unit. Rental Property Management Software like Schedule My Rent provides Maintenance Requests so all tenant requests are easily documented incase you need them.
ConclusionIf you tell your tenant that they are financially responsible for paying rent if they break the lease until you find a replacement tenant or their lease ends, they might choose to stay in your unit to avoid paying rent at two units at once. It is important to consider all these factors when deciding how to proceed if your tenant breaks their lease by leaving early. You can’t make them stay, but in most cases you will be compensated for your efforts.
Posted on Sunday March 07, 2021 at 08:44AM in General
Investing in a rental property is a big deal. Before you get started, here are nine things that you must know to ensure that you’re ready to care for your property.Read More
Posted on Saturday March 06, 2021 at 11:51AM in General
4 Ways You Can Make Money with a Rental Property
Rental properties can be reliable money-making machines if you know how to leverage them properly. If you want to make a tidy profit by renting your real estate, though, you can do more than wait to collect rent every month. There are a few actionable strategies you should practice from the outset so you can make the most of your investment.
You'll need to balance your expenses, manage your property efficiently, and ensure that you're not spending money anywhere you don't need to. From rental management software to assessing your cash flow, simple practices can help you boost your profits and make the most money possible.
If you're wondering how to increase your profit margins, follow these four simple tips.
- Are you considering cash flow?
- Are you preparing for the future? Your rental property's value is never set in stone. Instead, as soon as you finalize your purchase, you can expect its market value to fluctuate over time. It would help if you planned for the future whenever you purchase a rental property to make sure that you'll make the most out of it in the long run.
- Are you making your property more attractive? Many properties can appreciate naturally over time. However, you can help boost your property's value and charge higher rent by taking a few intentional steps to make your rental more attractive.
- Can you streamline your management process? It should be abundantly clear by now that managing a rental property requires a lot of thought, care, and attention. Since maintaining your rental and keeping it competitive takes so much effort, you can't afford to waste time on tedious management processes like tenant screening and rent collection.
There's no better way to make money off your property than to think about your cash flow. In essence, your cash flow is the difference between your monthly operating expenses and the rent you collect. If your rent exceeds your operating expenses, then you'll start making money.
Let's say that you spend $800 a month on your property to cover its mortgage payments and taxes. If you then rent it out for $1200 a month, then you'll have a $400 difference for your cash flow.
This is the simplest explanation of cash flow in theory. In practice, however, it can be far more complex. Most rental properties come with "hidden fees" that aren't included in your monthly mortgage payment, and you'll have to take these into account.
For example, your property might need occasional maintenance. You may have to pay for plumbing services, roofing repairs, or other general upkeep costs. It's also possible that you'll experience times that your property doesn't have any renters at all, meaning that you lose months of potential income.
If you want to maximize your profits, you'll have to anticipate and calculate all these hidden expenses and subtract them from your rent. If you're going to spend $150 a month on maintenance and upkeep, for example, you should take that out of your $1200 to show that you're only netting $1050 rent each month.
Understanding your actual cash flow is essential so you can understand how much money you're making and budget your expenses accordingly. If you can realistically gauge your total costs ahead of time, you can set your rent appropriately and make sure you're setting yourself up for profit in advance.
Whenever you invest in a property, you should make sure that its value is on track to appreciate over time. By considering factors such as market trends, population growth, and historical metrics, you can determine whether your investment will pay off in growing values.
In large part, real estate properties appreciate due to the simple concepts of supply and demand. Any given area can only contain so much space for homes and businesses, so if the population increases, demand for its property inventory is bound to increase - and prices will rise along with it.
Use this understanding to your advantage by investing in properties in high-growth areas where values are on track to skyrocket. If data shows that most new arrivals in your area are flocking to neighborhoods near downtown, make sure to target those areas. Meanwhile, if history suggests that suburbs are due for growth, don't get left behind and invest in a family home. It's also a good idea to choose more modest properties in high-demand areas. By spending less upfront, you can increase your potential for appreciation.
You can gather the necessary data in a few ways. You can use real estate websites like Zillow to see trends in property values, or if your city or state shares population statistics, those can also serve as a valuable source of information.
If the property needs a few renovations, don't hesitate to make them. Something as simple as a fresh coat of paint or updated facilities can make your property more attractive to your buyers, which will make your rental more competitive and increase your profits.
However, if you plan on renovating your property, you'll need to remember your cash flow and your total monthly expenses. You won't want to spend hundreds or thousands of dollars on updates if it means that you'll lose money without a chance to recoup.
Nonetheless, taking the time to evaluate your property and identify aspects that can be updated to gain potential tenants' interest can help you make even more money on your rental in the short and long terms.
Thankfully, there are a few reliable ways that you can streamline your management process, so you don't spend valuable time on innocuous tasks. Rental management software can automate your rent collection and property management duties, so you can spend more time discovering ways to improve your property.
Get Rental Property Management Software TodaySchedule My Rent is a leading rental management platform that makes it simple for landlords to monitor their property, whether they own commercial or residential rentals. We take the tedium out of owning a rental so you can focus on the work that matters most. Call us at (844) 465-3339 for more information about our rental management software today!
Posted on Monday March 01, 2021 at 09:20PM in General
Top 10 Tax Deductions for Landlords
As a landlord, it is essential to understand the expenses you need to pay on your rental income, and the amounts you are able to deduct from your taxes. Taking advantage of the tax deductions available to you can help you reduce your tax burden, avoid overpaying, and maximize the profit of your properties. Rental real estate properties provide more tax benefits than almost any other investment you can make. In order to properly take advantage of these deduction, it is important to know what they are and how to use them.
What qualifies as an expense?There are two types of expenses you should understand: current expenses and capital expenses.
Current expensesCurrent expenses are usually items that keep your property habitable and in working condition, or help you operate your rental business. On your taxes you can deduct the entire expense if it was incurred in the same year (that’s why they are called current expenses). Generally, repairs that restore an item to its previous, working condition are deductible.
Here are some qualifications of current expenses:
- The expense must be ordinary and necessary. Ordinary expenses qualify as those that are common and generally accepted in the rental business. Necessary expenses that you can encounter are those that are deemed appropriate such as advertising, utilities, maintenance, insurance, interest, and taxes.
- They must be current. Current expenses have more of a short-term value, than a long-term value. An example of short vs long term value is fixing a hot water heater (short-term value) or replacing an appliance (long-term value). Fixing an appliance updates and adds value to the property while fixing a hot water heater restores the property back to its original condition.
- It has to be related directly to your rental activity. These expenses must be business related.
- It must be a reasonable amount. You will get audited if you report an unreasonable amount such as a $600 toilet seat.
Capital ExpensesA capital expense can be anything that increases the value or extends the life of your rental property. Anything that increases value is considered an improvement and must be capitalized and depreciated over many years. It is a good idea to deduct any capital expense that costs hundreds of dollars (or even more) to replace. Examples include new appliances and a new roof.
Keep records and stay organizedIt is essential to keep detailed and accurate records of all expenses and payments on your rental properties. It is especially important when you are claiming anything on your taxes. Documents that provide proof of what you are claiming are essential if you ever get audited. As part of Schedule My Rent’s landlord software, you are able to enter all your expenses in an organized, easy to access screen. You can enter an expense, upload an image (so you don't have to keep a shoebox full of receipts), and split the expense across multiple different units. For example, a landscaping company many mow the lawn and trim the trees across all of your 3 properties and send you one bill. You can enter the bill, upload an image, and split the total amount into separate amounts for each unit. At tax time, you can see all of the expenses, by tax category that you assign, for each unit. For more information, visit our Landlord Software.
InterestGenerally, interest is a landlord’s largest deductible expense. It is such an important deduction because you are able to deduct the interest payments on your mortgage loans that were used to acquire or improve your rental. You can’t deduct the mortgage payments themselves, but the interest deduction will save you a lot of money. Another common example of interest deductions is the interest on credit card payments. You can deduct interest on goods or services used in rental activity paid through your credit card. It is important to remember that you can only deduct interest on the money that was used on your rental business.
InsuranceYou are able to deduct premiums for almost any insurance related to your rental activity. This includes accident, causality, flood, theft, health, fire, vehicle, and landlord liability. Along with these, if you have employees involved in the management of your properties, you can deduct the cost of their workers’ compensation insurance, and their health insurance.
TravelLandlords are entitled to tax deductions for certain local and long distance travel expenses relating to their business. This means you can deduct mileage for driving done in order to manage your rental property. For example, if you drive to the rental property for a tenant complaint, or drive to a hardware store for parts to repair your property. However, you are not able to deduct the cost of driving to your properties for the purpose of improving your rental.
For long distance travel, if you don’t live near your rentals you can deduct costs of travel related to business expenses. This includes airline fares, hotels, car rentals, and 50% of meal expenses.
You have two options for deducting vehicle expenses relating to business activity. One option is to deduct your actual expenses (upkeep, repairs, gasoline). The other option is to use the standard mileage rate (check the IRS website for the current rates). In order to qualify for the standard mileage rate, you need to use it during the first year of using the car for your rental activity. If you don’t use your own vehicle, you can deduct the costs of public transportation expended for business purposes.
In order to take advantage of this deduction, it is important to carefully and precisely track your travel. The IRS closely scrutinizes travel deductions (especially those related to overnight travel).
RepairsYou are able to deduct the cost of repairs in the given tax year. Repairs are considered work that is necessary for maintaining the condition of your property, and don’t add significant value to the property. The repairs also must be ordinary, necessary, and in reasonable amounts. Examples of repairs include repainting, plastering, fixing floors, repairing gutters, fixing leaks, replacing broken windows, and air conditioning repairs. It is very important not to deduct costs that are considered improvements. Any work that adds value to the property is considered an improvement. A good general rule, is anything that is a replacement most likely will add value to the property and will not be a repair (for tax deduction purposes).
DepreciationAnother major deductible for landlords is property depreciation. There are three types of costs that you should depreciate: value of the structure (not the land), equipment/laptops/computers, and the value of improvement (appliances, windows, carpets, countertops). Some general rules are that expenses should be expected to last for longer than a year, bring value to your business, and lose its value/wear out over time. These expenses are not able to be deducted in a single year, and they must be spread out (depreciated) over multiple years.
The way in which you will depreciate an asset will depend on what the asset is. Assets such as refrigerators or buildings, will have useful lives different from other assets and could need accelerated depreciation or straight line depreciation. You are able to consult the IRS or your accountant to help determine which type of depreciation to use based on the assets and their useful lives.
Employees and Independent ContractorsWhen you hire someone to do work or perform services for you on your property, you can deduct the wages you pay them as business expenses. The worker can be a full-time employee (such as a property manager) or a part-time employee (such as an independent contractor). Independent contractors can be plumbers or electricians (anyone you hire to do work at the property).
Personal PropertyThe cost of personal property that is used in your rental activity can be deducted in one year. This deduction is possible under the de minimis safe harbor deduction and is applied for property costing up to $2,000. Personal property can include appliances (washing machine, fridge, etc.), furniture in a furnished rental, and gardening equipment.
Home OfficeIf part of your home is used exclusively as an office for your business, landlords are able to deduct their home office expenses from their taxable income. In order to claim the deduction, you must conduct the majority of your business in your home office. The amount of deduction available to you depends on the percentage of your home that the office takes up. When applying this deduction, it is essential that you properly apply it. Home office deductions are the most common type of deduction flagged by the IRS because many businesses abuse it. You should keep accurate records of the time you spend using your home office and subtract any personal usage of the space.
Pass-Through Tax DeductionPass-through tax deduction is an income tax deduction instead of a rental property-specific deduction. Most landlords qualify for this deduction established by the Tax Cuts and Jobs Act. Depending on the landlord’s income, they can deduct up to 20% of their net rental income or 2.5% of the initial cost of their rental property plus 25% of the cost they pay their employees. This deduction is set to expire after 2025.
Legal and Professional ServicesIf you need to hire a professional such as an attorney, financial advisor, accountant, or tax professional you can deduct these fees as operating expenses as long as the fees are related to work on your rental property. As a landlord you will inevitably be put in a position where you need to evict a tenant. All reasonable court and filing fees relating to the eviction of your tenant can be covered by this deduction.
Posted on Thursday February 25, 2021 at 02:44PM in General
9 Reasons Tenants Could Lose Their Security Deposit
When renting out a property to tenants, it is important to collect a security deposit before they move in. This security deposit is usually one months’ rent and is returned to the tenant under ideal circumstances. It is best to track the security deposit amount in a rental property management software like Schedule My Rent so that both the landlord and the tenant can see what the current balance is throughout the rental term. Your tenants might not always get the full security deposit back. Here are a list of common reasons why landlords will not return part or all of the tenants security deposit.
You didn’t read and understand the leaseAs with any legal agreement, it is essential that you read and understand anything that you are signing. You should go to an open house or showing of the unit before moving in. You must agree with and follow all clauses of the lease and if you do so your landlord will have fewer reasons for keeping your security deposit. Two important phrases in most leases that you should clarify with your landlord are “ordinary wear and tear” and “reasonable effort”. If your interpretations of these phrases differ, then you need to talk to your landlord about it before moving out to avoid losing your security deposit over miscommunication. It is also important to document how the unit looked before moving in to make the moving out process simpler. You can store move-in pictures in Schedule My Rent.
The lease is terminated or broken earlyBefore you move out, you need to give your landlord at least 30 days notice. If you move out before the lease ends and do not give a notice, then your landlord is able to use the security deposit to pay rent that you were financially responsible for. There are some situations in which you are not responsible for paying rent if you leave the property. There are also situations where the tenant may need to continue to pay rent until the property is leased again, for a certain number of months, or until the end of the lease. For these specific scenarios and more detail visit https://www.schedulemyrent.com/blog/.
You owe your landlord rentWhen you sign a lease, you are obligated to pay rent each month. If you do not follow through on your obligation, your landlord is able to keep a portion, or all of your security deposit to pay rent. Nonpayment is considered breaking your lease.
Damage to the propertyDamage to a property is different than normal wear and tear that is expected when living in a unit. For example, if your faucet is leaking, it is important to immediately tell your landlord in order for someone to repair it and so you can be reimbursed. If you wait, the repair can be considered longstanding and turn from a wear and tear situation into a damage that will be paid for out of your security deposit.
Normal wear and tear on a property can include tarnish on bathroom fixtures, small amounts of dirt and dust, dirty grout, or a loose handle. Damages could include multiple or large holes in the walls, missing outlet covers, broken doors/windows, large stains or holes in the carpet, missing or damaged smoke or carbon monoxide detectors, etc.
When you first move into your unit, it is important to document any existing damages that you didn’t cause. You can take photos or videos of any damages or wear and tear and a written record to protect you from liability for existing damages.
Cleaning costsIf you left your rental excessively unclean when you moved out, your landlord will be able to use a portion of your security deposit to cover cleaning costs. You are not expected to leave your unit in pristine condition, but when your landlord has to spend extra effort and money to clean up your unit for someone else to live in that you will be paying for the costs. If you leave one bag of garbage in your unit, it isn’t considered unreasonable. But if you have trash everywhere, stains in the carpet, food in the fridge, and any other unreasonable or expensive cleanups then it is considered excessive.
Unpaid utilitiesIt is important to always know the terms of your lease including any utility bills that you are responsible for paying. You should know about any fees including late payments on utilities, HOA fees, and out of date billing. If you do not pay your utility bills, you landlord is able to use your security deposit to do so.
Some landlords state in the lease that they will pay for utility bills, but not extra charges if the utilities are used excessively. If your landlord is paying for your utilities, it is easy to slip into a habit of using them unreasonably. For example if you keep the thermostat at 83 degrees and raise the electric bill by $100, then that would be considered unreasonable and your deposit could be used to pay for the extra charges.
Repairs without permissionIf you decide to make any unauthorized changes to your unit, your landlord will be able to use your security deposit to return the property to its original state. For example, if you decided to paint the unit without asking your landlord, your security deposit will cover the costs of repainting the unit back to its original color. Even if you believe it’s a great improvement, your landlord might not think the same. It is always best to ask your landlord before making repairs or improvements to your unit and only proceed if you have an approval in writing.
You left things behindWhen you move out of a unit, make sure to throw away or take everything with you. If your landlord has to throw anything away for you, the costs will come out of your security deposit.
On a larger scale, if you are guilty of property abandonment, your landlord will be able to keep all or most of your security deposit to cover any fees. Property abandonment is when you leave furniture and belongings unattended in your unit for more than 15 days. In most states, if your landlord has to pay someone to move out your furniture and clean up, the costs will be covered by your security deposit.
You didn’t do an exit inspectionAlong with your initial inspection and documentation of the property, you should meet with your landlord for an exit inspection. Provide your landlord with the initial documentation as a reference so there are no discrepancies between your landlord’s report and your observations of the unit.
Posted on Tuesday February 16, 2021 at 04:11PM in General
Tips On How To Collect Rent On Time Every Month
When managing a rental property, the task that is most time consuming is collecting late rental payments. Here are some tips on how to manage tenants who pay late and get your rent collected on time.
1. Choose responsible tenants
It is important to set criteria when selecting your potential tenants, but that criteria must be the same for all tenants. A person’s credit score is usually a good place to start to determine if your tenant is responsible with their money.
Credit score: As part of selecting a tenant, you should get an updated consumer credit report (provided by Schedule My Rent). This credit report should include past debts and eviction judgments. From this report, you will be able to see if they have been irresponsible renters in the past.
References: Another document that can help you decide if a potential tenant is responsible is their references. Their past rental experiences can indicate what they might be like as a tenant. You are always able to call their previous landlord and ask if they would rent to that tenant again (although they aren’t required to tell you anything).
Income: If the tenant doesn’t have a steady income, they might not be the best candidate for paying rent on time or at all. Their regular income should be at least three times greater than the rent due for them to be a relatively safe candidate. If they have a history of paying rent on time with past landlords then even better!
2. Collect rent online, automatically
Collecting rent online is a reliable way to help your tenants pay their rent on time. With Schedule My Rent, you can set up reminders for tenants when the due date for rent is approaching, AutoPay to automatically transfer their rent to your account, and late fees that can be automatically added to a tenant’s rent.
When collecting a tenant’s rent online, it is important to use a site designed for rent collection like Schedule My Rent instead of other sites like Venmo, Zelle, and PayPal. Schedule My Rent has a unique landlord dashboard that allows the landlord to view all their properties at once (or select specific ones) and know at a glance who has and hasn’t paid their rent.
Schedule My Rent also gives tenants the unique opportunity to pay in cash. With MoneyGram, tenants can go into a Walmart, CVS, or other MoneyGram location and pay their rent. The landlord will be notified of the amount that was paid, leaving a receipt for the payment. MoneyGram is much more reliable and simple for landlords and tenants than meeting to pay with cash or mailing a check.
3. Communicate with your tenants
Communication about rent with your tenants is essential. Your tenants should know what amount they need to pay every month, where they can pay, what forms of payment you accept, when they need to get their rent in, and any consequences for late rent payments.
If your tenant pays their rent late, ask them: When do you expect to make your rent payment? What amount will you pay? What source of income will you use for your rent payment? What method of payment will you use?
If your tenant has trouble answering these questions or starts to get defensive, it might be time to consider beginning the eviction process. In these situations it is always important to act professional, so don’t cut off your tenant’s utilities or threaten them in any way. These actions won’t be tolerated by a judge in an eviction hearing.
If you have a reliable renter who doesn’t pay on time once, you can consider letting it slide. But in general it is important to set firm expectations for your tenants and let them know what you expect.
4. Appreciate your responsible tenants
As a landlord, it can be easy to get caught up in preventing late payments and other unwanted situations. It is important to appreciate the tenants who consistently pay on time, take good care of your unit, and abide by your rules. Let them know you appreciate them!