Provided by Avail
Knowing how to be a good landlord requires extensive knowledge of renting, as well as the right tools to make the process easier. But if you’re a first-time landlord, managing both a rental property and tenants can easily be overwhelming if you’re not sure where to start.
To help you become a successful landlord, we share expert tips on landlording to help you manage your first property, as well as resources to take advantage of right away.
9 Landlord Tips for First-Time Landlords
As a first-time landlord, it’s important to know the basics of managing a rental property for an overall positive experience. From tools to have on hand to best practices to keep in mind, we outline nine tips to consider when being a landlord for the first time:
1. Utilize a Property Management Software Platform
Managing a rental comes with tons of responsibilities, all of which can be time-consuming without a property manager. Luckily for you, property management software platforms have streamlined the process of advertising your rental, finding quality tenants, screening them, collecting rent, and more.
Avail (part of Realtor.com®) offers free rental property management software that helps landlords easily manage their rental online, hassle-free. You can create a free landlord account to set up your tenants, collect rent online, track rental property accounting, as well as explore an extensive library of educational content on landlording. Avail is free for unlimited units, but you have the option to upgrade to Unlimited Plus for $9/unit per month to create custom leases or a website for your rental business.
Plus, you can earn up to $500 in account credit with the Avail Referral Program by inviting 10 fellow landlords to Avail to create an account. Get started today by creating a free account in less than five minutes.
2. Determine a Fair Rent Price
Your rent price will determine whether or not a tenant will be interested in renting your property. Although protecting your investment is the first priority, it’s important to determine a fair market rent based on other rentals in your designated area. This ensures you find tenants that can afford to rent your apartment and reduces the chance of long vacancy periods.
To complete this step, you can research local properties with similar features for their rent price or invest in an Avail Rent Analysis report that shows how your rental compares to similar properties in your area, as well as rental benchmarks from the lowest to the highest rent.
Once you’ve established a rent price that you’re comfortable with, then you can begin advertising your rental property online to find potential tenants.
3. Find Quality Tenants
In order to find quality tenants, you’ll need to advertise your rental property across various websites to generate rental leads. Since most tenants search for their next apartment online, it’s important to find landlord software that syndicates your rental listing across more than one site to get your property in front of tenants.
When advertising your rental listing on Avail, your listing is syndicated out to Zillow, Trulia, HotPads, Zumper, Apartments.com, Realtor.com®, PadMapper, Apartment List, Walk Score, and Doorsteps all at once. You can also manage any generated leads directly through your landlord dashboard for less back-and-forth communication.
You’ll want to describe the unit in a few sentences with the address and set rent price, as well as take accurate and eye-catching pictures of the property.
4. Screen Potential Tenants
Once enough qualified leads have been generated, you’ll want to begin the tenant screening process. In addition to having tenants complete an online rental application, it’s best practice to include credit, background, and eviction checks to get factual information on who they are. However, some states put limitations on how much landlords can screen potential tenants, so you’ll want to do some research on local landlord-tenant laws before adding this to your application.
An Avail online rental application allows landlords to include custom questions, as well as advanced reporting such as a TransUnion credit report and background check for a one-time fee. Instead of paying out-of-pocket for the cost of screening a tenant, the cost can be offset to the applicant.
5. Create an Online Rental Lease
As a first-time landlord, it’s important to put together a rental lease agreement that complies with local ordinances and is reviewed by a lawyer before sharing with tenants. Not only does this ensure it’s a legally-binding agreement, but protects all the parties involved.
The lease agreement should include the monthly rent amount, security deposit amount, terms of lease, and clauses that protect both the landlord and tenant. Many of these clauses and disclosures will be dictated by the standard lease within your city, but it is a good idea to make sure the lease fits the needs of your rental, as well.
With Avail, landlords can easily create a lawyer-approved lease agreement for free or upgrade to Unlimited Plus to create a customized lease that can be cloned for later use. The lease agreement can be signed online for free and is stored in each parties’ dashboard to reference in the future.
6. Share a Move-In Checklist
Your rental property should be habitable and clean before moving in new tenants. To help document the condition of your property before and after they move in, you can use a downloadable move-in checklist to access on any device.
Tenants should be notified on how garbage, laundry, and newspaper delivery work in the area, along with any other amenities that the building or property provides. The more thorough you are with explaining the starting conditions of your unit, the less surprises you’ll have at the end of the lease.
7. Contract Your Contractors
If you’re not a handyman yourself, you’re going to need help handling maintenance at some point. If you don’t know of any good contractors in the area, try to find local contractors that can quickly and efficiently handle repairs for you. .
Talk to friends and family about finding a contractor, and look up contractors in your area online. Compare and contrast different options when hiring a contractor as this could become a good long-term relationship, so don’t be afraid to spend some time looking around.
Make sure to get referrals, proof that the contractor is insured, and a guarantee on the work. Allow your tenants to submit maintenance tickets online, so you can record issues, store photos, and communicate with your tenant online.
8. Manage Your Rental Income
Being a landlord is equivalent to owning your own business, even if you’re only managing one unit. If you treat it as a business, you’ll have the right frame of mind when making decisions.
As a first-time landlord, it’s advised to manage any income you’re generating from the rental in a separate bank account than your personal account. Not only will you need to store a tenant’s security deposit separately, but you’ll need a platform that can help you collect rent online and manage any other fees tenants are responsible for covering. Avail allows you to easily track payments for all your properties online, which can later be accessed during tax season.
9. Invest in Landlord Insurance
Just like tenants have renters insurance to protect their belongings, it’s important to invest in landlord insurance to protect you from property damage, loss of income, and liability. Landlord insurance premiums can cost anywhere from $800 to $1,200 annually, depending on the type of coverage you want.
Manage Your Rental With Avail
Becoming a first-time landlord is an exciting venture to take on and is less daunting than you think. Now that you know how to be a landlord with the tips we’ve shared, the next step is managing your rental with confidence by using landlord software like Avail.
Create an account to begin the process of managing your rental property like a seasoned professional.
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By Ryan Squires
When setting the rental rate for a rental property or looking for a new place, landlords and tenants frequently ask: “Are landlords required to pay for water and garbage?”
Typically, landlords aren’t required to pay for these utilities. However, different states and cities have their own laws dictating what utilities a landlord may be required to pay for, so it’s critical to understand the rules governing the area where you operate your business. And for tenants, finding properties that cover, or at least partially cover, utilities can sweeten the deal.
Our comprehensive guide examines whether landlords are required to pay for water and garbage.
Key Insights
- Are landlords required to pay for water and garbage? In most cases nationwide, landlords are not responsible for paying these utilities.
- Some localities, including New York City, require landlords to cover water and garbage collection. Always check your local laws to understand your responsibilities as a landlord or tenant.
- The property type often dictates who pays for what.
- TurboTenant has state-specific leases from all fifty states and a robust maintenance and repair tracking system so landlords and tenants can communicate clearly about any issues that may arise.
Understanding Landlord Responsibilities for Utilities
Most landlord-tenant disputes regarding utility bills occur when the lease agreement contains ambiguities. This often comes up when no clear language specifically dictates who is and isn’t responsible for each utility, including electricity, phone and internet, water, garbage, sewer, and anything else that could qualify as a utility.
However, a few other things might arise while renting a home that might raise questions for either the landlord or the tenant.
Utility Usage and Fairness
In multi-unit buildings where tenants split the cost of the utilities, a dispute could occur regarding each tenant’s responsibility. For instance, if one unit uses an extraordinary amount of electricity compared to others, a landlord could require the offending unit to cover a high portion of the bill to maintain fairness among all renters. This solution isn’t allowed everywhere, so check your lease and local laws to see if you live in an area where this kind of dispute could arise.
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Maintenance and Repairs
In certain instances, a tenant could claim that a landlord should be responsible for a portion of a utility bill if regular upkeep and maintenance are lacking and the cost of using the utility increases because of it. Additionally, outdated appliances or other features in a unit could also increase utility costs, and a landlord might be responsible for addressing the issue or could offer to cover a portion of the related utility.
In all cases, tenants and landlords should keep detailed records of any dispute, and tenants should always continue paying rent in accordance with the rental agreement terms so that a minor dispute doesn’t become a larger one.
How TurboTenant Can Help with Utility Management
So, are landlords required to pay for water and garbage? As you’ve seen above, the answer can get a little complicated. In most cases, no, but there are situations where landlords may be required to cover certain utilities.
TurboTenant can help.
As part of TurboTenant’s all-in-one property management software, landlords can create iron-clad lease agreements demonstrating who is responsible for paying what and when. And with rental maintenance management, tenants can quickly spot a leaky faucet, create a maintenance request from their smartphone, and get the water bill under control.
TurboTenant makes solutions for renting and managing property for the modern age. Sign up for a free account today or invite your landlord to check it out and see how TurboTenant makes life easier for renters and landlords.
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We all pay someone to do work for us at some point or another. But did you know that how you classify those funds paid (code and book that payment accounting wise), can determine if you think they are a 1099 worker or a W-2 employee?
This week on Your Landlord Resource we are discussing the two rules that the Federal government and potentially your state government use to determine the difference between the two.
It’s a short episode that’s packed with a lot of good info to keep your business out of trouble in case you are ever audited…and we are seeing a lot of people we know go through this right now and its NO FUN!
LINKS
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👉 US Department of Labor: Myths About Classifications of Employees as Independent Contractors
👉 Course Waitlist: From Marketing to Move In, Place Your Ideal Tenant
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When you start them early enough, your investments can perform shocking feats of strength. They can even keep pace with the runaway cost of college tuition—which has more than doubled since 2000. The average cost of private college tuition and fees has reached $38,768, according to the Education Data Initiative, and you can expect that to keep skyrocketing between now and when your little one reaches college age.
Fortunately, real estate can help. Try these creative approaches to paying for your kids’ college education so you can stop worrying and start getting excited about your children’s university years.
1. Let Your Tenants Pay for Tuition
Imagine that the year your child is born, you buy a rental property for $360,000 and put down 20% on it. You borrow the rest ($300,000) with a 30-year mortgage at 6% interest.
After 18 years, you now have $554,870 in equity. That’s a tidy sum to pay for tuition, hopefully with plenty left over to go toward your retirement.
Your tenants have paid down your mortgage balance even as your property has appreciated in value. I assumed a 4% annual appreciation rate. For context, U.S. home prices appreciated an average of 4.8% annually from 1987-2023.
Oh, and that says nothing of your cash flow. Your rents have risen alongside inflation, even as your mortgage payments remained fixed. Your rental property should be paying a princely sum each month by now. It probably cash flows so well that you won’t want to sell or refinance it.
If you want to get even more aggressive with paying down your loan balance, you could buy with a 15-year mortgage. Just beware that your cash flow will take a hit.
2. BRRRR: One Down Payment to Rule Them All
If you wanted to get more aggressive with your rental strategy, you could follow the BRRRR strategy (buy, renovate, rent, refinance, repeat). The idea is that you force equity through renovation, then refinance to pull your initial down payment back out.
In the example, you still had to plop down $60,000 plus closing costs—no trivial amount. Imagine instead that you buy that property’s run-down neighbor for $240,000, put $50,000 into renovating it, and borrow the same $300,000 mortgage.
You end up with all the same long-term numbers for appreciation and rental cash flow. But now you don’t have a penny tied up in the property. You can reinvest that money in stocks, syndications, or more rental properties.
In fact, you could repeat the same BRRRR process indefinitely to generate infinite returns. Because there’s technically no limit on how many times you can recycle and reinvest the same capital, there’s technically no limit on your returns.
3. Infinite Returns on Real Estate Syndications
The BRRRR strategy comes with a huge drawback: It requires a lot of labor. Sure, you can get your money back out of each property, but your time? That’s gone forever as a less visible but no less real part of your investment in each property.
Some passive real estate syndications follow a similar strategy, just on a far larger scale. A syndicator buys a dilapidated apartment complex, renovates and repositions it as a higher-end property, and leases the units for much higher rents. They then refinance it and return passive investors’ initial capital—but all the passive investors retain their ownership interest.
In other words, you and I get our money back, which we can reinvest elsewhere. But we also keep collecting cash flow from the original property.
Many syndications target annualized returns in the mid-teens or higher. “Uh, don’t most syndications require a minimum investment of $50,000-$100,000?”
They do indeed—if you invest by yourself. That’s why I don’t. Our Co-Investing Club meets every month to vet deals together, and members (including me) can go in on them together with $5,000 or more. I use it as a form of dollar-cost averaging, a way to consistently invest more manageable amounts each month in high-performance real estate investments.
And the math shifts even more to your favor when you get your principal back to reinvest again and again. But that’s messier to project forward into the future, so we’ll leave the graph at the standard compounding rate.
Besides, we invest in other types of passive real estate investments, such as private partnerships, private notes, debt funds, and more. Infinite returns sound great on paper, but I’m more interested in finding asymmetric returns.
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4. Flip Houses with Your Teens
As your kids get closer to college, you can involve them in paying for their own higher education.
Flip a few houses with them. The profits from each house you flip could cover the cost of tuition for a year or more.
Even better, your teen will learn real-life skills such as forecasting ROI, negotiating, budgeting for projects, managing contractors, navigating bureaucracy such as permits and inspectors, and home improvement.
And maybe they’ll actually show up for those 8 a.m. classes if they helped pay for them by swinging a hammer and sweating all summer.
5. Kiddie Condo House Hacking
It turns out there’s a loophole for owner-occupied mortgage financing: Your adult children can satisfy the occupancy requirement.
That means you can buy student housing for them and their roommates with a primary residence loan. And their roommates can cover the mortgage payment for you, removing the need for either you or your child to pay for housing.
Again, your kids can learn some real-life skills, such as property management. Just make sure you only partner with them if you can trust them to manage an asset worth hundreds of thousands of dollars.
When they graduate, you can decide whether to keep the property as a rental or sell it and hopefully walk away with some profits.
6. Roth IRA Real Estate Investments
Roth IRAs offer more flexibility than any other retirement account. You can withdraw contributions at any time, penalty- and tax-free. You can even withdraw earnings early if you put them toward qualified education expenses, such as:
- Tuition and fees
- Books and other school supplies
- Equipment required for attendance
- The cost of special needs related to attendance
Imagine you invest in passive real estate investments for those 15% returns in the chart through a self-directed IRA. After 18 years, you decide you have enough to spare to help your kids with tuition—and so you do, tax-free.
Just make sure you actually can spare it. Your kids have dozens of ways to pay for college. You only have one way to pay for retirement.
Look Into Creative Combinations of Real Estate Investments
You can mix and match all these strategies, like Lego sets, to build an education fund. And these are just the tip of the proverbial iceberg.
Have you considered house hacking your own residence? You don’t necessarily need to move into a multifamily or bring in a housemate—my cofounder at SparkRental and her husband hosted a foreign exchange student, and the stipend covered most of their mortgage payment. Or you could add an ADU. Or you could rent out some or all of your home as a short-term rental, perhaps even when you’re not using it.
As mentioned, it helps if your kids have some skin in the game. Make them contribute in some way and make your help contingent upon performance. That could mean a minimum GPA or some other metric to make sure they don’t take your help for granted.
Get creative with paying for college with real estate. It doesn’t have to take a huge bite out of your net worth, but it does require advanced planning, thoughtful strategizing, and clean execution.
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Written by Amanda Walker
ezLandlordForms, a leading provider of property management solutions, is proud to announce the launch of its new Rent Payments feature. This new feature is designed to streamline rent transactions for landlords and tenants. It revolutionizes the rental management experience with industry-leading convenience, security, and efficiency.
Key Features and Benefits:
- Convenience: Landlords and tenants can now send and receive rent payments anytime, anywhere, with just a few clicks.
- Security: Advanced security protocols ensure that all transactions are safe and secure.
- Efficiency: Automated processes allow landlords and tenants to spend less time paying and processing rent while also minimizing errors.
“We are thrilled to introduce the Rent Payments feature, which marks a significant step forward in our commitment to providing comprehensive and user-friendly property management solutions,” said Kevin Kiene, President of ezLandlordForms. “This new feature will greatly enhance the rental management process, making it easier and more secure for our users to handle rent transactions.”
The launch of the Rent Payments feature is a natural next step for ezLandlordForms as it consistently strives to innovate and provide exceptional value to its customers. By integrating this feature into its platform, ezLandlordForms will be able to provide a more seamless rental experience for Landlords and Tenants and further support landlords through every phase of the rental process.
For more information about the Rent Payments feature and other services offered by ezLandlordForms, please visit ezLandlordForms.com.
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About ezLandlordForms
ezLandlordForms is a premier provider of property management solutions, offering a comprehensive suite of tools and resources designed to help landlords manage their properties efficiently and effectively.
Our services include tenant screening, state-specific lease agreements with ezSign, over 500 landlord forms, and the newly launched rent payments feature. ezLandlordForms is among the select few companies that excel in all three critical areas of property management. With a focus on innovation and customer satisfaction, we continue to lead the industry in delivering high-quality, user-friendly solutions.
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By Ryan Squires
Dealing with delinquent tenants who don’t pay rent on time is one of the most difficult aspects of property management. Tracking down late rent is time-consuming, receiving payments can take months, and it might require a long legal battle.
Reporting these tenants to a credit bureau can help show other landlords that they’re inconsistent with rent payments and help them avoid future headaches. While this process is an option for some landlords, it’s complicated and not an option for everyone. In this blog, we’ll break down everything you need to know about how to report unpaid rent to credit bureaus and other ways landlords can attempt to collect unpaid rent.
How to Report Unpaid Rent to Credit Bureaus
Landlords can leverage credit reporting as a tool to encourage timely rent payments. However, direct reporting to credit bureaus is typically reserved for large landlords who process numerous rental payments monthly. Smaller landlords may find it challenging due to the need for a merchant account.
An alternative for smaller landlords is Experian’s RentBureau. This service allows landlords to automatically deduct rent from tenants’ bank accounts and report payment history to Experian. However, tenants must opt-in, and the service doesn’t cover other tenant behaviors like evictions or property damage.
Alternate Options to Collect Unpaid Rent
Reporting late rent payments to a credit bureau isn’t an option for every landlord, so what alternatives do you have? Here are a few options for landlords who need to collect unpaid rent.
Eviction
Eviction is often the most effective way to recoup unpaid rent, but it can take the longest. The eviction process varies by state but generally involves filing a formal eviction notice with the court. If the tenant doesn’t vacate the property within a specified timeframe, a court order is issued, and law enforcement can remove the tenant.
Evictions are also typically reported to credit bureaus, which impacts a tenant’s credit score and demonstrates to other landlords that the tenant might not be reliable.
Collections Agencies
Hiring a collections agency can be a viable option for recovering unpaid rent. These agencies specialize in debt collection and have the resources to pursue delinquent tenants. Keep in mind that there’s usually a fee associated with using a collections agency, and they typically receive a percentage of the recovered amount.
Rent Reporting Services
Another avenue to explore is rent reporting. While not a direct collection method, it can incentivize tenants to pay rent on time. Some companies specialize in reporting rental payment history to credit bureaus.
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Consequences for Tenants
Reporting unpaid rent to a credit bureau can have significant consequences for tenants. A negative rental payment history can:
- Lower their credit score: This can impact their ability to secure loans, credit cards, or even housing.
- Make finding future housing difficult: Many landlords use credit reports as part of their tenant screening process.
- Result in increased rental costs: Tenants with poor credit may be required to pay higher security deposits or increased rent.
Tenants must understand the importance of timely rent payments and their potential impact on their financial well-being.
How TurboTenant Can Assist Landlords
Reporting unpaid rent to credit bureaus can be an effective tool for landlords to encourage timely rent payments and mitigate financial losses. However, it’s a complex process that might only be an option for some landlords. So, it’s essential to prioritize direct communication with tenants and explore alternative solutions.
TurboTenant offers multiple features designed to make rent payments easier. With TurboTenant, landlords and tenants can:
- Easily make online rent payments from any device.
- Automatically report on-time rent payments to build tenant credit.
- Distribute automatic rent receipts to tenants for accurate record-keeping.
- Send automatic rent reminders to reduce late payments.
- Set up autopay and eliminate late rent payments.
Sign up for a TurboTenant account today to streamline the rent collection process. All the rent collection features are free and give you a cost-effective way to battle late payments before you’re forced to consider reporting unpaid rent.
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As we approach the end of the year, it’s crucial for small landlords to get a clear picture of their rental property’s financial health. QuickBooks is a powerful tool that simplifies financial management for landlords, especially those who own fewer than 10 units. In this post, we’ll explain how you can use QuickBooks to organize your finances, track rental income, and prepare for tax season.
Your Landlord Resource is here to walk you through the best ways to use QuickBooks to ensure your rental business is ready for the end of the year.
Why Landlords Should Use QuickBooks
Managing a rental property business can get complicated quickly. Small landlords, especially those owning 1–10 units, need a system that can manage rent payments, track property expenses, and simplify tax preparation. QuickBooks does just that by offering:
- Expense and income tracking for each property
- Comprehensive financial reporting to give a clear business overview
- Tax preparation tools, such as categorizing deductible expenses
- Tenant management features to track rent payments easily
For small landlords who want to manage their rental properties like a professional, QuickBooks is a must-have tool.
Setting Up QuickBooks for Your Rental Property Business
To get the most out of QuickBooks, make sure you set it up properly. Here’s a quick guide for landlords looking to streamline their rental property finances:
1. Create Separate Accounts for Each Rental Property
If you own multiple rental properties, track each unit separately. QuickBooks allows landlords to set up different “Classes” or “Locations” to organize income and expenses by property. This is especially useful when comparing performance or preparing reports for individual properties.
2. Link Your Bank Accounts for Automatic Transaction Imports
QuickBooks integrates with your bank accounts, making it easier to track expenses like mortgage payments, utilities, and maintenance costs. You can save time by avoiding manual entries, and your accounts will always be up to date.
3. Track Rental Payments Automatically
You can set up recurring rent invoices for each tenant in QuickBooks, which makes it easy to send payment reminders and track who has paid and who hasn’t. This is essential for keeping cash flow steady and minimizing late payments.
QuickBooks Year-End Reporting for Landlords
As the year comes to a close, QuickBooks provides key reports that every landlord should run to prepare for tax season:
1. Profit and Loss (P&L) Statements
A P&L statement gives you an overview of how your rental properties performed during the year. QuickBooks makes it easy to generate this report, which is crucial for understanding your revenue and operating expenses.
2. Tax Summary Report
QuickBooks helps landlords prepare for tax season by automatically categorizing deductible expenses, such as property repairs, insurance, and utilities. You can easily generate a tax summary report that highlights all eligible deductions.
3. Prepare 1099 Forms for Contractors
If you’ve hired contractors to perform repairs or maintenance on your rental properties, QuickBooks helps you track payments and generate 1099 forms for tax purposes. This feature ensures you comply with IRS regulations and simplifies the process.
Why QuickBooks Simplifies Tax Preparation for Landlords
For landlords, tax season can be daunting without proper financial organization. QuickBooks provides several tools to help you prepare for taxes:
- Expense categorization: Automatically sorts expenses to make tax filing easier.
- Receipt storage: The QuickBooks mobile app lets you snap photos of receipts and store them digitally, making year-end documentation simple.
- Accountant collaboration: QuickBooks allows you to share your financial data directly with your CPA, ensuring they have everything needed to file your taxes accurately.
Conclusion: Get Organized Before the Year Ends with QuickBooks
QuickBooks is an invaluable tool for landlords, helping you organize your rental business finances, streamline operations, and prepare for tax season. By implementing QuickBooks now, you can ensure your rental property business is ready to close out the year with ease.
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It’s that time of year where the leaves start falling, and there’s a nip in the air each morning and evening. Time to put away the tank tops and pull out the sweaters! For landlords, Fall is the time of year for seasonal maintenance on their rental properties. Here are some reminders on what you or your property manager should be checking out as preventative maintenance…
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Tenant screening software is becoming more and more popular now that landlords are working to improve their applicant vetting processes.
In this episode, we will cover what tenant screening software is, why it matters, and how it compares to other options like using property management software or hiring a property manager.
We’ll also cover a couple real-life horror stories about tenant screening gone wrong and the legal liabilities landlords need to be aware of.
So, whether you’re using screening software or not, by knowing the risks, the best practices, and the best tools can make or break your rental business.
Of course, we will also compare some of the top software options out there.
LINKS
👉 Episode 49: Analyzing Credit Reports for Tenant Selection
👉 Our FREE Landlord Verification Form
👉 SmartMove Tenant Screening Software
👉 Tenant Alert, Tenant Screening Software
👉 RentPrep Tenant Screening Software
👉 My Rental Tenant Screening Software
👉 The Top 5 Prescreening Questions We Always Ask and WHY
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Source: Landlord Gurus
Before you get down to marketing your rental you need to decide on some basic rental terms you’ll be asking a renter to agree to. Below is a brief rundown.
Each property is different, so you’ll want to make sure you think carefully about what will work best in your case. Here are some common rental terms:
- 1-year lease
- Something shorter than a year, like for student housing
- Month-to-month
Something else to think about is whether the tenancy ends at the end of the term. For example, if it’s a one-year lease, at the end of the year, is the tenancy over or will it automatically revert to month-to-month?
Animals
Do you accept pets at all, and if so what kind and how many? For example, some of our properties will allow cats but not dogs.
Be careful not to lump Service Animals and Emotional Support Animals into your “pet policy”, as they are NOT considered pets and there are strict rules about what you can and cannot do when people have them.
If you do allow pets, consider the different types of pet fees and things you might need to ask for. For example, charging for pet screening, pet deposits, and pet rent. Are you going to charge a flat fee for having a pet? Or will you charge monthly?
Setting the Rent
You can quickly survey listings on Zillow, Craigslist, etc. to get a feel for how the competition is priced. Many property management software products also have free rent estimation features. You could also use products that give you comparables, trend lines for local rent, and pricing suggestions.
Utilities
You’re also going to want to decide how you and your tenant will handle utilities.
Which utilities can tenants put directly in their names? Generally, these should be metered separately so that they are only paying for what they use, but sometimes there are exceptions or tradeoffs.
Where not separately metered there are multiple ways to charge tenants for utility costs:
- RUBS: Ratio Utility Billing System — charging tenants for actual utility expenditures, usually calculated based on square footage or occupancy.
- Submeters
- Flat fees: For example, $40/person/month for water, sewer, and garbage.
WiFi
Will you provide WiFi for the property, or do tenants pay for their own service? Consider whether your building is wired in such a way that tenants can get their own service easily, and without a bunch of new holes being drilled.
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Parking
Will parking be included, or is it an extra fee? Some places, like Seattle, require parking to be separate.
Deposits and Fees
Consider whether you want to separate deposits for different purposes, or use one umbrella security deposit. We often just take one general security deposit. Note that there are requirements in some places regarding how you handle the money.
A security deposit is generally fully refundable but can be used for unpaid rent or fees, repairs, cleaning, or other amounts due.
Another type of deposit is a cleaning deposit, which tenants pre-pay for having the unit cleaned at move-out. They don’t need to deep clean anything at the end. This is a good way to handle concerns regarding cleanliness and having to hire cleaners without compensation.
Going back to pet deposits and fees, decide whether you want to collect a fee that’s not refundable. This can be used for services at the end of the tenancy to prepare your rental after having a pet in it.
Next is application fees. Nowadays, screening services will collect a fee, which makes it easy, as you don’t have to worry about collecting or refunding fees.
There are also some miscellaneous fees for things like storage or locker fees. If you have those amenities on your property, that’s something you can charge for. Amenity fees are something that we have seen at larger, nicer complexes. They might tack on a fee because they have a nice fitness center or other amenities that tenants can use.
Another thing that we charge for is a lockout or lost key fee. If the tenant does not want to pay that fee, they can instead hire a locksmith to let them into the property.
There will also be move-in costs. When the tenant first moves in, what will they have to pay upfront? Usually, it’s the first month’s rent and possibly the last month’s rent that you’ll collect upfront. Along with any of the deposits you choose to charge. In some places, there are regulations on how much you can collect.
Takeaway
Before marketing your property, be sure to decide on the things you’ll need to communicate upfront. This includes the things that we went over in this article, such as animals, rent, deposits, and fees. This will ensure that prospective tenants understand what they’ll be getting themselves into.
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By Ryan Squires
Ideally, the landlord-tenant relationship is built on great communication, timely issue resolution, and prompt rent payments. Although most tenants pay their rent as they’re supposed to, it can be stressful for landlords when days go by without a check or a promise to pay.
So, how can you ensure timely payments without pestering your tenants endlessly? How can you maintain a solid working relationship with your tenants so they understand the importance of timely payments? And how can you make sure that you maintain a solid foundation for your investment and properly anticipate your cash flow?
In this rent reminder guide, we’ll review some strategies for landlords and tenants to ensure timely rent payments.
Key Insights
- Understanding when rent payments are expected is a key component in understanding the cash flow of a landlord’s investment. It can dramatically impact maintenance schedules, property tax payments, and other property expenses.
- Rent reminders can be sent in various ways, including email, text messages, and push notifications. They should be polite, clear, and to the point.
- TurboTenant is a free-to-use property management platform that offers multiple ways to remind tenants to pay rent on time, regardless of how many properties they manage.
Understanding the Importance of Timely Rent Payments
Renting out property is an investment; receiving rent payments is critical to ensuring a return. Whether you own and lease out one or multiple properties, fully understanding your cash flow is crucial to effectively running your business.
For landlords, rent payments past their due date can lead to delayed maintenance, deficient cash flow, and a chain of potentially delayed payments for other property expenses, including property taxes, utilities, or other costs incurred from owning and renting a unit.
Late payments are generally subject to the lease terms for tenants, which can lead to late payment penalties and, eventually, potential legal consequences like eviction.
How to Set Up Rent Reminders
As a property manager, developing smart strategies to remind tenants to pay rent, ensure timely payments, and build a strong relationship with your tenants is essential. One way to set up a rent reminder is to utilize property management software like TurboTenant.
Many rent collection platforms offer the ability to automatically remind tenants through push notifications, text messages, or emails every month before rent is due. These methods are beneficial because they shift the conflict associated with asking for late rent to software. Now, you don’t have to be the bad guy.
Landlords can also offer auto payment options for tenants, where rent is automatically deducted monthly from the payment method of a landlord or tenant’s choice. This is a great way to ensure that rent is always on time.
Best Practices for Rent Reminders
Creating an effective rent reminder process is a great idea, especially for landlords who manage a large number of properties, where it can become challenging to keep track of each tenant.
In general, reminder messages should be concise, clear, and to the point, which helps set clear expectations. Here are some tips and best practices to help make the process as easy as possible for all parties.
Clear Communication from Day One
The best way to establish a positive landlord-tenant relationship is to ensure that the tenant thoroughly understands the expectations set out in the lease agreement. Explaining rent collection due dates, grace periods, and payment methods will smooth the process.
Use Multiple Reminder Channels
Not everyone is great at checking their email these days, so landlords might opt to send a rent reminder notice by text message, push notification from property management software, or even a quick phone call to check-in.
Send a Quick Thank You
Confirming receipt of rent payments and thanking tenants for paying on time is also a great way to make sure the tenant feels like a part of the rental process and not just a cog in a faceless business transaction. A quick “thank you” takes no time at all and can help build trust and a solid relationship foundation.
Sample Rent Reminder Messages
Keeping open lines of communication with your tenants is a great way to make sure they pay their rent on time. It also establishes a positive relationship that encourages tenants to stay in touch about maintenance or repair issues.
Here’s an example of a rent reminder email:
Hi [Tenant],
Just a quick reminder that your rent for next month is due on [Due Date]. Please make sure your payment is made on time to avoid any late fees. As a reminder, you can make your payment via [Option 1], [Option 2], or [Option 3].
If you have any questions or need assistance, please don’t hesitate to contact me at [Phone / Email].
Thank you,
[Landlord name]
And here’s a rent reminder text message sample:
Hi [Tenant], this is [Landlord] reminding you that rent for your unit is due on [Due Date]. Please make your payment by this date to avoid any late fees via [Option 1], [Option 2], or [Option 3]. Thanks, and have a great day!
Rent reminders through push notifications are usually even shorter than text messages and are straight to the point:
Hi [Tenant]. Rent is due on [Due Date]. Please let me know if you have any questions.
A landlords one stop shop for tenant management…for FREE
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Dealing with Frequent Late Payments
Frequent late payments from a tenant can be challenging for landlords and potentially disastrous for tenants. So, what’s the best way to handle habitually late rent payments?
Understanding the root cause of late payments is the first step in determining a course of action. If tenants are experiencing temporary financial hardships, figuring out how to navigate it together could resolve the issue quicker than expected or encourage the tenant to find other ways to pay rent on time. Meeting with the tenant to go over the lease agreement and reinforce the terms in the lease could also help the tenant understand what’s at stake for them if they continue to pay rent later than the due date or an outlined grace period. Making sure they have their own copy of the lease guarantees they have a copy to reference.
For tenants experiencing hardship and frequently paying rent late, establishing a payment plan could also help ease the burden and quickly bring the tenant back into good standing. Any plan like this should be put into writing and signed by both parties and can be kept alongside the lease agreement for easy reference.
Legal proceedings could be the next step if the frequency of late payments increases to unsustainable levels. At this point, landlords might need to begin an eviction process and should consult local laws about how best to proceed in this situation.
How TurboTenant Can Help with Rent Reminders
TurboTenant’s free landlord software provides access to a comprehensive rent collection system that sends automatic reminders, applies late fees, and sends receipts automatically. There’s zero cost to landlords, and tenants pay a small $2 ACH fee in the free plan. That fee is waived when landlords upgrade to Premium.
Then, via TurboTenant’s integration with REI Hub, our robust rental accounting system automatically inputs rent payments, tracks expenses, and compiles it all in easy-to-generate reports that make tax time easier than ever. It’s an excellent tool for landlords who want to automate as much of their processes as possible to save time and increase accuracy.
Sign up for a free TurboTenant account today, and let us be the bad guy when your tenant needs a rent payment reminder.
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