Managing rental properties takes time and an eye for detail. If you want to ensure your rental business becomes more profitable, tracking and efficiency are key.
As a beginner, you may be able to efficiently manage your rental properties with a notebook, pen, and calculator. But when you get busy and/or start scaling, there are better ways to handle your management responsibilities. As you manage more investments, it becomes more clear that a management infrastructure is necessary and has to be budgeted for.
If you want to become more efficient, technology offers you a way to simplify every step. Rental property management software was made with your needs in mind.
Rental property management software is designed to make every step of the management process easier. Well-made software will have a function that makes it easy to track your finances, tax compliance, and maintenance.
Benefits Of Rental Management Software
Rental property management software saves you time and space.
It saves you time by allowing you to record and track all the information you need on a single device. That means no more paperwork and no more managing folders with all your records on your desktop. You can use a single software to store all your information.
You can also save a lot of time with management software. The user interfaces of rental property management and accounting software and apps are designed to be easy to use and navigate. They are meant to replace desktop and office folders while giving you the tools to perform management tasks quickly. Less time looking around and more time just recording the data you need so you can look for new deals and perform other higher-impact tasks. Rental management software can make the following tasks far easier.
Every quality rental management software will have a rent management feature. These features enable you to monitor past and upcoming rent payments. This makes rent collection simpler and allows you to focus more on scaling your business. It removes the stress of constantly trying to remember payment dates or physically knocking on doors to manually collect rent. Tenants can easily pay electronically by linking their bank or pay with credit cards as well as enroll in automatic payments. Not all software is created equal but this is one key feature you want to definitely look for when considering software products.
If you want to use software for rent management, make sure the software you choose separates properties and tenants. The best rent management software allows you to navigate easily and make sure you don’t credit your payments to the wrong tenants or properties.
Managing Expenses & Tracking Finances
Managing how high your income is compared to your expenses is a crucial aspect of managing rentals. That’s why rental management software makes it simple to allocate funds for each rental unit and track each units’ expenses from a single device.
Tracking each property’s expenses on your own is tedious. Landlords can fail to keep track of how much they’re spending on each rental property over time. But with the help of software, you can always see exactly how much you’ve spent over a period which you specify. Some software products will also offer you appealing visual graphs and dashboards comparing income and expenses.
To take it a step further, you can choose an app or program that breaks down your expenses into different categories. Knowing exactly what portion of your expenses is going to one particular category of the expense will make it easier for you to see what areas you are spending more money on and make decisions based on that.
Categorizing expenses automatically is one of the most financially impactful features rental management software can offer. For example, if after a while you notice that half your expenses on a property stem from plumbing issues, you will know what to focus on going forward. Being able to pull reports with a breakdown of your income and expenses empowers you to make financially sound decisions. It also offers you protection during some disputes over maintenance. It’s also much more convenient than managing physical files or documents on a computer.
Rental management software offers you a simple and comfortable place for tenant communication. This is normally offered as a “tenant resident portal” that tenants can log into via a desktop or mobile app. Once a lease is active, these portals can be used for ACH rental payments and information sharing for both you and your tenants.
Tenants can always see their rental balance and lease end date. They can also communicate with you through direct messaging or submit work orders for maintenance. This adds a more professional aspect to your management, tenants don’t have to call or email you directly, but instead, communicate through a professional medium and it adds a healthy significant partition or space between you and tenants.
Tenant communication features can be useful in many ways. For example, if you manage a multi-family property, you can send announcements so all resident portals are updated.
Another use for resident portals in management software is maintenance requests. Many software products offer systems for tenants to report maintenance issues to you. They can submit a work order ticket and you can respond over the portal by dispatching that to a vendor or perhaps you may choose to do the work yourself. The point is that tenants submit the work orders to the software rather than calling you directly. Notifications are key for you to get when work orders have been submitted, especially if they are emergencies that require immediate attention.
Disputes over maintenance issues are common between landlords and tenants. This software feature provides a streamlined, transparent line of communication that makes troubleshooting simple and professional. Some software products also have optional 24-hour call centers for tenants to be able to call to report issues. The call centers can also help troubleshoot some issues over the phone and you can also instruct them to automatically dispatch work orders on your behalf to a certain list of vendors you provide them during emergencies.
Leasing & Screening
Some software products allow you to list and advertise your rental on many well-known platforms, such as Zillow. Integrations with these other platforms can make rental management software even more comprehensive.
Where this feature really shines is in the screening process. People looking for a rental can apply to your listing directly, and you can take and screen the data they provide. If you choose to move forward, many software will have built-in screening tools including criminal background checks and credit reports.
When you’re just getting started, it might not seem worth it to use rental property management software. You might not really have to. But in many cases, it’s best to start from the very beginning rather than when you have scaled enough to the point where you actually need it. The reason being that you begin to train yourself and set yourself up to manage your business in a professional manner from the very beginning. which will make a significant difference in your success. It’s also a great tax write-off!
At the end of the day, it’s recommended that you look at the aspects of your work where you have the most difficulty. For example, if you generally have a problem keeping up with expenses, start tracking your expenses with software. From there, you can see if rental management software fits into your routine.
Software for rental management isn’t a solution for all your problems. But it’s a great idea when you want to simplify your job and keep yourself more accountable as well as manage your business more professionally.
Hi, I’m just an inspired recent real estate beginner investor named Miguel Rivera from a modest town neighborhood called Pigeon Hill in Aurora, Illinois, the City of Lights! I have 3 years in so far investing in real estate and excited to continue to walk my chosen path to reach my ultimate financial goal of living off my rental income before I reach 35 years old! Driven by infinite growth potential and guided by my mentor, I managed to get started and make it work with just a modest salary, practically no education in the field, learning and applying some key habits. This website is a collection of all things that I have learned so far that I wish can help other recent real estate investors! Click here to view more about my story.