Landlording involves building a business to collect rent payment and generate income while providing housing to customers (tenants). Some landlords prefer to do everything on their own, and some prefer to take a more hands off approach and hire a property management company to do it all. And then there are some landlords that want to control some aspects of the business – like filling vacancies – while turning over other responsibilities – like maintenance and rent collection – to a property management company. In any event, the benefits of hiring a property management company come at a cost as they charge fees for their services. We’ll take a look at some landlording responsibilities and the pros and cons of doing it yourself or hiring a property management company.
As a landlord, there is nothing more important than getting paid through consistent on-time rent collection.
+Know your tenant +Use an online rent payment service like ClearNow to simplify process
-Deal with delinquent tenants -Need to understand eviction process
-Pay property management fee typically as a % of rent collected
Before you can collect rent payment, you have to fill your vacancy. Knowing where and how to place your ads are important tasks to finding the right tenant.
+Easy to list vacancy online with high-traffic websites like Zillow.
-Need to manage inquiries and property visits
Property Management Company
+Expertise at rental marketing to fill vacancies quickly +Have local real estate knowledge to help set competitive rents
-Pay property management fee
The benefits of hiring a property management company to collect rent and advertise vacancies, in the least, will likely be based on finding a balance among effort, time, and money. If you can afford the expense of a property management company to free up time and reduce headaches, then that is a win for both parties. At the same time, many of today’s landlord resources have features that benefit both the property manager and owner, like ClearNow’s owner proceeds. As a landlord, you have choice to make the decision easier of whether or not to hire a property management company.
An ACH payment is an electronic funds transfer made through the Automated Clearing House (ACH) network in the United States. Specifically, there is a withdrawal of funds from a bank account and a corresponding deposit to another bank account. The ACH network is a secure and efficient system used for processing various types of financial transactions, including direct deposits and bill payments.
When an ACH payment is initiated, funds are electronically deducted from the payer’s bank account and then deposited to the payee’s bank account. This method of payment is commonly used for recurring payments, such as rent, mortgage payments, and employee salaries. ACH payments are typically processed in batches and settle within a few business days.
ACH payments offer several benefits, including cost-effectiveness, convenience, and reduced reliance on paper checks. They are widely used by businesses and individuals for their efficiency and reliability in transferring funds electronically.
Traditionally, using the ACH payment network meant learning ACH software and transferring files back and forth to an ACH processor (a bank or a company specializing in ACH processing). Fortunately, Web-based solutions make ACH payments for rent easier to setup than ever before. ClearNow is one of the oldest (since 2000) and most well-reviewed (perfect BBB rating) online rent payment services. ACH payments for rent make the process of paying rent fast and easy by eliminating checks, postage, and stamps. With ClearNow, tenants just need to have sufficient funds to successfully pay rent on time.
In today’s digital age, convenience and flexibility have become considerations in various aspects of our lives. With the growing popularity of online rent payment, paying rent by credit card is an option for some tenants. With most things, it offers certain advantages and disadvantages. Let’s take a look at both:
Convenience and Flexibility: One of the primary benefits of paying rent by credit card is its convenience. Credit cards eliminate paper checks and reliance on the postal service. It offers flexibility in managing your finances, as you can choose your payment date or set up recurring payments.
Rewards: Most credit cards today often come with rewards programs that allow you to earn points, cashback, or other benefits on your purchases. By paying rent with a credit card, you can take advantage of these programs and potentially earn rewards. Over time, these rewards add up allowing you to redeem points for travel, merchandise, or even statement credits. Rewards provide additional value when you pay rent every month.
Transaction Fees: One of the significant downsides of paying rent by credit card is the transaction fees. Some landlords or property management companies may charge a convenience fee or a percentage-based transaction fee for credit card payments. These fees can significantly increase the cost of paying rent and might outweigh the benefits gained from rewards or convenience. It is important to consider the fees associated with paying rent by credit card before deciding to use this method.
Debt Accumulation: Using a credit card to pay rent requires discipline and careful budgeting. If you’re not diligent in paying off your credit card balance in full each month, you may accumulate debt and incur high-interest charges. Falling into credit card debt can have long-term financial consequences and negatively impact your credit score. It’s crucial to assess your ability to manage credit card payments effectively before opting for this payment method.
Landlord Acceptance: Not all landlords or property management companies accept credit card payments. Before making the decision to pay rent with a credit card, ensure that your landlord or rental agreement permits this form of payment. If credit card payments are not accepted, you may need to consider alternative methods, such as traditional checks or other online payment platforms. For example, ClearNow is an online rent payment service where you can pay rent by ACH.
Paying rent by credit card can offer convenience, flexibility, and the potential to earn rewards. It is important to weigh the pros and cons before deciding if this payment method is right for you. Consider factors such as transaction fees and landlord acceptance. Ultimately, the best approach is to assess your financial situation, personal preferences, and the specific terms and conditions associated with your rental agreement.
Whether you are a new or seasoned landlord, landlords are humans. And humans make mistakes. There are some common mistakes landlords can make. Avoiding these mistakes can make achieving success easier.
Poor Tenant Screening
Finding the right tenant is essential to making landlording successful. The ideal tenant is one who will pay rent on time and live in the rental property with care. Tenants who do not pay rent (on time) or destroy the rental property take up a lot of a landlord’s time. In these unfortunate cases, landlords have to track down rent or consider eviction which is a time consuming process. Taking the time to review a tenant’s rental and employment history can provide long term benefits. And conducting criminal background checks and credit checks will give landlords additional insight. Tenant screening services like TransUnion’s Smartmove make it easy for landlords to screen tenants. Having a good tenant screening process in place saves landlords time and contributes positively to the business’ bottom line.
Old School Methods
Among the common mistakes landlords can make include doing things the old school way. Today, the internet and smartphones are a significant part of our lives. Applying technology makes landlording easier, and it can create happy tenants. For example, instead of collecting rent the old school way by cash, check, or money order, landlords should use online rent payment. By collecting rent using a service like ClearNow, landlords save time and eliminate trips to the bank. At the same time, tenants just need to have funds in their bank account. Tenants don’t have to write and mail a check or meet the landlord to hand over cash.
Lack of Organization
Whether you are a full time or part time landlord, landlording is a business. And with any business, you want to be profitable. How do landlords know if they are profitable? They need to stay organized and keep good records. In addition to knowing profitability, landlords have to file tax information to the IRS at tax time. So maintaining good records make this information filing to the IRS easier. Lack of organization is one of the common mistakes landlords can make. Accounting software makes organization really easy. There is a lot of choice for landlords for tools for managing income and expenses. Landlords should take the time and see which software works best for their needs.
As winter abounds, landlords should take the appropriate steps to prepare their rental property for cold temperatures. Doing so will help keep tenants comfortable and ensure the safety of the property and its occupants. Landlords who winterize rental property are taking steps to protect their investment while keeping everyone safe and happy.
The first step in preparing a rental property for cold temperatures is to inspect the building’s exterior. Specifically, landlords should check the condition of the roof, gutters, and windows. Any evidence of damage should be repaired immediately to prevent further damage and energy loss. Adding insulation to walls, ceilings, and attic can reduce energy costs and maintain a comfortable temperature.
Moving on to an interior inspection, landlords should make sure the heating system is in good working order. This includes checking for proper ventilation, ensuring the thermostat is functioning correctly, and making sure there are no drafts or leaks. Having the HVAC system inspected and serviced by a professional in advance of the coldest months will ensure it is running at peak efficiency.
Finally, landlords should remind tenants to take the necessary steps to stay safe and warm during the colder months. Using heavy curtains, sealing off drafts, and keeping the temperature at a comfortable level are ways tenants can help winterize rental property. And landlords can keep tenants safe at home even when it comes to paying rent. With online rent payment, tenants can stay safe at home in the winter and eliminate mailing or dropping off rent in person.
Rent is an unavoidable expense that most of us have to pay. Landlords rely on it as their primary source of rental income. What if there was a way to make the rent payment and collection process easier and more convenient for tenants and landlords? How to do online rent payment is easier then you think. There are a lot of services for landlords and tenants to make rent collection and payment easier.
Online rent payment is a convenient and secure way to pay your rent. It is a way to pay rent without having to write a check and mailing it or going to the property management office to drop it off. So it saves time and money. Instead of paper, online rent payments are electronic in the form of a credit card or ACH transaction. With ACH transactions, there is a debit to the tenant’s bank account and a corresponding credit to the landlord’s bank account.
2) If your landlord accepts online rent payments, ask your landlord how to get set up with the service he/she is using. Also, ask about associated costs, if any. For example, with ClearNow, tenants can enroll only after the landlord has set up a ClearNow account. ClearNow does not charge tenants to use its service.
There are a variety of reasons why a landlord may not live near their rental property. Job relocation may force a physical move but you don’t want to sell your home. So instead of leaving the property empty, you’re willing to rent it out. Another reason could be inheritance. You may have inherited a property in another state and wish to rent instead of selling it. Regardless the reason, we’ll share a few simple tips for a long distance landlord to make landlording a success.
Organize a Local Team
As a long distance landlord, you are not physically present. To handle situations that arise, you need to rely on people who can be present and help you quickly, honestly, and successfully. Having an electrician, plumber, and handyperson that can address a situation quickly (and bill you later) will give you peace of mind. Adding to that local team could be a landscaper who will ensure your property looks good and is cared for. An alternative to organizing a local team would be hiring a property management company. It is important to interview a few to compare their services and fees.
Technology can make the lives of long distance landlords easier. Something as simple as communicating with tenants by text or email can be easy and effective. Online rent payment is another very simple yet powerful technology that makes the rent collection process easy. ClearNow is an online rent payment service that has been serving landlords and tenants since 2000. Rent is automatically deposited to your bank account making rent collection easy and efficient.
Find Great Tenants
Having a tenant you can trust, that will take care of your rental property, and pay rent on time is every landlord’s dream. Screening tenants become even more important for long distance landlords. Taking the time to review applications, interviewing tenants, and performing background checks become essential in an attempt to finding great tenants.
Simple tips for a long distance landlord include having a local team in place, using technology, and screening for great tenants. Today, landlords can be successful even when they do not live close to their rental property.
Much has been written on ways to help landlords succeed. This blog post is not wholly different other than taking the view of how to help tenants. Happy tenants can make landlord lives easier. If there are tools to make tenant life easier, then it is a win win for both landlord and tenant. We’ll take a look at a few tips that are easy for landlords to implement with a long term goal of making tenant life easier.
Use Technology to Make Tenant Life Easier
Many tenants today consider the use of technology essential to daily living. When it comes to paying rent, tenants do not want to write and mail checks. In fact, many tenants may not even own a checkbook as all of their banking may be online. So online rent payment becomes a selling point when looking at properties to rent. Landlords have a lot of choice when it comes to finding the right online rent payment service. Services can vary by way of price, payment types, and benefits. For example, ClearNow’s online rent payment service not only makes paying rent easy and automatic, but it will furnish its rent payment data to Experian for tenants looking to build a credit history.
One of the basic applications of technology is communication. Many tenants have smartphones, which allow them to be accessible. Landlords who communicate via text or email make tenant life easier. Talking on the phone, mailing letters, and meeting in person are time consuming and slow.
Smartphones are powerful tools. Beyond the immediate provides of communication via text, phone, or email or information gathering from the Web, smartphones can be the key to your rental property. Literally. Landlords can install keyless locks on their rental property. With keyless locks, tenants do not have to keep track of a key. Depending on the type of lock, tenants can use a code or their smartphone to open and lock doors.
Something as simple as providing in unit clothing washers and dryers make tenant life easier without a doubt. Carrying around clothes – dirty or clean – is not fun. If dishwashers are becoming a standard appliance in rental properties, then why shouldn’t washers and dryers?
Successful landlords attract and retain good tenants. The tenant selection process can be time consuming. Time is money. Landlords win when they find great tenants and have low tenant turnover. This post will provide landlord tips for eco friendly rentals. Embracing green living can be important to certain tenants.
Reducing or eliminating paper altogether is an easy first step towards an eco friendly rental. For example, online rent payment eliminates checks, envelopes, and stamps. Furthermore, it makes rent payment and collection fast and efficient for both tenants and landlords. There are many online rent payment services available for landlords. Another easy way to go paperless is with electronic signatures. Landlords can have tenants sign leases electronically and save the environment because you do not need printers or paper.
Another landlord tip for eco friendly rentals is to provide recycling bins along with trash bins for tenants. Curbside bins make it easy to reuse or recycle and helps the environment.
Lastly, using energy efficient lighting and water saving fixtures are two more landlord tips for eco friendly rentals. For example, LED bulbs and toilets and faucets that use less water help with efforts towards environmental sustainability and attracting tenants where green living is important.
When you are at the store and ready to check out, we sometimes hear the store employee ask, “Will you be paying by card?” In years past, “card” usually referred to “credit card”. Fast forward to present day, and now the definition of “card” is not so crystal clear. Mention of the word, “card”, could mean “credit card”, “debit card”, or “prepaid card”. Fortunately, many tenants can now use a prepaid card for online rent payment and discover its convenience.
Unlike debit cards, prepaid cards are not linked to a bank account. Instead, you deposit money into an account so that when you use the prepaid card, funds are deducted from that account. Credit cards allow you to pay for items by borrowing money. When you hear “payment on credit”, it usually refers to payment by way of a loan. You are obligated to pay charges made on your credit card within a period of time after the purchase. While different, all of the cards come with fees of some sort.
When it comes to online rent payment, not all services accept credit cards, debit cards, and prepaid cards. For example, ClearNow does not accept credit cards or debit cards, but it can debit some prepaid debit cards. Tenants wanting to use ClearNow with their prepaid debit card need to first check with their card company to ensure their card account can accept an ACH debit. If it can, then tenants may use their prepaid card for online rent payment with ClearNow.