Common Problems in Rental Property Management
Advancing your rental property business starts with identifying your obstacles to growth. These are the problems that come up again and again and add to the complexity of your business every time you take on a new property. The most common stumbling blocks for landlords trying to grow are:
- Attracting and retaining good tenants. Each additional property requires additional effort to advertise, screen, select and maintain tenants.
- Collecting rent. Each additional property adds a rent check for the landlord to chase down every month.
- Managing expenses. More units mean more mortgages, more taxes, more insurance policies, and more maintenance costs. Landlords often struggle to keep track of all their expenses and keep a clear line of sight to each individual property, and their business as a whole without the use of rental property accounting software.
- Reporting on performance. It’s difficult to grow when you’re working with months-old data, but landlords struggle to report on their performance. Rental property managers need better tools to get data about their business in real-time.
Overview of Free Property Management Software
Property management software can be extremely useful in reducing the amount of time spent on these repetitive tasks.
For independent landlords, however, every dollar matters. Free property management software is available and can be just as effective as the paid options – if you know where to look.
The problem with many free software options is that they often only do one thing, they rarely work well together, and they can take some serious jury-rigging to do what you need.
Independent landlords often fall into the trap of using these kinds of solutions when starting out and then struggle to adapt as they try to grow their business.
Even products made specifically with the landlord’s needs in mind typically operate in a narrow vertical and make it free for landlords by relying on a ‘freemium’ model, or worse, passing costs along to tenants.
When seeking out free property management software, aim to minimize the number of different solutions you use. Instead, look for options that completely cover at least one of three major categories of property management software:
1. Advertising, screening, and selection
Tools like Hunt and Apartments.com offer these services for free and make money by charging for extra services like promoting your ad and running credit reports and background checks.
2. Property maintenance and tenant communications
Apps like Avail and TenantCloud include features with their free plans that give tenants a platform to submit work orders and landlords a system to track progress. In many cases, these property management services are added by companies that are trying to branch out from tenant screening.
3. Property management accounting and finances
A leader in the finance category, Baselane, offers free software to manage all of your property management finances. With Baselane, landlords can collect automatic rent online collection, manage and automate their bookkeeping, get real-time insights into their financial performance, find better deals on mortgages, loans, and insurance, and even open bank accounts that are directly linked to their accounting platform.
4. Make Accounting for Property Management Easy
Independent landlords often find accounting to be tedious and difficult – and so they put it off whenever they can. As much fun as procrastination can be, landlords who want to grow their business need to find ways to simplify their accounting process.
Ironically, making property management accounting easier starts with getting disciplined about details. The better you do at tracking your transactions in detail as they happen, the easier it becomes to reconcile your accounts later on. The more granularly you break out your bank accounts, the easier it is to track and detail those transactions.
5. Automating Property Management Tasks
Another way advanced property management companies simplify their accounting is with automation. Landlords who want to grow need to have a clear picture of their finances across rentals, real-time data, and systems they can quickly and easily scale. For example, the ability to acquire new residential or commercial properties without significantly increasing the amount of time and effort it takes to manage expenses.
Delegating things like categorizing expenses and reconciling accounts saves a ton of manual work. Rather than going line-by-line through receipts and spreadsheets, you can use automation to do the heavy lifting and free up your time for more important tasks. At the same time, automating rent collection saves you from having to check in to make sure your tenants have paid on time.
Integrating your landlord banking accounts with your accounting software can reduce friction in these processes even more. Recurring transactions like mortgage payments can be tagged and recorded automatically without any additional input.
And with automation, you can pull detailed reports with up-to-the-minute information so you can make smarter decisions about your business and grow at the right speed.
Final Thoughts: Manage Smarter, Not Harder
Your rental properties are a business like any other. The key to success is to find ways to do things that scale and replicate your processes without adding work.
To advance your rental business, look for ways to simplify your recurring tasks without adding time and cost. This can be accomplished with free software when you choose purpose-built solutions that cover all of your needs across a single category.
As a property manager, some tasks come up over and over again. Things like collecting rent, tracking expenses, and reporting on performance take up a lot of time that could be used for more important things. Putting those tasks on autopilot takes them off your plate and frees up more of your time for the problems that can’t be delegated.
When choosing free property management software, look for options that let you tightly integrate broad areas of your rental business.
For example, rather than using separate tools to collect rent, manage expenses, run analytics and do your banking, opt for software that brings all your rental property finances together in one place.
The short answer is yes. The long answer, however, is a little different.
Landlords have unique needs when it comes to accounting. While accounting tools like QuickBooks can do everything that a landlord needs, they’re not built with property management in mind. In absence of property management account software, you'll need to know how to set up your books to run your business. The best property management accounting software comes pre-configured so you can be confident you’re capturing everything you need to.