- Finding a Good TenantPerforming Maintenance and Repairs
- Losing a Tenant due to Rent Increase
- When is a Good Time for Renovation
- Avoiding Legal Troubles
- Rent Collection and Managing Finances
On the surface, being a private landlord appears to be as simple as keeping track of due dates and collecting a monthly check. Regrettably, this is not the case. Landlords do more than crunch numbers; there are numerous advantages and disadvantages to being a private landlord.
They may want to make money on their investment property, but management must come first. Independent landlords have a lot on their plates—from managing demands to filling vacancies and ensuring consistent cash flow.
In this post, we are going to take a look at some struggles that private landlords might face and how property management software can help them.
Six Key Pain Points for Private Landlords
Pain Point no. 1: Finding a Good Tenant
Private landlords are familiar with the anxiety that comes with a lengthy vacancy. Independent Landlords who own multiple homes may be even more concerned because a vacant property means less income and ultimately could affect their ability to make future mortgage payments.
In addition, many landlords work hard to maintain their rental portfolio as a personal source of income as well as a retirement plan. When a lease expires and the former tenant returns the keys, it can be disheartening to have to take the time—and spend money on professional cleaning services—to restore the house or apartment to its previous condition. Prospective tenants might see the home as a candidate for renovation instead of a place to live.
Fortunately, there are a plethora of options for creating a property listing. There are also thousands of websites that provide ways to connect with a potential tenant, tools to help you objectively screen tenants’ information, and an automated process for private landlords to find trustworthy and profitable tenants to occupy their rental property. This will allow independent landlords to keep their rental property occupied and earn a consistent income.
Pain Point no. 2: Performing Maintenance and Repairs
The process of property maintenance can be one of the more difficult aspects of managing a rental. There are many general upkeep tasks, such as cleaning up litter, cutting grass or repairing leaks around pipes and fixtures. There are maintenance companies that can manage these responsibilities, but some private landlords prefer to do it themselves to save costs.
Private landlords should be able to plan ahead when it comes to property maintenance, as minor issues can quickly escalate into costly repairs. Landlords should inspect their properties on a regular basis. They should also ensure that the line of communication with their tenants is open so that they can report issues as soon as possible without fear of being ignored or having those problems go unnoticed.
Pain Point no. 3: Losing a Tenant due to Rent Increase
It’s not always easy for landlords to adjust the rent on their properties, but it’s important to keep up with the market and ensure profits. Some landlords fear that if they increase rent on quality tenants then these great people will leave and go somewhere else.
In an increasingly competitive market, a landlord must weigh the cost of losing one tenant against the risk of having trouble filling vacancies. Many private landlords are unaware of the importance of researching and planning for a rent increase before deciding on a new rate. If they fail to properly notify tenants as required by law, landlords risk facing lawsuits or protests from other residents who are unhappy and unprepared to pay more.
There are also incentives landlords can offer tenants in exchange for having to increase their rent such as upgrading an appliance of their choice to keep them happy and satisfied.
Pain Point no. 4: When is a Good Time for Renovation
Knowing when and how to renovate is crucial for maintaining the value of rental properties as a private landlord. A renovation, for example, can be used to negotiate with tenants by asking for a higher rent after major changes have been made.
When renovating a property, the first step is to learn more about what tenants want and need. Surveying tenants with questions about their requirements or asking around for reviews of similar properties in the area are good first steps landlords can take.
Private landlords need to do their due diligence when renovating and plan for all the costs. If the renovations are extensive enough, landlords may need to pay to relocate tenants for the entire renovation process.
Pain Point no. 5: Avoiding Legal Troubles
There are many federal and state laws that landlords need to be aware of before renting out their properties. The good news is that some of the most important laws are the same throughout the country, such as:
LAW ON DISCRIMINATION
No discrimination on basis of sex, physical/mental disability, legal status, changes in legal status, pregnancy, parenthood, race, religion, color, national origin
LAW ON LEGAL LEASE DOCUMENT
A landlord’s responsibilities include providing a lease agreement and the other legal paperwork. It’s the landlord’s responsibility to make sure that the rental contract is written legally and complies with all applicable laws. The length of the lease, the monthly rental rate, and therefore the names of the tenants must all be clearly stated.
Legal disclosures, like down payment information, are required in some jurisdictions. The lease should also include all necessary clauses, like a recommendation that tenants purchase renters’ insurance.
LAW ON REQUIRED DISCLOSURES
Landlords in most states are required by law to produce tenants with important information about the state and native laws, individual landlord policies that they’ll be living under while renting.
Disclosures are terms that landlords often include in leases. These notices may inform tenants about mold, sex offenders living nearby, or any health hazards like lead-based paint exposure to call just some samples of what could qualify as disclosure and the way it’ll be communicated via email blast with more specific details being shared at tenant orientation prior the go into their new home
LAW ON REPAIRS
Tenants and landlords have a mutual responsibility to keep up their property so as for it to be comfortable. Landlords are required by law to retort promptly when notified that there’s a problem with the HVAC system, plumbing, or other major repair needed on either side of this agreement; Tenant’s duty includes reporting any issues they are available across so you receive proper attention as soon as possible.
Tenants have the right to withhold rent money from landlords who fail to form repairs that affect their health and safety, like part breaking in freezing temperatures.
LAW ON deposit
A margin is sometimes required in most lease agreements to hide damage caused by the tenant or if the tenant fails to pay rent. Only funds from a margin are often kept by a landlord if they’re wont to cover late rent payments or property damage.
LAW ON NON INTERFERENCE WITH USE
Some landlords aren’t aware that they need to give their tenants a minimum of 24-48 hours notice before entering the rental unit. This protects a tenant’s right to privacy and quiet enjoyment within the home, but it also means you can’t interfere with this if there’s nobody present when a landlord enters unless proper notification was given beforehand!
LAW ON EVICTION
In the commonest kind of eviction, a tenant is aloof from their rental property without cause. In every state in America, there are laws that regulate this process and landlords must follow them carefully to avoid fines for failure. The primary step involves serving notice about why you would like them gone – typically either nonpayment for rent due; neglecting duties like maintaining with repairs after the agreement expires (especially major ones); causing deliberately destructive behavior like graffiti vandalism which causes damages beyond normal wear & tear).
Understanding what the law allows and does not allow them to do is a part of that effort. Despite the fact that a landlord owns a rental property, tenants have special rights against discrimination, harassment, arbitrary rent increases, and wrongful eviction.
Pain Point no. 6: Rent Collection and Managing Finances
Tenants not paying their rent is one of the most common problems that private landlords face. Rent collection is one of the most important aspects of property management and yet the most challenging. The monthly rent that private landlords collect from tenants could be their only source to get paid, which means they need it on time and in full every single month. Unfortunately, many independent landlords struggle with this task because property management isn’t easy no matter how few or how many properties they own. It can feel like a never-ending job sometimes.
Private landlords must also deal with the difficulties of keeping track of their finances. The responsibility of managing their rental properties is overwhelming for many private landlords. Keeping track of every little expense, ensuring they have receipts for tax purposes, and then dealing with all that tedious paperwork is enough to put many people off becoming a landlord. This leaves them with two options: 1) completely outsource it by handing over the keys to a property manager or handover the job to a CPA or bookkeeper, or 2) use ineffective management software that puts private landlords at risk of financial loss. It is crucial for private landlords to find an efficient system that allows them to curb tasks such as rent collection, bookkeeping, and banking.
There is, thankfully, a solution. Private landlords can use Baselane’s online accounting and management services to improve the efficiency, transparency, and profitability of their properties.
Baselane was built from the ground up to serve the needs of independent landlords as an end-to-end financial platform. This unique property management software provides tailored financial technology, automated tools, and actionable data to help independent landlords save time, increase returns, and grow their rental investment portfolios.
The key features listed below have been built into the Baselane software to make life easier and more profitable for private landlords.
Hassle-Free Rent Collection
Tenants who fail to pay rent on time can create many issues that are financially destructive for private landlords. It’s important not only to take care of the money but also prevent these problems from arising in the future. An effective system for renters fees and payment plans means landlords aren’t constantly dealing with delinquent payments.
Baselane provides an automated rental collection system that sends payment reminders to tenants on the private landlord’s behalf, saving time and effort. Landlords can simply schedule payment requests, and the system will take care of the follow-up. Baselane sends email reminders prior to the chosen due date, greatly reducing the likelihood of late payments and greatly increasing peace of mind.
This feature also allows payments to be made directly to the private landlord’s bank account on a monthly basis. They no longer have to worry about constantly checking their bank account because there will be a notification whenever a payment’s status changes.
Bookkeeping Made Easy
With automated bookkeeping, private landlords can get their finances in order without spending hours on menial tasks. No more paper! Landlords can just digitize their transactions and keep them all in one place with Baselane. No longer do private landlords need a ledger. They can use Baselane to easily organize everything according to how much money was spent during any given period at their business (and even add additional notes).
Keeping track of rental property finances can be easy with a simple, consolidated view. With all their accounts and transactions recorded on a single, digitized ledger, landlords get a complete picture of their cash flow.
For independent landlords, there has never been a better time to embrace digital banking. The ability to monitor, move, and use their finances on mobile devices and computers will relieve independent landlords of the physical burden of managing their cash flow at a bank.
Private landlords can use Baselane to securely connect their bank accounts and track any transactions relating to their rental properties in real-time. Private landlords will be able to make and accept payments using the platform from any device. Baselane also gives them the option of creating sub-accounts for each unit in a triplex, separating savings for a future remodel, and keeping security deposits separate.
Private landlords will not only be able to organize their finances, but they will also be able to grow them. Baselane gives private landlords unlimited 1% cash back on all debit card purchases. Baselane has everything a private landlord needs to manage and grow their properties – all features are included and there are no hidden costs.
Property management is not for the faint of heart, but it is not impossible even for a first-time landlord. There will be a number of bumps in the road and challenges to overcome. A new landlord might think it’s easier to just hire someone to do these tasks. They may believe that outsourcing property management is the best way to avoid wasting time and money managing your properties. However, their expertise and professional services come at a high cost e. With software like Baselane, landlords can stop going to the experts and become an expert themselves.
With the help of property management software, landlords can manage their properties with ease. They can allocate resources efficiently and stay on top of critical tasks like rent collections, bookkeeping, banking while maintaining tenant relations, communications, and more. Plus it’s affordable! If you want to save 8-12% of your monthly rental income, sign-up for a property management software that helps private landlords save time and avoid costly mistakes.
There are several things a landlord can do such as purchasing good insurance, making sure they are buying the right property, and streamlining their rent collection and other processes.
In every business, there’s always going to be a risk. The reason for bankruptcy sometimes is taking too many of these risks. For example, taking on too many down payment deals or buying too many rentals too quickly can create less equity and more debt. All in all, making the right choices and taking the right deals can de-risk real estate investing and make your rental investments profitable.
Baselane is a free platform for landlords and renters. Despite their constant efforts in improving their services, Baselane is completely free with no hidden charges.