Landlords who take an old-school approach to property management often find their anticipated monthly income isn’t quite what they expected. “Back then” we put a lot of weight into maintaining relationships by trusting tenants would pay their rent on time. And the thing is, most of the time, it worked! But as the rental market changes, the old-school property management style is becoming more and more obsolete.
Today, more than 36 percent of Americans rent their home. That’s 16 percent more than the number of Americans renting before the recession began in late 2007. Tenants are more demanding, the rental market continues to grow, and new technology is proving to be a landlord’s best asset.
If you’re still stuck in pre-recession property management tactics, here are a few ways to breathe some fresh air into your approach.
Marketing the rental property
Old-school style: The old-school approach to marketing rental property typically included a word-of-mouth advertising campaign throughout an established network of business colleagues. It was also common for old-school property managers to paste flyers (a cost effective way to get the word out) about the available rental on local storefront windows and telephone poles—with a tear-off at the bottom of the flyer.
Modern approach: Today, property managers can advertise available rental property on a variety of marketing avenues, including the MLS and other websites dedicated to marketing real estate rentals.
Old-school style: Before technology became readily available to property managers, they would personally check the tenant’s references by having a telephone conversation with the references disclosed on a rental application.
Modern approach: Screening tenants today is done by quickly evaluating credit reports, criminal background checks, and employment documentation before approving an applicant’s tenancy. There are online companies and mobile applications that make this efficient, cost-effective, and comprehensive. Most screening services cover things like:
- A credit report from one or all three of the credit repositories
- A nationwide criminal background check
- A nationwide eviction history
- A sex offender registry search
The comprehensive report about the future tenant allows property managers and property owners to examine each applicant’s credit report and credit score quickly and efficiently. The background check included in the profile helps mitigate the risks of undesirable scenarios often created by poor tenant choices. These unwanted situations include things like late rental payments, non-cooperative tenants, and property damage.
Old-school style: While old-school property managers had checks sent to them or knocked on doors to collect them, the modern approach to rent collection includes an online portal for tenants to easily pay their rent at their convenience.
Modern version: Online Tenant Portals offer amazingly convenient options, not only to the tenant but to the property manager as well. This software can offer:
- Overnight funding. There are software programs available that can efficiently manage your rent collections and even give you your available funds the very next morning after the payment transmittal. These options vary among software programs, so it pays to do your due diligence regarding just how quickly you can access the funds tenants have deposited for rental payments.
- Custom website. Many software programs have an integrated website and even offer technical support to assist a property manager. Using an integrated program allows you to avoid using a third party program when offering your tenants an online payment option embedded within your own property management website. Choosing to integrate both your website and tenant portal will also provide the safety, security, and comfort your tenants demand.
- Remote access. Many software programs allow you to view and respond remotely to most issues. Your response is recorded instantly. Property managers can take advantage of the ease in which one can set up remote access and have everything forwarded to a smartphone.
Learn more about modern property management tactics
To learn more, register for this course: Property Management—The Next Generation. You’ll get an in-depth overview of demographic trends impacting the market, property management software choices, incentive programs, and insights on how to proactively manage your properties.
To ensure your management style is up with the times—and learn how to avoid costly mistakes—check out McKissock’s series of property management courses:
- Property Management—The Next Generation
- The Property Management Primer
- Simple Questions, Big Consequences: How to Avoid Fair Housing Violations as a Property Manager
For more real estate continuing education opportunities, visit McKissock.com.