Author Archive: Tracey March
Tracey March has been working for allpropertymanagement.com since it began in 2004. She was a partner in a general practice law firm, where she practiced real estate law and landlord-tenant law, for six years. She was also a real estate broker for three years. Tracey now researches and writes about property management and real estate investment. Find her on Google Plus.
By Tracey March
At the core, rental owners are in the rental business because they want rental income. If tenants don’t pay their rent, rental owners don’t get paid and they may have to initiate costly and time-consuming evictions.
Property management professionals know that the method used to collect and process monthly rent impacts whether tenants make on-time rent payments. A good rent collection and payment system should meet two requirements. First, it should make it easy for the property owner or manager to collect and track payments. Second, it should make it easy for your tenants to pay their rent. Many rental owners hire property managers because they don’t want to deal with rent collection. If you self-manage your rental home, here are three tips for making your payment system easy and efficient.
Collecting and tracking physical payments like rent checks or cash is a pain. Several web-based services, including APM parter Yapstone RentPayment.com, allow rental owners to collect rent payments online, over the phone, or via direct bank transfers, while keeping their checking account information private. Rent payments can be automated or paid around the clock for guaranteed on-time collection, and they can be paid using mobile phones. RentPayment.com even allows property managers and rental owners to input customized late fees and penalties so they are automatically tallied when appropriate, and to accept application fees and security deposits so leases can be closed without a wait.
2. Insist on receiving one payment for the full amount of rent.
When you have tenants who are roommates, have them choose one amongst them who will be responsible for collecting rent from the others and paying rent to you in one payment. This rent collection policy makes life easier for you because you only have to collect and track one rent payment. It also minimizes your involvement in your tenants’ personal financial situations. In addition, make sure that roommate tenants are jointly and severally liable for the rent, meaning that if one roommate doesn’t come up with his or her share, the others are responsible.
3. Review your rent collection policy with your tenants.
Have a formal, written rent collection policy. At move-in go over it with your tenants, have them sign it, and give them a copy. Consider offering incentives for on-time payment as well as penalties for late payments. Enforcing the policy consistently from the beginning of each tenancy sets a professional tone and lets tenants know your clear expectations about on-time rent payments.
Current landlords and property managers: do you have any rent collection tips?
By Tracey March
If you want to minimize the risk in your property investment business, you should understand that a key to your success isn’t just buying the right investment property–it’s finding the right property management–whether that’s you, or someone you hire. And a critical component of property management is finding the right tenant for your real estate investment property, which means tenant screening should be at the top of your priority list. Here are five things you can do to ensure that your tenant screening process helps you identify the best tenants and weed out the bad ones.
1. Let applicants know that tenant screening is mandatory. Just hearing the words “screening process” will make some potentially bad renters self-filter and save you time.
2. Use your tenant screening process consistently. A systematic and comprehensive screening process that you apply objectively to every applicant will protect you if someone claims you violated the Fair Housing Act. It will also help you to screen out bad renters.
3. Decide what your minimum qualifications will be, and stick to them. Will you have income requirements so you have some assurance that your tenants can make their rental payments? Will you accept tenants with criminal records? What if they haven’t had any arrests for more than ten years and a steady job? Think about these issues, make a decision, and apply them consistently.
4. Run a credit check. Credit checks are critical. You can find out applicants’ debt-to-income ratios and whether they pay their bills on time. Learn how to read a credit report. And never accept a credit report that a potential renter brings to you; get them directly from a credit reporting company.
5. Check references. Always call present and past landlords. A present landlord may give a good reference to get rid of a bad tenant; a past landlord may be more forthcoming. Ask about evictions, complaints from other tenants, pets, major maintenance issues, if rent was paid on time, and if the landlord would rent to the tenant again. Also consider getting and checking employment and personal references.
If you don’t have the time or the desire to do tenant screening, don’t cut corners–consider hiring a property manager to help you. Alternatively, All Property Management has partnered with leading businesses, including TransUnion, to offer services to our clients. TransUnion offers a tenant screening service called MySmartMove that provides credit and criminal records checks, leasing recommendations, and suggested deposit amounts to independent property managers and residential real estate investors.
Have you screened tenants before? What methods did you use? Have you used social media sites, such as Facebook and Twitter. Do you think that’s a good idea?
By Tracey March
Landlords and property managers are using social media for many reasons, including resident retention. You might stay in touch and communicate with tenants using your Twitter and Facebook business accounts, posting useful information about upcoming maintenance and repairs, links to useful websites, and reminders.
But have you considered using a social media review as part of your tenant screening process? Social media can provide all sorts of useful information about potential tenants, and can be particularly useful for confirming information on their rental applications. However, you do need to use it appropriately. Here are some important points to remember:
- Potential tenants may accuse you of violating their privacy if they find out you did a little social media research. However, if their accounts are public, you are allowed to look at them. Just make sure that if you do a social media review for one tenant, you do it for all.
- Sometimes what you read on the Internet isn’t true–shocking, we know. Remember that some people have a “social media persona” (remember Manti Te’o's fake girlfriend?) which does not reflect accurately how they would be as tenants.
- You could be exposing yourself to fair housing complaints if your research reveals your potential tenants or their family and associates are members of a protected class and you don’t offer them the rental unit. However, if your reasons for selecting different tenants are fair, nondiscriminatory, and well-documented, and you applied your screening requirements uniformly, you should be protected. Some experts suggest hiring a third party for social media research to filter out the information you shouldn’t be considering. Remember that in your state there might be additional protected classes to consider.
- Once you learn something about a potential renter, you can’t unlearn or unsee it. You may disagree with a person’s political beliefs or life choices that have nothing to do with whether or not they will be a good renter, so think about whether you’ll be affected by that information.
Have you used social media to pre-screen potential tenants? Do you have any advice or words of warning?
As always, the information provided here is just that–it is for informational purposes only and is not legal advice. If you have any particular questions or issues, please consult an attorney.