If you work for a property management company you know the importance of maintaining good relationships with your owners and tenants. And if you are self directing your own property management you probably know that tenants and landlords often clash. But it does not have to be that way. You must stay on top of your management tasks, and let your tenants know that each one of them is important to you.
Our company has provided software for property management to over 20,000 subscribers since 2005. We are recognized as one of the best property management software companies and, by the way, we have just rebuilt the software to be even easier to use thus making the communication with tenants even better. The legacy software won a webby and the New Release has already won a Best In Business for software award. With all of this experience, there are some things that we know will help you get good tenants, keep your tenants happy and retain them longer.
Expect the Best from your Tenants
You are entering into a business contract with each tenant. You expect them to pay rent and care for your property in return for their access and right to occupy to a quality property in which to live or work if it is a commercial property. Remember that it is a business relationship, not a friendship. From the beginning treat the tenant with respect. Once the lease is signed the tenant has agreed to pay rent on time. Be sure that he/she does just that. We recommend use of automated rent payments made through a tenant portal which contains all of the pertinent information that they need plus a way to make their rent payment in less than a minute. If they are late, do not offer to waive late fees. In the automated system, late fees are added automatically on the designated day. Waiving late fees only encourages more late payments. If you have a chronic late payer, make arrangements so that rent is due after they have received their wages or can reliably make the payment. If that means you extend the grace days a few more days then that is a better way to resolve the issue than to waive late fees. You might also have them pay two times per month instead of once.Don’t worry, if they are using automated rent payments, the accounting is done for you when that payment is made. And remember that any changes to the original agreement need to be memorialized in writing and signed by both parties.
You Make the Rules
It is the responsibility of the landlord or property manager in conjunction with the owner to make the rules for tenants residing in the property. Include those rules when they sign the lease. We recommend a separate document stating policies and rules as well as vacating procedures. The tenant signs that document and it becomes part of the lease. Tenants need to know the rules before they move in, not when they have violated one. Tenants need to know that they are responsible for being cordial to neighbors and abide by the rules of the property. It is always best to meet the tenant in a professional environment like an office. Our SPS software offers esign for leases and notices so that an office is not required to look professional. One other thing that is very important is good communication. The SPS software has tenant portals through which the tenant can easily notify you of any issues or report maintenance items.
Get Repairs Done Quickly
Things happen to rental properties during normal wear and tear, and repairs need to be done to keep the property in good shape. Occasionally there is also tenant caused damage, like a child flushing toys down the toilet or someone hitting the garage door with their car. Both types of damage should be repaired by the landlord or property manager, not the tenant. The most important thing that a landlord can do is get the repair done as soon as humanly possible. The tenant can be billed for tenant caused damage or the security deposit can be used if they do not pay. We recommend billing first so that the security deposit remains in place for the future. Always follow up after the repair with the tenant to be sure that the repair was done to the satisfaction of the tenant. We recommend that you inspect the repair or at the very least have the contractor take pictures before and after the repair and send them to you. Your tenant will know that you care about their comfort and you will retain them longer. Maybe even more important is that you will be sure that your property is kept in top condition.
You Must Do Inspections
Inspections are part of the price of doing business. Inspections done regularly will insure that there is no major damage being done to your valuable rental property. With new tenants, you may want to do an inspection or visit the property in one month to see how the tenant is faring. At the same time you can look around to see how they are caring for the property. If all is well you may schedule the next inspection visit for 3 months. If things look dicey, give notice to clean it up and come back in a week to inspect again. This may seem like over kill but we have seen some tragic situations experienced by our subscribers when they do not use the inspection software available to them. One subscriber found three families living in a two bedroom house. Only 4 people were on the lease. Another found a herd of cats, none of whom were authorized by a pet agreement. In fact the pet agreement clearly said that no pets were allowed. If these situations had not been discovered, you can only imagine the damage that would have been done to the property. Inspections are an ounce of prevention against pounds of cure.
Develop Good Relationships
Always be cordial to your tenants. They are supporting your business and even if you may not like them personally, you need to be pleasant. Remember that your tenants are not your friends. They have a business relationship with you. That does not mean that you can’t send Holiday cards or throw parties for the multifamily community once in awhile. But in the process of running your rental business, be firm and fair, attentive and respectful.
Smart Property Systems gives our subscribers the tools to be able to develop good relationships with tenants, members of associations, and owners of residential and commercial properties. That is accomplished with automation of most repetitive tasks and by allowing all stakeholders in the business to easily communicate through the portals. If you are not using software or are unhappy with your current software check out https://smartpropertysystems.com.
Submitted by: Timmi Ryerson
December 18 2015
I listened to a web cast today on how to fill vacancies with residents who will pay rent. I was surprised to hear that the incidence of failure to pay rent is going up. The fact, according to this presenter, is that rents are rising and incomes are staying the same. That means that more of a family’s budget has to be put toward the rent. There are several safeguards that can be used by the property manager when renting to someone with little or poor credit history. But the one least used, that comes to mind for me, is giving the tenant a bit of good old fashioned education about how to budget.
Young people, especially students, are sometimes on their own for the first time. Budgeting may be taught in business classes but I have not heard of it being taught in school as a general rule. Another category of high risk families is single mothers with no child support. However, poor rent payers are not just limited to these groups. They come from all income levels and backgrounds. But everyone needs a place to live. Everyone needs shelter and to be able to feel safe and secure in their home. Furthermore, it is against the law to discriminate when considering an applicant unless that applicant obviously does not earn enough money to pay the rent. So there are going to be times when you will rent to a high risk tenant. Of course you always use tenant screening, and check pay stubs, and speak with employers, and past landlords before deciding to rent. Those are tried and trusted ways to get good tenants. But we have all had to get after our tenants at one time or the other for failure to pay on time.
The next suggestion I have is that these high risk tenants should get the budget your money talk. “The rent” is the most important payment a resident makes each month. Oh they may argue that they need a car more than a place to live, but with that mentality, they could end up living in their car. Ideally rent makes up 25% of the monthly budget. But recently it has creeped up to an average of 33% of the monthly budget. That leaves car payments, insurance, utilities, food and clothing and finally entertainment to be budgeted (planned). Hopefully they are not into using credit cards when they run out of their own money or the situation could escalate from good to bad very fast. If at risk tenants turn this sequence around, you will see many failures to pay rent. Unfortunately we see the reverse sequence all too frequently. (i.e. entertainment, clothing, food, utilities, car payments,insurance, rent) At least if you have the talk, you will put them on alert. Hopefully they will realize that budgets are a great way to keep everyone happy and give them the feeling of control over their lives.
I have been in property management for many years managing my own investment properties, before I bought a software company that provides software for property management. In both capacities I have heard all kinds of excuses and reasons for late rent payments. You all have heard them.
“I mailed the check. Didn’t you get it? It must be lost in the mail”.
“I gave the rent to my husband. Didn’t he give it to you ?”
One of the best was “I had to take my kids on vacation and don’t have enough left
to pay rent.
“I dropped an envelope with cash in the door slot of the office. It is not my fault if someone stole it.”
And another doozie “I already paid the rent last month.”
Then there is the issue of paying on time. When you don’t get paid on time, your own budget and finances suffer. It costs the property manager money every time a rent is late. Of course we have found that through use of online automated rent payments, the excuses go away. There is no more excuse for late rent because it takes the guess work out of where the rent is and all of the arguments listed above, except the vacation situation, are no longer valid. But that is a topic for another blog.
I think it is a great idea for the property manager to talk with any young tenant, first time tenant or person with poor credit about “the importance of paying rent on time, every time it is due” before handing over the keys. Sometimes they need to hear that rent should be the first bill they pay before they spend money on anything else.
The other question to ask your new tenant is on what day they get paid. A solution to late rent payments may be as simple as setting the date rent is due to a couple of days after the person gets paid, or at least make the grace period long enough to accommodate that tenant. In some cases, it may be a good idea to add language to a lease document stating that the conversation about how to budget for the rent payment was done. It may also be a good idea to offer a booklet about budgeting with a sample budget to demonstrate how easy it actually is. I realize that this kind of approach will not solve all of the problems with poor rent payers but it may bring your percentage of on time rent payments up a few percentage points.
Smart Property Systems
Smart Property Systems Announces New Collaboration with TransUnion SmartMove®
August 28, 2015 7:12am Comments: Smart Property Systems, a leading cloud application software for property management, is pleased to announce a vendor agreement with TransUnion.
Sun Valley, Idaho (PRWEB) August 28, 2015
Smart Property Systems announced today a new integration with TransUnion SmartMove®, to offer tenant screening solutions. Using TransUnion SmartMove, Smart Property Systems users can order a credit report, which is formatted for tenant screening purposes, and a criminal report, drawing from millions of national and state records. These tenant screening reports include a recommendation based on the Smart Property Systems subscribers’ rental criteria.
Smart Property Systems subscribers are able to order reports from their subscription dashboard menu to screen tenants on easy to use order requests. Reports are returned into a system that collects and stores the reports for viewing as needed.
“Ordering a Tenant Screening report is one of the most important tasks a landlord or manager does when choosing a new tenant for their valuable rental property,” said Timmi Ryerson, CEO of Smart Property Systems. “We are happy to have this direct relationship with TransUnion, which provides good quality, reliable reports with recommendations based on property criteria entered by the subscriber. Landlords and managers need to receive these reports quickly to facilitate rapid turnovers. The motivating goal of staff at Smart Property Systems is to reduce turnover time and help the subscriber increase profitability.”
Smart Property Systems subscribers can get complete reports from TransUnion SmartMove by clicking on the order button in the subscriber account and filling out the information from the tenant application. Prospective tenants are contacted via email to authorize the report. Once the prospective tenant authorizes the report, property managers and landlords can review their TransUnion SmartMove report within minutes.
“TransUnion SmartMove offers a tenant screening solution that is efficient and easy for both prospective tenants and for landlords,” said Jason Norton, vice president of TransUnion SmartMove. “Now, Smart Property System subscribers will benefit from greater insights into the credit and criminal history of their prospective tenants.”
As soon as the tenant complies and authorizes the report, it is sent back to the report file at Smart Property Systems. For a demonstration of this functionality, contact Smart Property Systems or visit smartpropertysystems.com.
855 796 7771
About Smart Property Systems
Smart Property Systems has offered best in class software for property management since 2004. Over 20,000 subscribers have been served since the Company opened for business. In May 2015 the new build of the code was released and all active subscribers from the legacy software were moved to the new platform which is built on the latest Ruby on Rails with HTML 5 technology. This software offers stability and security to the users, and automates the repetitive tasks required when managing properties and leases, whether residential or commercial. Customer reaction to this new software has been very positive. Smart Property Systems software supports the complete rental cycle with features that make property management easier.
About TransUnion SmartMove
TransUnion SmartMove is an easy, reliable online tenant screening solution designed to give independent landlords the results they want — and renters the security they need. Landlords receive a TransUnion credit report formatted exclusively for rental screening purposes, a criminal report drawing from hundreds of millions of national and statewide criminal records, a national eviction report, and a clear, reliable and customized leasing recommendation. Renters get the peace of mind that only TransUnion, and not their landlord, will have access to their sensitive personal information. SmartMove is powered by TransUnion.
Information is a powerful thing. At TransUnion, we realize that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.
We call this Information for Good. http://www.transunion.com/business
For the original version on PRWeb visit: http://www.prweb.com/releases/SmartPropertySystems/Transunion/prweb12927213.htm
Read more: http://www.benzinga.com/pressreleases/15/08/p5798819/smart-property-systems-announces-new-collaboration-with-transunion-smar#ixzz3kPdeAw6Y
If you follow our blogs (Problem Rental Solutions and Real Estate Asset Links) you have read how important we believe tenant screening is. So this article will tell you what you need to know about reading the Tenant Screening Report. You cannot request a credit report directly from a Credit Bureau. You must use a portal to request a screening that the tenant approves and fills out before that report before it is sent to you. Tenant Screening is built into the Smart Property Systems platform for your convenience. You order the report which generates an email to the prospective tenant and they log in and fill out the data. Once you get that report back, it is important to be able to understand what you are seeing.
First check the tenant’s credit Score. Some reports give a FICO score and some give a Vantage score. The Fico score is that score given by the credit bureau which provided the report. A Vantage score is a combination of all three FICO scores from the three main credit bureaus that serve the US. Scores range from 300 (poor) to 850 (best). Generally any score above 650 shows reasonable risk and indicates that the tenant will make regular rent payments. Scores below that level will put you on notice that you need to get more security deposit and or first and last month’s rent.
The report should be checked for a history of bankruptcy. The report will also show payment history for any credit accounts where regular payments are expected. Check for payments to credit cards or revolving credit accounts with merchants. If they are showing green or on time that shows that the applciant pays their obligations regularly. That will give you an idea of how this prospective tenant views payment obligations such as rent.
Personal injury claims and civil lawsuits are reported on some types of reports. If the prospective tenant is local to your area, you can also check that history at your county courthouse. While you are at it, do verify employment and the amount of pay claimed on the application. If there is a previous landlord, call and check the tenant history. Ask specific questions to be sure that you are not calling a friend of the prospective tenant and not the real landlord. Previous landlords can be your best source of information when deciding to turn over your valuable property.
Eviction data is currently not very reliable. Even if the report says that no evictions have happened, it may not reflect the unknown data. If the tenant was served with papers and moved before the eviction date, this information is not reported by the courts because the case was never heard. Many jurisdictions do not report eviction data to the general public. Credit and data bureaus are working hard to change this data void but it may take years to get a reliable eviction report. You can check for evictions in the county in which you own property however in court records.
If you have ordered a report that gives you criminal history, be sure that it shows Felony, Sexual Predator and Homeland Security scans. If not, change your source of reporting. This information has become especially important in the past several years. I also recommend that the report inherently verifies Identity and Social Security number. (Yes, there have been reports of people using someone else’s social security number because they have bad credit.)
Your Application Fee should help you cover the cost of the tenant screening. Typical Application Fees normally range from $30 to $70 and are payable when the application is submitted. In California there is a new law requiring you to show the tenant your charge for tenant screening. (read this law). This fee is to cover the cost of your time and screening and risk management for your properties.
If you decide not to rent to a person because of low credit scores or information you have received when doing your due diligence, you are required by law to provide that person with the name and address of the credit bureau or agency that reported the negative information and or the reason for denial. You must also inform this person that he has a right to obtain a copy of the credit report from that agency by contacting that agency within 60 days of being told that the application was rejected based on the individual’s credit report. (see article) Those forms are built into the library at Smart Property Systems and can be embedded with esign for your protection.
Tenant Screening well done can help you create a quality tenant mix for your properties. You will have tenants who pay rent on time, care for the property and get along with neighbors. It is a necessary part of the tenanting process.
By: Timmi Ryerson, CEO
Smart Property Systems