Property Management Software

Are ADU (Additional Dwelling Unit) Rentals a Good Idea?

Filed Under: Business Management, Property Maintenance, Property Management, Property Management Software, Real Estate Investing, Rental Laws & Taxes

What is an ADU?

An ADU (Additional Dwelling Unit) is a secondary/independent living unit on the same land as a primary residence unit. ADU’s can be attached to a primary residence or detached. It would most likely consist of a kitchen, living area, bathroom and separate room or space for bed.

It’s typically smaller in size and suitable for either a single person or a couple.

Many cities are encouraging developing ADU’s due to a shortage of housing and also rentable units compared to demand for affordable housing.

Government data from the Federal Housing Finance Agency and California Department of Housing and Community Development shows ADU’s are becoming popular.

The number of ADU are growing. Here is data for California:

Growth in Number of ADU Per Year

You can also see the value of properties with ADU is also growing, here is data for California:

Property Value Growth with an ADU on the property.

What Steps Are Required to Create an ADU?

If you want to create an ADU, you should take into consideration the following:

Cost – What kind of funding/loan will you need?
Type of ADU – What type of ADU are you building?
Local Regulation – What type of regulations does your local municipality require?
Design the ADU – Find an architect or designer to create plans.
Permits – Get necessary permits from your local planning authority.
Contractor – you’ll need to hire a licensed contractor, unless you’ll build yourself.
Construct – Get it built and inspected by municipality inspectors.

Cost of ADU

Building an ADU is a significant expense. You should have a good idea of cost before you start. Here are some estimates based on size. The range is determined based on your location and design choices.

Cost and Value of ADU based on size

Type of ADU

There are a variety of types of ADU; you should determine if you can use space in the primary residence to convert it to an ADU or if you have enough space in your lot to construct one.

Here are some of the common types to consider:

  • Detached ADU
  • Attached – addition to main house
  • Garage converted to ADU
  • Basement converted to ADU

Local Regulations Governing ADU’s

You’ll need to contact your local planning authority to understand ADU rules. Some things to consider are:

  • Zoning Laws – Can you build an ADU in your neighborhood?
  • Size limits – What’s the maximum size for an ADU?
  • Setbacks – How much space do you need from your neighbors to where you can place an ADU?
  • Height Restrictions – How high can roofline and ceilings be?
  • Parking – What kind of parking if any do you have to provide?
  • Occupancy – Are there limits to the number of people allowed in ADU? Can it be used for long and short term rental?

Designing the ADU

You will need to find an Architect or Designer you’re comfortable with to come up with plans that meet your cost requirements and also satisfy local regulations.

Permits for an ADU

You and your Architect should set up a meeting with your local planning department to determine what kind of permits you need to start the project.

Typically, you’ll need:

  • Building permit
  • Zoning Approval
  • Site plan approval
  • Utility permits
  • Fire safety compliance

Getting a Contractor to Start Building your ADU

Once you’ve gotten the appropriate permits, you need to start construction. There are two key decisions you need to make. First, will you build yourself or use a contractor? Second, if you use a contractor finding the right one for you.

Make sure your contractor has an up-to-date license.

Constructing an ADU

Once you have started construction, at the end of each stage of the build, get it inspected for approval by the planning department. Typically, different stages where you’ll need an inspection are:

  • Foundation
  • Framing
  • Plumbing
  • Electrical
  • Final Inspection

Inspectors are your friend; getting it approved by them can ensure you’re getting quality work.

Should I Create an ADU from Scratch or Prefab?

One other consideration that can affect costs is should build ADU from scratch or prefab?

Typically, custom construction takes longer and is more expensive. However, you can customize the design to your liking so it better matches the main residence. It also tends to have higher resale value.

Whereas prefab is limited in design, which can make it look more cookie-cutter. It can also have a lower resale value. However, construction can be done faster, and it can also lower costs. Sometimes it’s easier to get a permit as well.

What Are the Costs and Benefits of an ADU?

An ADU can be a great investment. The costs are significant based on the size, location and design choices, as we showed earlier.

There are many benefits, such as:

  • Rental income
  • Property value increase
  • Flexible space for family needs: aging parents, adult children, guest space
  • Affordable housing – Help your community by providing affordable housing.

Should You Consider Section 8 Housing for your ADU?

Section 8 housing means you’re willing to accept low-income tenants where a portion of the rent is paid by the government. There are many advantages and disadvantages to consider.

Advantage:

  • Guaranteed rent payments
  • Larger pool of potential tenants
  • Lessens the risk of rental loss

Disadvantage:

  • Property inspection to meet Section 8 standards
  • Rent must comply with government regulations
  • More government administrative work

Do You Want To Accept Pets in ADU – Is It Pet-Friendly?

Accepting pets in your ADU has many advantages and disadvantages.

Advantage:

  • Larger pool of potential tenants
  • Higher Rent (Pet Fee, Pet Rent)
  • Tenants tend to stay longer

Disadvantage:

  • More property damage
  • Noise issues
  • More cleaning when tenants move out

Should You Make Your ADU a Short-Term Rental?

It can be profitable to have your ADU as a short-term rental (AirBNB) rather than long-term rental. There are many advantages and disadvantages.

Advantages

  • More rental income
  • Flexibility for your own usage of ADU
  • Tenant turnover is easier

Disadvantages

  • Zoning restrictions – Many cities do not allow it.
  • More management – since there is frequent tenant turnover
  • Operating cost – frequent cleaning, furniture, Utilities

How can SimplifyEm help with your ADU?

If you are renting out your ADU. You need software that does an excellent job of:

  • Keeping track of your tenants account and balance
  • Great communication capabilities to stay in touch with your tenant and have everything recorded.
  • Having your records ready for tax time.

SimplifyEm Property Management Software does all of this and is the easiest to use.

Frequently Asked Questions (FAQs) about ADU

  • What is an ADU?

    ADU (Additional Dwelling Unit) is a secondary living space in the lot of a primary residence.

    It can be a detached space or attached (such as a converted garage or basement) as an independent unit consisting of a kitchen, living area with a bedroom space, and bathroom.

  • What are the costs and benefits of an ADU?

    The cost of an ADU consists of permit to build as well construction cost. The factors that affect its cost are size of space, design decisions you make, as well location. It can be very expensive to construct running into several hundred of thousands dollars.

    It provides many benefits and gives you a flexible space to deal with elderly parents, adult children, as well as guests.

    You can also rent it out for income. Having an ADU on a property typically increases property value.

  • Should I consider a Prefab ADU?

    A Prefab ADU is absolutely worth considering. It provides many benefits, such as lower construction costs as well as a faster time to build.

    Some limitations of Prefab are you have less control over design; you can’t have all the design elements you want. It’s limited to whatever is offered by the prefab company.

  • Do ADU’s make an affordable rental?

    ADU tends to be smaller than Single Family homes. So they can make for ideal space for single people or young couples on a limited budget.

  • Can an ADU be used for Section 8 housing?

    You should check with government authorities as to what qualifies for Section 8 housing. Typically, a fully functional ADU can be used for section 8 housing.

    Turning your ADU into Section 8 housing gives you the benefit of a regular rent check from the government. However, you do become subject to government rules on how much rent you can charge as well as filling out government forms and paperwork.

Sources:

https://www.fhfa.gov/blog/statistics/trends-in-median-appraised-value-for-properties-with-accessory-dwelling-units-in-california

https://www.hcd.ca.gov/policy-and-research/accessory-dwelling-units

How To Manage a Pet-Friendly Apartment for Dogs

Filed Under: Property Maintenance, Property Management, Property Management Software

There are 59.8 million dog-owning households in the United States, according to the American Veterinary Medical Association.

So if you don’t accept dogs in your rental property, you are leaving out a lot of potential tenants for your rental property. This can mean not getting maximum profits for your property.

However, if you do accept dogs, you have to deal with the issues that dogs can cause, such as dog odors, stains they can cause, and also the damage they can create to your rental property.

You should clearly communicate maintenance responsibilities with your tenants, and it should be made clear in the lease. There should also be a proactive maintenance plan to deal with damage they can cause.

Pet Deposit for Dogs

You can charge a pet fee or pet rent (non-refundable) to proactively pay for normal wear and tear damage done by dogs.

A pet deposit for dogs is paid upfront and refundable, similar to a security deposit. It safeguards against potential damage done by dogs, such as scratched floors, chewed-up carpets, or stains.

Since it’s refundable if no damage occurs, the money is returned to the tenant.

Problems that Dogs Can Cause: Dog Urine Odor, Dog Stains

Dogs can be joyful companions; they also can introduce challenges to a property. Some common problems are:

  • Dog urine odor
  • Stains on carpets and floors

Dog Urine Odor – When dogs are untrained, they can leave urine on floors and carpets. This can leave a lingering odor that seeps into the house, making it difficult to remove.

Dog Stains – Urine stains, paw prints, and dog scratches can leave permanent spots and marks on flooring, future, and walls. This can lower the value of your rental property.

Solutions to Problems Caused by Dogs – Carpet Cleaner, Urine Smell Remover, Lease Clauses

Now that you know the problems dogs can cause, as a property manager, you should proactively think of solutions such as:

  • Carpet cleaners
  • Urine smell remover
  • Lease clauses for renters

Carpet Cleaner – A high-quality enzyme-based cleaner that breaks down urine molecules rather than just a scent masker is absolutely required. Regular steam cleaning to get rid of stains in carpets should be a regular part of the maintenance plan for your rental property.

What is the Best Carpet Cleaner for Dog Urine?

According to Spruce Pets the best three carpet cleaners to deal with dog stains and urine are:

  • Oxiclean Carpet Stain Remover
  • Kids ‘N’ Pets Instant All-Purpose Stain & Odor Remover
  • Angry Orange Ready-to-Use Citrus Pet Odor Eliminator Spray

Urine Smell Remover – Enzyme-based urine removers are designed to neutralize pet odors at a molecular level. They are effective because they break down the uric acid in urine, which is the main culprit leading to odor.

You can also try home-made natural methods. Mix equal parts white vinegar and water in a spray bottle and spray the area. After cleaning, sprinkle baking soda to absorb urine odor.

Lease Clauses – One of the best things you can do as a landlord is to clearly depict tenant responsibilities in the lease agreement. You should think about lease terms about pet damage, tenant regular maintenance activities such as deep cleaning and proactive repairs for damage done by their dogs. Also consider additional pet rent and pet deposit for damage to be fixed after the tenant moves out.

How can SimplifyEm help if your tenants have Dogs?

SimplifyEm Property Management Software provides key functionalities to manage dogs in a rental property:

Rental lease agreements with E-signature that can have comprehensive lease terms to handle dogs as pets.
Keeping track of rent, pet rent, and pet deposits for accurate tenant bookkeeping
Schedule Task and Work Orders to help you proactively maintain your rental property.

SimplifyEm Task Creation

Frequently Asked Questions (FAQs) – on Managing Dogs in Apartments

  • Should I allow dogs in my rental property?

    The benefits of allowing dogs in your rental property are many:

    • Larger tenant applicant pool: Many renters have pets, so more people will consider your property.
    • Higher rent: Since fewer property managers are willing to accept pets, you can charge pet rent and/or pet fees which increases your income.
    • More likely to stay longer – Since Pet owners have fewer rental options, they are most likely to stay longer.

    The Costs of allowing dogs also have to be considered:

    • Property damage: Dogs are known to create scratch marks, chew through items and leave a lingering odor
    • Noise issues: If you’re managing a multi-unit property, you have to consider the noise dogs can cause which could disturb other tenants.
    • Liability: Dogs can bite someone, which could create legal exposure for you. You should be well insured.
  • What are the properties of an effective carpet cleaner for pet urine?

    A carpet cleaner for pet urine should have the following qualities:

    • Enzyme based formula that can break down uric acid, which causes an unpleasant smell from urine.
    • It should also neutralize odor.
    • Urine can leave a yellow stain, your carpet cleaner should have an oxygen-based or hydrogen peroxide-based stain remover.
    • It should be pet-safe.
  • Is it good to be considered a Pet Friendly Apartment?

    There are many benefits to being considered pet friendly:

    • Larger pool of tenants
    • Ability to charge higher rent
    • Tenant likely to stay longer
    • Potentially more responsible tenants since they are responsible for pets.
    • Helps your property standout in a competitive market

    There are some costs you should consider as well:

    • Property Damage Risk
    • Odor maintenance
    • Noise and liability risks

    •  

    Sources:
    https://www.avma.org/resources-tools/reports-statistics/us-pet-ownership-statistics

    https://www.thesprucepets.com/best-carpet-cleaner-solutions-for-pets-4174466

     

How to Get Rid Of American Cockroaches or German Cockroaches in Your Rental Property

Filed Under: Business Management, Property Maintenance, Property Management, Property Management Software

Roaches can make your rental property less attractive and lower the ROI If it’s a vacant unit, it makes it less attractive and harder to rent.

It’s also a very common problem, according to the US Census Bureau, 14 million homes have reported seeing a roach infestation over a 12 month period.

Here is some data on likelihood of Roach Infestation versus No infestation based on these signs in the home.

Odds of Roach Sighting in US Homes

It’s important to be proactive to prevent infestation, hHowever if you have an infestation, it’s critical to act fast to take care of it. You also need to consider the kind of pest control remedies you’re comfortable with: Do you prefer natural pest control remedies? Do you have pets? Does it have to be pet-safe? Do you want to work with a professional pest control firm, keeping in mind costs?

What are the Characteristics of American and German Cockroaches?

German and American Cockroaches are the two most common types and are the hardest to get rid of according to Orkin. American Cockroaches are ½ inch longer than German Cockroaches. Both types prefer warm and moist locations. The German variety tends to gather in Kitchen and Bathroom, while the American variety prefer basements, drains, and crawl spaces.

The German variety is most common and reproduces quickly. One of the main problems they cause is spreading bacteria wherever they travel.

What Can You Do To Prevent a Roach Infestation?

There are several steps to deal with this effectively:

  1. Regular monitoring to look for infestation
  2. Preventing infestation

Tenant and Property Manager Responsibilities

As a property manager, you should communicate with the tenant on their role and responsibilities and yours in monitoring, preventing, and dealing with infestation. Communicating this upfront will help start your relationship with the tenant on good footing.

1) Regular monitoring – establishing a regular schedule with your tenant for unit inspection, whether it’s weekly, monthly, or quarterly with an inspection form looking for infestation is great practice. Having property management software that includes event based calendaring that automatically setups tasks between your tenant and yourself can help automate this.

2) Preventing Infestation – Roaches are attracted to food sources, water, and dark warm hidden spaces. Incenting your tenant to keep things tidy, especially the kitchen counter should be clear of food debris and damp water. You should be proactive about fixing leaky water pipes. While vinegar doesn’t kill cockroaches, it’s a great repellant and great at preventing infestation.

Getting rid of an infestation, what are roach killer solutions?

How should we proactively deal with infestation? If there is a roach infestation, the tenant should notify you right away, and it should be dealt with immediately. The longer you wait, the harder it becomes to get rid of the infestation. You can try three different types of remedies:

  1. Natural home remedies
  2. Store bought chemical remedies
  3. Hiring a professional pest control firm

One other consideration in all this is that there are pets involved. You want it to be pet friendly.

1) Home remedies are very attractive since they are safer compared to chemical treatment. Baking soda, boric acid, and diatomaceous earth are the most common home remedies. The good thing is Diatomaceous earth is pet safe.

2) Store bought chemical methods are very effective, but its critical safety guidelines are followed if you have pets or children. Some common solutions are Advion cockroach gel bait, Combat roach killing bait, and glue traps. Please read the label carefully if you have pets and children; typically, don’t allow them in the space where you’re sprayed for at least 2 to 4 hours. Make sure anything you place to prevent roaches is not reachable by them if possible.

3) Professional pest control firms can be very effective. If you set up a regular schedule they can prevent an infestation from ever happening. They have access to commercial-grade solutions and treatments. According to Angie’s list, you can expect it to cost anywhere from $100 to $600.

Conclusion

Having a great relationship with your tenant is required so you can take a joint proactive approach to prevent infestation, such as regular monitoring, and a quick action plan to resolve an infestation is key.

You can lower your expenses and maximize your rent by creating a cockroach free environment for your tenant.

Frequently Asked Question on Roach Infestation

    ‘

  • What smells do roaches hate?

    Roaches dislike essential oils such as Tea Tree Oil, Eucalyptus Oil, Lavender Oil, Peppermint Oil, and Rosemary Oil. They also dislike some plants such as Rosemary, Mint, and Chrysanthemum. Some spices and fruit are also natural repellants, such as cinnamon, lemons, and oranges. So having these around could be a great way to discourage roaches.

  • How long can roaches live without food?

    Cockroaches can live for a month without food. So you should regularly clean your kitchen counter.

  • How long can roaches live without water?

    Cockroaches can live for up to 12 days without water. So making sure you have water drops in your kitchen and bathroom and fixing leaking faucets is key to preventing infestation.

  • Will bleach kill roaches?

    While you can drown a cockroach in bleach. It’s not the best solution since it’s harmful to humans and pets. There are more natural, safer solutions, like baking soda.

Sources:
https://www.orkin.com/pests/cockroaches/german-cockroaches/german-cockroach-vs-american-cockroach

https://www.angi.com/articles/how-much-does-cockroach-extermination-cost.htm

https://www.census.gov/library/stories/2021/04/how-many-american-homes-have-pests.html

How To Get Rid of Ants in Your Rental House or Apartment

Filed Under: Business Management, Property Management, Property Management Software

As a property manager, it’s never pleasant to get a call from your tenant that there is an ant infestation in your rental property. Ant infestations can happen suddenly and grow fast.

They are irritating for your tenants and also can cause problems for you. Ants are known to contaminate food; they can even damage wiring and electronics.

What Types of ants Commonly Affect Houses?

According to the University of California, there are various common types of ants that can invade a house. Here are a few of the common types:

Types of Ants and Their Characteristics

While some varieties live outdoors, they will come inside the house for food and take it back to their ant colony. As you can see, the most common types of food you need to store away securely are Sweets, Fats, Greasy Foods, and Proteins.

Why Do You Have Ants in Your House?

Ants need food and water just like us.. The most likely cause is that your rental property has water they need or the food they’re attracted to is too accessible to them. Here are five things to watch out for:

  1. You have sugary foods accessible to them. A great way to take care of this is to keep the kitchen clean and use sealed containers they can not access.
  2. Make sure greasy surfaces are cleaned up in the kitchen counter, stove top, and garbage container.
  3. Ants need water. So you should clean up water spills and fix leaky faucets and pipes.
  4. Decaying wood is the perfect hideout for ants. Whether it’s a wood pile next to your house and dry wood siding, this is something to watch out for.
  5. Finally, look at how they can enter your house from outside and seal them. Window, Door, or cracks in your foundation.

What Can I Do to Prevent an Ant Infestation?

Now that you know what attracts ants to your property, there are simple strategies you can implement with your tenants to prevent an infestation:

  1. Get rid of their food supply – make sure you clean up your kitchen regularly, so there is nothing sweet available and all grease has been wiped down.
  2. Get rid of their water supply – promptly pick up any water spills, fix leaky pipes and faucets, and do not leave water accessible to them.
  3. Close of entry points – check the exterior of your property for cracks and holes and seal them.

There are also natural repellents that discourage ants that you can use to discourage ants:

Borax is used as a cleaning product and insect repellent. You should be careful and follow safety instructions. It can be harmful to children and pets.

  • Diatomaceous Earth dries out the oils in an ants body. But it can be an irritant, so do wear gloves and a mask when handling it.
  • Glass cleaner has an odor that removes the scent that ants use to get to food sources.
  • Red or black pepper is a natural deterrent since ants find the smell irritating.
  • Peppermint oil helps repel red ants. But be careful around cats.
  • Citrus fruit or Citrus Oils also helps repel and kill ants.
  • Vinegar mixed with water as a cleaning solution is effective. Ants do not like the smell of vinegar, so it acts as a deterrent.

How Do I Get Rid of Ants? Are Ant Sprays Effective? How do Ant Traps Work?

You can always go to your retail store for chemical spray and Bait Trap. There are popular sprays such as from Raid that are effective. But be careful because some of the chemicals can be harmful if you inhale or eat. So carefully monitor your children and pets.

If you have a carpenter ant infestation, you are probably looking for the best carpenter ant bait, to get off them. Bait traps work by attracting them, and the ants then take harmful chemicals back to the ant colony, which gets rid of the ants.

You can always use a professional pest control firm. According to Angie’s list, that can cost anywhere between $80 to $500 based on infestation size.

Conclusion

Ants can disturb your tenants’ experience with your rental property. Both you as the property manager and your tenant have a role to play in preventing an issue. The best way is to know what attracts ants and keep them away from your house.

Frequently Asked Questions on Ant Infestation

  • What Smells Do Ants Hate?

    Ants typically don’t like the smell of citrus fruits, peppermint oil, lavender, black or red pepper. A great way to prevent an infestation, which could require using harsh chemicals, is to create a repellent for ants by making sure these fragrances are in your home.

  • Does Vinegar Kill Ants?

    Vinegar does not kill ants. But by having vinegar, it neutralizes the smells ants use to get back to their colonies and lessens the infestation.

  • Does Cornmeal Kill Ants?

    Cornmeal does not kill ants, but is helpful. Cornmeal if eaten by ants is not digestible. So they can starve to death if they eat no other food. But only if that is most of their food. If they eat other things, this is less effective.

 

Sources:
https://www.orkin.com/pests/ants

https://ipm.ucanr.edu/m/pn7411-3.html

https://www.angi.com/articles/how-much-does-it-cost-get-rid-ants.htm

https://www.census.gov/library/stories/2021/04/how-many-american-homes-have-pests.html

 

How to Prevent Mice in Your Rental Property

Filed Under: Business Management, Property Management, Property Management Software

One of the most unpleasant calls you can get from your tenant as a property manager is that there are mice in the property. To get rid of mice and prevent them from appearing again, it requires teamwork from both of you.

It’s also a very common problem, according to the US Census Bureau, 14.8 million homes have reported seeing a roach infestation over a 12 month period.

Here is some data on likelihood of Rodent Infestation versus No infestation based on these signs in the home.

Rodent Sightings U.S Homes

It requires preventive measures, such as a mouse repellent strategy that makes the rental property less inviting. If there are mice already in the property, there is a solution to get rid of the mice already there.

What Causes Mice in the Property?

Especially during cooler months, mice look for warmth. So the risk is higher during the autumn and winter time. If you have cracks and openings in your house through the wall, window, basement, foundation or attic, you are more likely to invite mice.

Also, if you have good nesting material such as insulation, cotton, or feather in a pillow that is also attractive.

Finally, food is the other reason for mice to enter your house. Things such as unsealed pet food, open garbage cans, or just open food containers are very attractive to mice.

What Are Natural Repellents for Mice?

First, do all the obvious things. Seal entries into your. Inspect your house for cracks and openings to seal.

Get rid of food sources, by putting all food away in metal or heavy plastic containers. If it’s a paper container or light plastic, mice will be able to get in and get the food supply.

There are smells mice hate, such as peppermint oil, cayenne pepper, and cloves. Try to infuse those fragrances throughout the house.

Other smells that mice hate are smells of cat urine and urine of other predators. You can mimic this with ammonia, if you want a stronger smelling solution.

Other ways to get rid of mice? What is the best mouse bait?

Simple traps like a ‘snap trap’ with the best mouse bait peanut butter work, but obviously they are messy. Typically, it involves a quicker demise for the mice without longer suffering.

There are also electric traps that kill mice with electric shocks. They are effective but can be expensive.

There are also sticky glue mouse traps, but mice can learn to avoid them over time.

You can also use store bought chemical solutions and take precaution when using them around children and pets.

Finally, you can always use a professional pest control service, according to Angie’s list, that can cost from $180 to $600 but can be effective. But it can vary based on the size of your house.

Cost of Mouse Prevention

Conclusion

Mice once they infiltrate are hard to get rid of. The best strategy is to seal your house so it’s hard for them to enter. Also, don’t provide any food or shelter source for them.

Frequently Asked Questions on Mice Prevention

  • What smells do mice hate?

    Mice are known to hate smells like peppermint, clover, and Cayenne pepper. They also hate the smell of Ammonia, since it smells similar to cat urine.

  • How long can mice live without food?

    Mice can survive 2 to 4 days without food. So if you eliminate their food sources, it’s a very effective mouse repellant strategy.

  • Do mice learn to avoid mouse traps?

    Mice will learn over time to avoid traps. At first, it’ll be new for them, but over time they learn.

Sources:

https://www.orkin.com/pests/rodents/mouse-control/mouse-deterrents

https://www.fixr.com/costs/mouse-exterminator

https://www.census.gov/library/stories/2021/04/how-many-american-homes-have-pests.html

Why is tenant management so important for the success of your rental property business?

Filed Under: Property Management, Property Management Software, Tenant Management

Did you know tenant management is one of the most critical factors that determine your rental property’s profitability? If you can find, attract, and manage great tenants that pay on time and stay for a long period of time. You’ll reduce vacancy rates, ensure timely payments, and improve your bottom line.

Optimizing Revenue

Having a satisfied tenant and a well-maintained property influences revenue generated by the property.

    • It minimizes vacancy by having a tenant satisfied with the property, the maintenance issues, and good and responsive communication with the property manager. Minimizing vacancy is critical to having a property earning maximum income.
    • By having a well-maintained property with a great reputation, you can attract premium tenants that are willing to pay market rates or above to get a residence they’re proud of.

Proven strategies for managing tenants effectively

  1. Efficient Rent Collection Process

    Make it easy for your tenants to pay rent and on time. According to Fox Business Reports, ~87% of tenants pay their rent on time, so it’s imperative to stay on top of rent collection. You can make it easier by:

    • Providing multiple easy and convenient ways to pay rent can help with collections. Online rent collection from the bank and via credit card versus mailing a check is much more convenient for your tenant.
    • It should be clear to the tenant when the rent is due. The more methods you can keep them informed, the better: online accounts, emails, and SMS. The more automated you can make the process for yourself via software, the better.
    • It should be clearly communicated how late fees on late rent will be calculated to the tenant. So they are incentivized to pay on time.
    • Timely and professional communication with your tenants about rent collection, such as timely rental invoice, rent receipt, late rent notices as appropriate.

  2. Maintaining property value

    Having a property occupied by quality tenants is critical in the upkeep of property. Making sure you’re on top of all maintenance and repair issues as required can prevent a major property repair by dealing with it when it’s minor. Staying on top of maintenance is a great way to ensure you keep quality tenants.

    • The condition and appearance of the property is the first impression and the best way to attract the attention of the best tenants.
    • Whether you’re using a property management company nearby or managing the property yourself, being proactive on maintenance and treating key repairs as a priority.
    • Having your property occupied with market or above rent is a key determinant in the value of your property since it increases the profit margin for the property. So have a proactive maintenance plan so that your tenants are satisfied and stay long-term.

  3. Sign a comprehensive Lease Agreement

    Signing a comprehensive lease is the best way to protect yourself from legal problems down the line. It also assures your tenant that you’re thorough and well organized. The lease should be clear on its terms for duration, rent payment, and responsibilities of each party (the property manager and tenants). It should also abide by all real estate rental laws of your state and city.

    • You should have an attorney-approved lease that is valid for your city/state. It should at a minimum define the:
        • Duration
        • Monthly rent payment amounts, due date, delivery of payment
        • Security deposit
        • Occupation Limits
        • Premise Address and Property Description
        • Pet Policy
        • Assignment and subletting rules
        • Tenant and landlord responsibilities
        • Rent increase clause if appropriate
        • Break and Lease Termination (how to get out of a lease)
        • Legal Costs
        • Insurance responsibilities (renters insurance, general liability insurance)
        • Other payment responsibilities (utilities, minor repairs)
        • Rental Agreement Disclosures
        • How does renewal of lease work?
        • other payment responsibilities, move-out terms, liability
    • Sign longer-term leases. Sometimes it’s better to sign a long-term lease to minimize tenant turnover over the long term. This minimizes the costs with finding new tenants. Here are some statistics on the lease duration in the United States, according to the US Bureau of Labor Statistics:
        • 59.6% of leases are 12 months in length.
        • 31.8% of leases are month to month.
        • 8.6% are other durations (with the leading duration of other being 24-month leases).
    • Having an online lease with an E-signature is very helpful in establishing the lease with thorough proof of agreement by both parties.

  4. Reduce Vacancies

    Besides how much rent you charge, the most important factor in the profitability of your property is minimizing vacancy time. According to the US Census Bureau, the vacancy rate in the US is ~6.9%, which can vary based on your region.

    • Make sure you have a thorough tenant screening process to get tenants that are responsible and pay their rent on time.
    • A key factor in a tenant staying is maintenance of the property and communication with the tenant. Keep the tenant informed about all key information related to the property and also their maintenance requests.

How to simplify tenant management with SimplifyEm Property Management Software?

Simplifyem can help you as a property manager with this key activity of managing your tenants. We provide all the tools and services you need to excel!

  1. Start advertising your Rental Listing through SimplifyEm to get the best rental applicants.
  2. Perform Tenant Screening and get credit, criminal, and eviction history on your potential tenants.
  3. E-sign an attorney-approved lease provided with SimplifyEm or Upload your own company lease. We’ll be able to email your tenants for review and E-signature and it’s legally enforceable. SimplifyEm Lease Form
  4. Set up online rent payments to make it easy for your tenant to pay rent directly from their bank account via the ACH network or through credit card Payments. The money gets deposited directly into your bank account, and the rent is recorded for you within SimplifyEm so your financial records are up to date.
  5. Require Renter Insurance for your tenants so you can be sure they are well insured to lower your risk and liability.
  6. Keep track of exactly what your tenants haven’t paid. So if you ever have to evict a tenant, you have bulletproof records. SimplifyEm Rent Payment History
  7. Professional reports for your tenants with tenant invoices, rent receipts, and late rent notices that can be created and sent with the click of a button via email or SMS. Everything can be automated for you so you don’t have to do anything. SimplifyEm Automation Center
  8. A communication hub for you to see all email, SMS, and phone calls from/to tenants available on your computer and also on your phone via our mobile app.

 

Frequently Asked Questions – FAQs

  • What is tenant management, and why does it matter?

    Tenant management is the process of attracting and retaining tenants for your rental property. This involves thorough tenant screening, signing a comprehensive lease, collecting and tracking rents, communicating and handling maintenance issues for tenants, and a thorough move-out process.

  • How does tenant management impact property maintenance?

    Property maintenance is affected by great communication with tenants to understand property issues and having responsible tenants.

  • Can poor tenant management lead to financial losses?

    One of the biggest factors in rental property performance is non-payment of rent by a tenant and extended vacancy. Both are affected by attracting and finding the right tenant for your property.

  • How does tenant screening play a role in tenant management?

    Nearly a quarter of evictions (23.8%) were filed for tenants that had submitted fraudulent information on their rental applications. Effective tenant screening is the first step in tenant management.

  • How does tenant management improve cash flow?

    The biggest negative impact on cash flow is having a vacant unit, lots of maintenance issues, and charging below-market rent. The best way to avoid that is to find a trustworthy tenant that will love the property and stay for the long term.

  • How do I get started with improving tenant management?

    To improve your tenant management process, look at all phases: tenant screening, rent collection, tenant communication, and property maintenance and work on improving on ‘low hanging fruit’.

Sources:

  1. https://www.bls.gov/spotlight/2022/housing-leases-in-the-u-s-rental-market/home.htm
  2. https://www.census.gov/housing/hvs/files/currenthvspress.pdf
  3. https://www.foxbusiness.com/economy/tenants-still-paying-rent-as-government-funding-dwindles
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