Scared of Property Management? Try These Technologies for Buy-and-Hold Real Estate Investors
There are many ways to invest in real estate. While the fix-and-flip strategy gets a lot of attention on TV shows because of the dramatic visual results and lump-sum profits it creates, buy-and-hold projects can be just as profitable in the long term and can be a great option for those looking to build income producing assets. . . but is the workload of managing the property too scary to get started?
The two most important factors for success when getting started in buy-and-hold investing are getting the money right so you don’t tie up all your assets, and making sure the property management is not going to be overwhelming for you. In addition to being a real estate investor, you or someone on your team will also be a landlord!
There is a lot to juggle when it comes to being a landlord. From keeping units leased to handling tenant requests, the struggle is only magnified for landlords who own more than one property. However, today’s property owners have access to technologies that can help streamline their businesses and save time and money in the long run. Leaning on technology to help with property management is a smart way to reduce costs and labor.
Get Into the Cloud
It was not that long ago that property managers had to keep mountains of paperwork within reach to accomplish daily tasks. From leasing to a new tenant to assigning maintenance tasks and collecting rent, every activity came with its own set of paperwork. Today, landlords and tenants can benefit from utilizing cloud services.
The leasing process can be a hassle, especially when juggling schedules and trying to arrange times to meet, sign leases, and exchange paperwork. Instead, all of this can be completed by both the landlord and the tenant with electronic document transfers and signings. This also eliminates the need for large file cabinets to store physical paperwork!
Managing maintenance records is critical, especially for landlords who juggle multiple buildings and need to ensure their properties are up to code at all times. By keeping these records in the cloud, not only will these documents be available at the touch of a button, but it will be simple to see the entire history of a single unit or the whole building. Plus, landlords will also have access to warranties, contractor information, and other contacts that will make big projects easier to manage and everyday tasks simple and effective.
There are many cloud storage services available depending on your needs. Dropbox is a popular service for storing all types of files, while HelloSign is a web-based service specifically geared towards contract and lease electronic signing. Take some time to research which service meets your needs.
Process Payments Online
When given the option, most tenants will probably prefer to make rent payments online to save the hassle of filling out a check and bringing it to a physical office. Many software packages make it easy to accept online payments and also come with a host of other benefits that make life easier for both renters and their landlords.
For example, tenants can easily see their payment history and discrepancies will be easier to reconcile when cash and paper checks are not in the mix. Some software packages also allow tenants to make requests directly from an online portal, making it easier to report issues such as burned out bulbs in common areas and broken fixtures within a unit. These requests can often be dispatched directly to maintenance personnel, and updates can be logged directly so everyone can see when tasks are completed.
While usually requiring a processing fee, it’s a small price to pay for services like automatic invoicing, direct deposit, late notices, and credit processing. Popular services include Avail and Cozy but there are many options out there.
Easier Phone Management
Every landlord knows the job comes with those middle-of-the-night phone calls and being available 24/7 can be exhausting. Most landlords also do not have a substantial call volume to justify their call centers, but that doesn’t mean that they’re on their own. By using the technology provided from services such as Ring Central or Google Voice, landlords can create a virtual call center by routing calls to different people depending on the need. That way, tenants only need to have one contact number to remember, and landlords can have a break from answering their phones from time to time. As your team grows, these features will be very valuable.
Marketing Made Easy
Advertising available space is one of the most critical tasks for a landlord as keeping vacancy rates low will ensure that cash is always flowing. Apps such as Trulia and Zillow make it easier than ever to market available units and include everything that a prospective tenant is searching for, including photos, amenities, location, schools, and more. Landlords can simplify the process even more by adding links to schedule showings and online application portals directly in the listing. That way, there’s less time spent exchanging the same information with multiple prospective renters and more time spent with those who are genuinely interested and qualified for the unit.
Outsourced Property Management
Managing rental units has never been easier for landlords. However, for some who do not have many buildings or units to keep track of, investing in technology may seem like it’s not worth the added expense. But for those who do own multiple properties, using the services of a full-stack property management company equipped with the latest technology might be the best solution. Most offer portals specifically for landlords to check in and keep an eye on their properties while still offering all the management benefits that these companies provide.
Finding the right service can save you a lot of time and effort. Take the time to shop around for the best property manager for your portfolio and take into account how involved you want to be and how high maintenance your properties are. Incorporate the management costs into your budget calculations to make sure you’re still profitable.
Vacation/Short Term Rental Management
At the far end of high maintenance renting is the vacation or short term market. If your property is in a highly desired area for vacationers, you might be able to make even more money on short term rentals than you would a year long lease. The downside of this is the constant arrangement making, payment processing, and cleaning fees in between guests.
Technology Makes Buy-and-Hold More Realistic for Large Portfolios
As a buy-and-hold investor, you increase your profits by adding doors to your portfolio. This is great for your bottom line as more and more rent checks start to be deposited, but it also multiplies the amount of management work to be done. Modern investors can rely on technology services to keep this side of the business under control and under budget.