The property management office was off the main drag in the tiny Midwestern town I moved to more years ago than I care to remember. The squat building in an otherwise barren lot wasn't inviting, but then that probably cut down on overhead. I remember commenting to the middle-aged woman at a black, no-nonsense metal desk that it must be a lonely job, waiting for folks to pick up rental forms, fill them in and then drop them back off in exchange for a set of keys. The clerk said she didn't mind the empty hours and she never feared trouble because she had, as she put it, “my equalizer in the desk drawer.”
Property management back then wasn't heavy on documentation. No one reviewed my credit score. While there was a bit of small print on the lease, the entire document barely filled two pages. I don't remember anyone coming to inspect the unit before I moved out. And yet, years ago, landlords with even minimal holdings had expenses such as office staff, telephones and fax machines.
My, how times have changed. Leases are a lot longer. Tenants these days expect to be put through a background check. Landlords rely on the internet to market their units, track applicants, create leases and funnel rent payments to their banks. And their ”office” is wherever they can use their cellphone and laptop.
Technology has cut overhead and shifted record-keeping from piles of paper to management software, lease form automation and cloud-based storage. Understanding and making the most of these new tools will allow you to delegate some of the many tasks on your landlord to-do list.
Email is the new social security number
One hugely convenient technology improvement is the ability to scrutinize tenant applicants entirely online. Landlords no longer have to hand out paper forms and then ask for sensitive applicant information, such as social security numbers, in order to delve into a potential tenant's background; and they don't have to collect an application fee to cover the cost of a background check.
Instead, the landlord can submit an applicant's name and address to a screening service, indicate that the applicant will pay the fee, and leave the identity verification to the experts.
The internet has dramatically reduced the amount of money-handling landlords must do in leasing situations. Numerous agencies now provide services that allow tenants to make online payments, removing the need for the landlord to pick up rent checks or wait for them to be mailed. Most services charge a fee that covers such benefits as payment processing, email reminders to tenants, and the ability to schedule recurring deposits and automatically add late fees. Banks have made it easy for landlords to accept online rent payments, too. For landlords who don't have a separate bank account set aside for handling rent payments, there's always PayPal or a bill-paying service that the tenant sets up through his or her own bank.
As for tenants, they expect to be able to search for rentals online nowadays, according to technology news publisher, TechCrunch.com. So, if you still list your ad in the local newspaper, make sure the paper also posts the ad on its web site, or consider supplementing the ad with your own notice on Zillow, Craigslist or other rental listing site.
“Not many renters, after all, are still leafing through newspaper classifieds in 2016. This has created the expectation for easier online interfaces on the professional side, as well — and made calling or faxing rental contracts and leasing information seem increasingly dated,” TechCrunch.com notes.
Also plentiful on the internet are calculators – another must-have tool for property investors who want to know the return on their investment. Most online calculators direct you to fill in simple fields and then they churn out numbers that you can use to decide whether it makes financial sense to buy a particular rental property. Calculators also are available to help you decide whether a specific improvement at your rental property can be expected to result in higher rental income.
Investigate new property management tech tools before using them
As helpful as time-saving technology is, you'll want to check out services that have recently hit the market before you use them for the first time. Ask questions of the service provider, find out if the service comes with guarantees, and make sure its use is legally permitted.
Landlords must follow federal privacy laws – specifically the Fair Credit Reporting Act (FCRA) – when delving into tenant applicants' backgrounds and must adhere to federal Fair Housing Act (FHA) guidelines in rejecting tenant applicants. What is still being tested is how those laws might apply to information that is publicly available on such social media sites as Facebook.
When the UK-based company Source Assured announced it would launch its new service, Tenant Assured, this summer, it appeared that landlords would have yet another online source for an applicant's background. The service reportedly allows landlords to ask tenant applicants to supply access information to their social media accounts, such as Facebook, Twitter and LinkedIn. Tenant Assured promises to comb the tenant applicant's posts for terms that will be used to compile a report on the tenant. However, the company hasn't revealed exactly how information is used to develop a background report. And, it apparently leaves it to landlords to decide which data in the report may be used to make a leasing decision. Some legal rights groups are questioning if the service will violate FCRA and FHA guidelines and are urging landlords to steer clear, while Source Assured claims that information that is collected is done so with applicants' permission.
Landlords must be careful with advertising and selecting tenants even when they're using established sites such as Craigslist, which has been connecting landlords with potential tenants since 1995. A Canadian landlord faced problems when his Craigslist ad specified “Asian only” applicants. Although using that term in the ad may not have broken a law, it did offend some applicants and the landlord could have been cited for refusing to rent to someone who was not Asian.
Ultimately, it is the landlord's responsibility to know what is and is not legally permitted in searching for tenants.
Technology for handling rentals is sure to continue evolving with tools and services that streamline property management. With the population of those who occupy rentals predicted to increase by 4.2 million by 2025, there is sure to be a market for breakthrough services.
Owners of New York City's real estate management giant, Rudin Management Co., have just launched
Prescriptive Data, LLC, an operating system that was built to serve as a building's brain, the Wall Street Journal reports.
“The system analyzes information including elevator use, occupancy, electric demand, weather and indoor temperatures, and recommends ways in real time to decrease energy use and costs—an estimated average savings of 50 cents a square foot for landlords,” the Journal states.
Doubtless, there are will come a day when an investor can buy a rental and enter its details into a site that will automate the tenant search, write the lease and collect the rent without the landlord ever having to speak to anyone or sign a document. Maybe tenant applicants will someday have to confirm their identity using biometrics like iris recognition.
Meanwhile, there are tools and services that you can use now to lighten your load. There is a wealth of information, available for free, online. And you don't have to ask your secretary to type it up for you.