by Phoebe Chongchua
Friday, June 29, 2012
If you’re a landlord of one rental, or a few units, you’re likely always looking for ways to handle your property more efficiently. Things like finding tenants and best practices for collecting rent are often top areas of concern.
So, even if you’re managing a few rental properties, or just one, keep in mind that you still have to operate them following the law.
Tip 1: Know how to turn down a rental applicant.
Be sure that you’re screening your prospective tenants very carefully. Look at their past rental history. Review and call their references. Screening can be a complicated process so getting expert help is recommended. Even landlords who have just a few units will use property management companies to help ease the burden of managing properties and bringing in new tenants.
Not if, but when, you have to turn away an applicant, be sure that you comply with the Federal Fair Credit Reporting Act (FCRA). Note, that FCRA states that it “requires landlords who deny a lease based on information in the applicant's consumer report to provide the applicant with an adverse action notice.” Learn more at Business.FTC.gov.
Tip 2: Update tenant information yearly.
If you have gone to the doctor lately, you’ll recall that doctor’s offices will ask for an update of your personal and contact information. They’re checking to see what changes have occurred since you were last seen.
As a landlord, that’s exactly what you need to do, too. Many problems happen when landlords have outdated information. They’re simply relying on the original application that the tenant filled out which could have been months or even several years old.
Have forms ready for your tenant to update and send them out at least once a year, maybe even twice a year. If you make this a standard business operation, you’ll find when the time comes to use the information, it’ll be a relief that you have it all in order.
Tip 3: Simplify the rent collection process.
This is an area that landlords often avoid because they think it will be a big time-consuming system to put in place. Fortunately, there are companies that are trying to simplify the online rent collection process.
"About 52 percent of the marketplace today, of roughly 40-million rental units, is single-family homes," explained President and COO, Jeff Golding of WilliamPaid.com He added that about 70 percent of the marketplace is dominated by landlords who own and operate 10 units or less.
"So these landlords aren't going to build and invest in the infrastructure to offer the convenience of online payments or taking credit cards–they don't want to become merchants," said Golding.
By using WilliamPaid, renters get flexibility and convenience that allows them to pay their rent online. Golding says that renters can also "mix and match" where their rental funds come from. "[For instance,] using a bank draft as well as a credit card."
Using a credit card to pay rent is becoming more popular, not so much because renters are wanting to carry a rental balance, but because they want to capitalize on credit card rewards programs to achieve different bonus levels from the credit card companies
For landlords, allowing tenants to have multiple sources of payment for rent and an online recurring payment plan set up acts as an extra layer of protection.
"Providing additional payment sources can help ensure that the rent is being paid in full, on time, and month after month. [Landlords] don't have to worry about the forgetful tenant who forgets to write the check."
To learn more about online rent collection, visit WilliamPaid.com
Regardless of whether you have been a landlord for years or are new to the job, staying informed and simplifying your rental business will allow you to enjoy being a landlord rather than feeling like you’re constantly on the job 24/7.
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