Renting out properties brings a lot of profit. In 2019 alone, iProperty Management’s study says that vacation rental revenue reached $87.09 billion. Clearly, this is a huge number. The demand for rental properties may have plummeted early this year due to the pandemic, but the industry is now slowly bouncing back. As per PR Newswire, marketplaces like Airbnb and Vrbo have reported that their bookings are already at 81% of their 2019 levels.
But like any other kind of business, owning a property rental also comes with a challenge. Property management is not a walk in the park, regardless of how long you have been in the industry. Property managers face different types of issues, from unreliable tenants to emergency maintenance requests. They must also calculate cash on cash return and determine if the rental is producing positive cash flow.
To make things easier, we’ve listed down some digital property management tools you can use.
Online Tenant Applications
When considering accepting a new tenant, you should always have them complete a comprehensive application process. Whether you’re renting out your property on a short- or long-term basis, this form is something you shouldn’t forget. With it, you’ll get to know more about your prospective tenants. It gives you sufficient information about their background, credit history, references, emergency contacts, and more.
Since people are now more accustomed to doing things online, it also makes sense to use online tenant application forms. There are many benefits to this. For one, having an online application tool set up on your website assures your tenants that their data will stay secure. It also reduces bias because everyone applying to be a tenant can be sure that they will be asked similar questions. Also, when an applicant fills out your online form, you can easily confirm the information via a phone call or email. You may even cross-check their provided data online. Plus, the biggest advantage is that online applications are easier and more efficient to document.
Check out these sites wherein you can create your custom online tenant application:
Digital Rent Payment Methods
The advancement of technology has made everything possible, even paying cashless. Gone are the days when you had to rush to the nearest bank just to withdraw cash. Today, you can pay using your credit or debit cards or directly from your laptop or smartphone. Paying online is convenient not only for your tenants, but also for you, the landlord.
By setting up an autopay option, tenants can make sure they’ll be able to pay on time and avoid late charges. You can also see your payment history and other records of payments in real-time. A consistent good paying history can also improve your credit score. Moreover, using online payments reduces the risk of check fraud and theft.
Property managers already have a lot on their plates, from taking care of any needed repairs to computing cash on cash return for rental property. Setting up an online payment scheme helps you save time and money. This method is also flexible. In case you’ll be going on an important trip and cannot collect payment in person, your tenant can just do an online transfer. There are also online analytical tools that can help you keep track of your tenants’ payments, requirements, and preferences.
These are the most popular direct money transfer applications you and your tenants can use:
In addition, you can also use programs that are dedicated solely to rent collection. Tenants can use their credit or debit cards or opt for electronic funds transfer from their bank accounts through these applications:
Cash Flow Calculators
Cash flow is simply defined as the money left over after all the charges on a rental property are paid. We’re not only talking about the rent and the maintenance fees. These expenses include emergency repairs, vacancies, and more. Another factor to consider is if you obtained funds from private investors instead of lending institutions. They may require cash on cash return private equity details to know if your property is profitable. So, computing your cash flow correctly will help them see whether they have made the right decision to invest in your property or not.
Failure to add these items up in your cash flow computation may result in you spending what’s supposed to be money you’re generating. Here’s an ideal formula on how to compute your rental property’s cash flow:
- Identify the property’s gross income.
- Subtract all the costs relating to the property.
- If there’s any debt service relating to the property, deduct it as well.
- The balance you get is your property’s cash flow.
There are two reasons why you must keep track of your cash flow. The first reason is to check if you are indeed generating extra money. The second one is to make sure that you have money to pay for your property’s expenses. This applies to investors who have plans of selling their property in the future. A cash on cash return rental calculator can help you evaluate the current or future profitability of your property.
The importance of cash flow really boils down to your main goal. Do you want your property to gain a huge appreciation? Or, do you want to earn more money out of your rental property so you can retire early?
Investing in real estate is not a “one size fits all” solution. Once you’re clear in determining your purpose, formulating cash flow strategies will easily follow.
Communication Platforms
The backbone of any kind of relationship is communication. This is also applicable in managing a rental property. Without communication, there will be no trust. And a relationship without trust will just open doors for disagreements between parties. This is something we don’t want to end up with.
Establishing good communication with your tenant allows you to solve problems promptly or even prevent them from happening in the first place. It also protects you legally.
Now, thanks to the latest technology updates, you’ll have no problems communicating with your tenants. Aside from email, text messaging, and messaging apps, there are a bunch of other online communication platforms available.
It’s time to take advantage of the online trend. Most people nowadays are glued to their mobile phones, either updating their Instagram stories or posting updates on Facebook. If there’s a need to communicate with your tenants, they’ll surely see your message right away if you opt to use online platforms. Also, they are more likely to respond because they are already online.
Digital communication platforms are easy to use. Plus, you get to save your conversations on these applications. In case there is any conflict in the future, at least you can easily go back to your conversations and find some proof, if needed.
However, depending on your tenants, using online communication platforms may or may not be comfortable for them. The best thing to do is to first get consent from them before using these applications.
Here are the online communication platforms that you can use:
- Facebook Messenger
- Skype
- Zoom
- Verizon Messages
- Discord
- Telegram
- Google Hangouts
- Viber
- KakaoTalk
Property Maintenance Software
Lastly, a tool that should not be missing in your rental property management arsenal is property maintenance software. We all know how essential it is to maintain our rental properties. Maintenance helps prevent major problems by fixing minor issues early on.
A well-maintained property also attracts potential tenants or guests. Do you know that one of the major reasons why tenants leave is due to lack of maintenance? People will love to stay if your property remains in good shape.
Another advantage of regular maintenance is that it increases the value of your property. Should you decide to sell it in the future, you can put a high price on it. The profitability of your rental property can be determined through cash on cash return property metrics.
A property maintenance software is created to help landlords get through their day while managing their rental properties. Aside from tracking maintenance tasks, these programs also serve as a reminder regarding rent collection or a guide when you need to calculate cash on cash return. When you streamline your operations, you’ll keep your tenants and guests satisfied—guaranteed!
Take a look at some of our recommendations:
- OnUpKeep
- Appfolio
- Buildium
- Yardi Voyager
- ResMan
- Rent Manager
- Condo Control
- Building Engines
- RealPage
- RentRedi
Conclusion
Managing a rental property is not an easy task. Most landlords can’t even be present at the property itself all the time. Thankfully, technological innovations have made property management a lot easier. You can now create tenant applications, make cashless transactions, communicate with tenants, calculate cash on cash return, and even track all maintenance needs remotely. With the right tools, you can manage your rental property with ease no matter where you are in the world.
Learn how the property industry can take advantage of technology more by browsing our website!
