New landlords and property managers face many challenges.
In your first years of managing your properties, you may experience vacancies, revenue loss, tax trouble, maintenance headaches, or other problems.
These are typical of landlords of any type. Managing properties requires a flexible mindset and willingness to apply your ideas in novel ways.
In many cases, technology can mitigate or solve many landlord challenges of the past decade. Digital solutions are increasingly commonplace in rental property management. For example, property management software allows landlords to automate and streamline the application process, tenant database, and financials.
Here are five common property management challenges and how to solve them with property management software.
Every rental business will experience vacancies. Whether your units lie vacant for a few months or years, vacancies have many consequences for your business.
First, every month a unit lies vacant is a month’s worth of lost revenue. This means less profit and less disposable income to dedicate to new projects. While vacancies might make you attractive in a competitive town, too many could deter prospective renters from looking for a trustworthy company.
To avoid vacancies, look for a property management software platform with listing syndication software. This feature allows landlords to write a listing and post it to multiple listing sites at once, usually including Zillow, Apartments.com, Realtor.com, or others.
Depending on the platform, you may have to pay extra to use listing syndication. However, this feature is well worth the price. Listing syndication helps you spread the word about your open unit faster so you can fill it as fast as possible.
- Skipped Late Fees
Consider this scenario: your tenant’s rent is late. The deadline has passed, so you notify the tenant that they’ve incurred a late fee on their bill. The tenant drops off their payment in your mailbox the next day. Problem solved, right? Except the payment is only the original amount—no late fee.
Is it worth pursuing the tenant to chase down the late fee? Many landlords don’t. However, allowing your tenants to skip late fees teaches them that you don’t enforce lease policies and the rent deadline is optional.
Instead, enforce late payments on property management software. With online rent collection, you can customize your late fee infrastructure by assigning a flat or percentage fee, designating a grace period, and manually adding or removing fees as needed.
Your software will then automatically apply late fees to tenants’ accounts when appropriate. Your tenants won’t be able to submit next month’s rent without paying the previous month’s bill and late fee in full.
High Operating Costs
Many landlords struggle with the everyday costs of maintaining a rental business, especially during the first few years. There’s maintenance, repairs, insurance, employees, and many more expenses to consider.
Using software to help manage your business is one way to minimize extra operating expenses. For instance, when you use online rent collection, you save on fuel expenses needed to drive to the bank. You can also limit extra team members as your software can help you complete your own accounting and maintenance tasks.
Few people look forward to tax season.
Real estate taxes are especially complex and understood by few. Without an expert to walk you through your tax return, you’re likely to get lost in which deductions you qualify for, how to depreciate your assets, and how to avoid an audit.
While enlisting the help of a tax professional is always recommended, property management software can help streamline the tax process. The software provides easy access to your key performance indicators, metrics, and profit/loss reports when it’s time to report your revenue and expenses to the IRS.
Many software platforms also offer tax form auto-generation, expense tracking, document organization, automatic bank reconciliation, and financial data exportation. Each of these features enable you to seamlessly extract the data you need, whether you’re using tax preparation software or you hire an expert.
Finally, handling maintenance is an unavoidable challenge in any rental business. If you don’t have an established system for maintenance tickets, you could get overwhelmed by tenant messages and phone calls in your inbox.
For this reason, most property management software platforms offer a maintenance portal. Document, organize, and forward tickets to the right personnel on your software platform. You can also monitor the progress of each task and check in with tenants when the task is completed.
Tackling Property Challenges with Software
No resource or tool can guarantee 100% stress-free management. However, equipped with property management software, you can be prepared to tackle whatever challenges you face. Whether it’s vacancies, late rent, high expenses, taxes, or maintenance, property management software is your secret weapon for success.