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Module 2 – So You Want to be a Landlord… Really?
Lesson 3 – Systems Are The Key
Systems make the job easier. They help you create a process for how to do things so you are never caught off guard.
Let’s talk about:
- Paperwork
- Accounting
- Maintenance
- High Tech vs. Low Tech
Paperwork – emails, texts, receipts, letters, property management specific such as leases, notices, addendum are all typical paperwork. I am a big believer in keeping things as simple and easy as possible. It doesn’t matter to me what system you use just create and use a system. If it is too complicated you won’t use it.
Anytime you communicate with your tenant you want to make sure to follow up with email…per our conversation. This allows for both sides to agree. Miscommunication happens when people hear the same conversation differently. If something isn’t right the conversation can continue until both sides are in agreement. Today, people text and that works too just make sure to send that to an email so you can keep and file it. If you are old school a written letter works too.
Every tenant should have their own file whether in paper or electronic. In that file you will keep communication, official paperwork (rental app, credit report, lease etc).
Accounting – if you can add and subtract you got this! You don’t need to use Quickbooks or Excel but if you are a techie person knock yourself out. I started that way and found it easier to just use a basic word table or excel speadsheet to list things like you would in a checkbook. I called it my Cashflow sheet. I would enter the rent and any expenses if there were any and keep it going for the year. At year end I would sum it up, print it out and attach it to a large envelop that had the property address on it and the year. My cashflow sheet would get stapled to the outside. All receipts for work done or items purchased for that property were inside the envelope. I would give my stack of envelopes to my CPA and she loved it. I made life easy for her…Yes, there are people who give her a bag of receipts and expect her to work it out…But, I saved a ton of money on my taxes by doing a little work each month.
Tip: Copy receipts. Many fade and when you go to gather them or double check them the ink is gone. Also, some receipts are cryptic and only have a SKU part number and the price. When you get your receipt, copy it and write on the paper the item purchased. You’ll be glad you did.
Maintenance – Your vendors need to be on speed dial because I can tell you from experience you will be in the process of boarding a plane for the first vacation you have had in decades and the tenant will be calling you that sewage is backing up into the tub…oh, and it will be 5:30 pm on a Friday of a long holiday weekend! You want to be able to text your people and know they can handle it.
How do you find maintenance people? Here is my secret. Call a local property management company and ask who they use. They might give you their vendor names. I did. I wanted my great people to be employed. If they don’t then ask your one vendor who they recommend. Keep in mind trades people know other trades people. Another great way to find good people is to ask your realtor friend, look up vendors on community forums such as: next door, Think Local or on business networking groups like BNI, LeTip or Leads. These networking groups are made up of professionals in the area that are looking to grow their businesses. They tend to be professional, reliable and service oriented.
Try them out on your home with small tasks to see if they call you back, show up on time, are clean and professional, competently do the task at hand, and get you the invoice for payment quickly. I always hired vendors and tried them on my home before sending them out to properties under my management.
Treat your vendors well and they will be there for you.
Tip: Vendors love gas cards as a Thank You.
High Tech vs Low Tech – It doesn’t matter which way you go just have a system and use it. I started out High-Tech and now I am in the middle but closer to Low Tech. I find it is just easy for me and I can look back over years to see what has happened quickly.