As a landlord, you need an office. It doesn’t matter if your office is in a separate room in your house, in a corner of your bedroom, or in the back of your garage. You need a centralized location where you can keep your rental business in order. Without it, you’ll struggle to stay organized and end up overwhelmed. So take some time this weekend to build yourself a nice little office somewhere in your house. Then it’s time to organize that office. The following are twelve things every rental property manager’s office should have. Does yours?
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12 Things Your Office Should Have
1. File Cabinet
The world of real estate has a LOT of paperwork in it. Although there is a shift in American society toward a paperless office, dealing with paper will still be a major part of your job. Thus, your file cabinet will become your best friend. A file cabinet is where all the documents related to your rental properties will be organized. If you have just one or two rentals, a small, portable file holder will probably be sufficient, but as you add units, you will likely want something larger and more secure. If you are low on funds, you can typically pick up a used metal file cabinet at any thrift store for under $10 or buy something new from an office supply store for under $100. Pick up some large hanging files, as well as numerous individual colored folders, one for each of the following categories:
- Insurance Info
- Mortgage Info
- Purchase Docs
- Monthly Income Statements
- Bank Statements
- Tenant Interactions
- Rehab and Maintenance
- Tenant Files
- Miscellaneous Paperwork
This way, each property will have one overarching folder file, as well as several color-coded folders for easy retrieval of information. Need insurance docs for 123 Main Street? Oh, that’s in the 123 Main Street file, red folder. Easy, convenient, and fast. By setting this system up at the beginning of your investment business, you are able to grow in a much more organized manner later. Don’t wait to organize until it’s too late. Start right, start organized, stay organized.
Get yourself a high-quality printer/scanner/copier machine—because you are going to need it. Don’t skimp on quality here; with printers, you truly do get what you pay for, and if you buy a cheap one designed for regular families, you will spend more time cursing at your printer than actually getting work done. You need a printer designed for businesses. We’d recommend getting a medium-grade tabletop laser printer that has scanning capabilities ($200–$400). You likely will not need a color printer (you can always print a colorful flyer at Staples), but you do want something reliable and fast. If you’ll be using a laptop to manage your rentals, we’d recommend getting a printer with wireless printing capabilities, so you can print from wherever you happen to be sitting in your house or office.
3. Fax Machine
A lot of the younger folks reading this book might not even know what a fax machine is, as email is quickly eclipsing the need. However, we still send and receive documents via fax several times a week involving our rentals. The truth is, a LOT of businesses still don’t know how to use email and rely on the fax machine to get things done. Because you will be interacting with those businesses, you need to be able have the capability to send and receive a fax. The printer you buy may have fax capabilities, which is great, but you’ll also have to have a phone line directly to your home to operate that function, which many people no longer have. Instead, there are several online fax companies that give you a fax number, and you can send and receive faxes directly online. Check out www.MyFax.com or www.HelloFax.com for two options if you plan to go this route.
We are not referring to your email inbox, but rather your office inbox. This is a box (literally, it could be a cardboard box, though we use a desk tray) that contains anything that will require your immediate attention. In our business, we typically receive 10-20 pieces of mail every day, most of which are rental-related: bills, insurance correspondence, bank correspondence, tenant correspondence, bills—did we mention bills? Besides the mail, we are also constantly receiving phone calls, emails, faxes, and whatever else, adding to the list of things we need to do. Trying to keep track of everything in our heads would be overwhelming. The inbox is designed to collect every single item in our business that needs to be dealt with in the near future, after which it will be filed away in its appropriate permanent home. For more on this inbox system, be sure to read David Allen’s book Getting Things Done.
5. Key Box/System
One of the mistakes we made early on in our business was not having a good system for keeping track of keys—and it was a disaster. Start this process today, even if you have just one rental! We’d recommend getting key tags (which you can buy at any office supply store) and labeling each key in a way that will make perfect sense to you BUT NOT a random stranger. In other words: Do not write the address on the key. If you lose the key, some stranger will know exactly where it goes. Then, create a system for keeping track of those keys. Do not throw them in a plastic bag or on your own key ring, but hang them in one central location in your office. You might also consider the idea of buying a combination “key box” from a hardware store and attaching it directly to the property. These combination key boxes are about $30 and can be installed directly on a building, ensuring you always have access to the building.
6. Bill Payment System
As you collect rentals, you’ll also collect a lot of bills. Each bill has a different due date, so keeping track of what to pay and when to pay it can be tough. The easiest method we’ve found for keeping track of bills is placing all bills first in the “inbox,” and then after we’ve gone through the inbox to process each item, placing the bill in our “to-pay” desk tray. Once a week we simply sit down and write out all the bills we need to pay and then stamp “paid” on the bill, along with the check number and date paid. We then put the paid bill in the “receipts to process” (for the monthly profit/loss income statement) file for that property. That said, when small contractors submit a bill to us, we will often pay it immediately, as we want to reward excellent work and to be known among our private contractors as quick-paying.
7. Mileage Tracker
Keeping track of the miles you drive for business is incredibly important when tax time rolls around. Many of the miles you drive will be deductible, saving you more money than you might think. However, trying to keep track of mileage can be a pain. Although there are apps for managing this, the best system we’ve used is simply to keep a calendar or a notebook in our vehicle. We just record what property or business establishment we visited (for which property), and at the end of the year we can calculate the total miles driven for each property.
8. Tenant Directory
No matter how many units you are currently managing, it’s important that you have all your tenants’ names, addresses, phone numbers, emails, and other contract information available when you need it. The easiest way to do this is in an online spreadsheet like Google Docs. This way, you can access the tenant directory anytime, from anywhere. In addition, regularly print out your tenant directory so you have it in your office for easy phone number retrieval.
9. Phone Number
Your office is going to need a phone number. Yes, you could use your existing phone number, but having a dedicated number just for your rental business will come in handy, especially as you grow. The first tenant we ever placed into one of our rentals when we were getting started still calls our personal cell phone numbers, even though they have the business number, because they know it’s a direct line to us. By having a dedicated phone number, you are not tied to your business phone number. If you go on vacation, you can enjoy yourself and hand off calls to someone else. If you decide you no longer want to answer phones as part of your landlording job and want to outsource that, you can easily do that without it affecting where your tenants call. Most importantly, your personal number stays your personal number.
Keep in mind: You don’t necessarily need a separate phone for your business, just a separate phone line. There are several online services that will give you a phone number, and all calls will be forwarded to whatever phone you want to ring. Our favorite and the least expensive (it’s free!) is Google Voice. Google Voice allows tenants to call our business phone line, and we can designate ahead of time any phone we want to ring. For example, during the day we can have all calls go to our in-house manager’s phone, and at night all calls can go to voicemail or an after-hours maintenance person. We can also check voicemail and text messages online and receive text message transcriptions of all of the voicemail messages. In addition, we can record different voicemails to be used at different times of the day (for example, during business hours and after business hours). There are other similar services you could look into as well, such as Grasshopper.com, which has more features than Google Voice but also costs more.
10. Maintenance Tracker
Finally, you need a system for keeping track of your maintenance requests. If you have just one or two tenants, it may be easy to keep track of all ongoing maintenance issues in your head, but we don’t recommend it. Instead, create a maintenance tracker. You can do this in several ways, such as on a spreadsheet or in an online property management software. However, what we’ve found the most success with is using “work orders” with every maintenance need that we pin to our office bulletin board. Once the maintenance has been completed, verified, and paid, the work order is placed in the tenant’s file. For extra organization, you could also staple a copy of the receipts for the work that was completed to the completed work order.
11. Contractor List
Always maintain a list of your current contractors, so when a maintenance call comes in, you can easily call your top guys without needing to dig up the phone number again. This list changes often. You may want to keep this list in a spreadsheet like Google Docs, so you can update it and access it at anytime. Our contractor list is divided by the type of contractor they are—general contractor, handyman, electrician, plumber, landscaper, and so on—and lists their name, contact information, hourly rate, and any special notes about them, such as if they are particularly gifted at painting, tenant turnovers, big jobs, small jobs, cleaning, etc.
12. A Website
Does your business need a website? Probably not, but it can’t hurt. Websites add a degree of professionalism to your business and serve some very functional purposes as well. With a website, you can advertise your vacancies, allow tenants to print out documents (applications, rules and regulations, etc.), give tenants the ability to pay rent online or submit maintenance requests, and more. Websites can also be costly to build and annoying to maintain, unless you really know what you are doing. The less you know about how to build or operate a website, the more expensive it will be. If you do decide you want a website for your rental business, consider the following options:
- WIX.com or SquareSpace.com: Wix and SquareSpace are similar web companies that allow you to build a website, even if you have very few computer skills (no coding is required). You simply need to click and drag items around a pre-made template, and you can have a website up and running in a matter of hours. Both services allow you to create the website before paying anything, which can be helpful for testing out ideas. Currently, you can have either for around $12 a month.
- WordPress: If you have some technical skills, you could build your own website using WordPress, a content-management system. To build your own site on WordPress, you will need buy a domain name online for around $10 per year and buy hosting on a website like GoDaddy.com or BlueHost.com, which for a basic plan costs around $5 per month. Then, you’ll either use a free WordPress theme or purchase a WordPress theme and customize the look and feel of the site, whichever you decide.
- Web Design Company: The third and most expensive option is to simply hire an individual or company to build you a website. Prices for this kind of service are all over the board, but typically start around $500 and go all the way into the thousands of dollars. If you are looking for a great site but don’t want to mess with options 1 or 2, this may be your best option.
Although the size of your business could alter the above 12 items, these are the most important items we use in our office to maintain strict organization. As we are sure you noticed, the organization of our business is designed to help systematize everything into repeatable processes that anyone could follow. By having these systems and processes, we can outsource any of the tasks to an employee as we see fit, giving us more free time and less worry that things are not being done right. Remember, organization is not about rules—it’s about freedom, staying legal, and making greater profits.
So take some time this weekend to organize your life and see what a difference it makes for you.
[This article is an excerpt from Brandon Turner’s The Book on Managing Rental Properties.]
Which of these aspects do you think is the most important? Anything you’d add to this list?
Leave your comments below!