6 Hacks for Making Tenant Management More Hands-Off

by | BiggerPockets.com

“I want to become a landlord so I can work a second job!”

Said no one ever.

People buy rental properties because they want to build passive income. Emphasis on passive.

Granted, rental properties are not completely passive investments the way that, say, mutual funds are. They require some work to buy, to manage, to maintain accurate books, to file taxes on properly.

But the ultimate goal of all landlords is to minimize that work and keep their rental income as passive as possible.

How can landlords keep their property management more hands-off? Glad you asked.

Here are six of the tips, tricks, and hacks that we teach to help keep your passive income, well, passive!

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6 Hacks for Making Tenant Management More Hands-Off

1. Screen tenants for longevity and respectfulness, not just likelihood of payment.

Nearly everything written about tenant screening practices center around one question: How likely is the tenant to pay the rent?

Don’t get me wrong, that matters. A lot.

But it’s not the only thing that matters.

Turnovers are where 90% of the work (and expenses) of being a landlord lie. That means that landlords should prioritize filling their vacancies with long-term, low-maintenance tenants who will remain an ongoing source of income for years to come.

No muss, no fuss, just the rent in your account every month for the next five, 10, 15 years.

Make sure you look at applicants’ moving patterns, when screening them. Did they hop around every year or two for the last ten years? Or have they lived in one place?

Similarly, ask their current landlord about how they treat their unit, and how high-maintenance they are. The last thing you want is an incessant stream of whiny phone calls from tenants trying to wheedle property upgrades every other week.

landlord-lessons

Related: How to Generate $10,000 in Passive Income Monthly Without Quitting Your Day Job

2. Set reminders for lease renewals, and raise the rent!

Every state has laws specifying how much notice landlords must give their tenants, before non-renewing or raising the rent.

Set automated reminders up in your calendar, for every tenant!

If the tenants have not proven as low-maintenance, high-ROI as you’d like, you can send a non-renewal notice. If they’ve worked out well, you can send them a lease renewal notice – with a slightly higher rent.

Raising the rent is an art form, but I strongly believe that landlords should raise the rent (slightly!) every year, to set expectations. Consider raising it between 1-4%, depending on your local market.

Beyond setting expectations, it also prevents you from waking up one day, realizing your rents are 15% below market rates, and then slapping your tenants with a huge rent hike. It’s not fair to them to hit them with it all at once, and it’s likely to drive them away.

Which means a turnover, which means work and expenses. No bueno.

3. Build a relationship with a handyman who can do almost anything.

Most maintenance calls are mundane. They don’t require an expensive general contractor or specialist.

Start collecting references from other investors and property managers for good, well-rounded, inexpensive handymen. As maintenance calls come in, try new ones out. (And spare me the politically-correct tirade—“handyperson” doesn’t have the same ring, and you know it!)

As you find handymen that you like, start building a relationship with them. Ask after their family. Send them a Christmas card (yeah, yeah, I know you’re still there PC Police—send them a bland holiday card if you’re unsure what they celebrate).

The point? When tenants call you about a maintenance issue, it will take you one phone call to solve it, if you have a strong relationship with a good handyman.

One call, instead of calling five different contractors, negotiating fees, and all the back-and-forth involved.

4. Deduct the rent from your tenant’s paycheck.

My least favorite line in the world is “check’s in the mail!”

No landlord wants to hassle with chasing deadbeat tenants to pay their rent every month. It’s tedious and you shouldn’t have to do it.

Instead, consider automating your rent collection by pulling it directly from the tenant’s paycheck.

Once again, you didn’t become a landlord because you wanted to work a second job. You became a landlord to bring in passive income. Passive like, “There’s extra money in my bank account today,” rather than “What do you mean you won’t have the rent for me until next Thursday?!”

For full disclosure, my company is one of two that offers this service (called RentDeduct). So yes, I have a vested interest, but no conversation about automating your rental management is complete without addressing how to automate rents.

5. Hire a leasing agent to fill vacancies, but do your own ongoing management.

Earlier I mentioned that the overwhelming majority of rental management work takes place during turnovers. While your rental units are occupied, all you typically have to do is collect rents, conduct inspections, do preventative maintenance, and handle the occasional repair.

Related: How to Upgrade Your Landlording to Make Your Investment More Passive

But turnovers are a lot of work.

There’s an easy answer to this problem: Delegate the work of managing turnovers.

Consider hiring a leasing agent to handle filling your vacancies. They can advertise, advise you on any recommended repairs, show the property, screen applicants.

All you have to do is send your handyman to make the recommended repairs, and double check that you agree with the leasing agent’s recommended tenant choice.

The upside? You pay a leasing fee to the agent, but you don’t have to pay ongoing management fees, which are expensive and involve very little work on the part of the property manager.

In other words, delegate the hard part, and do the easy part yourself.

landlord-reviews

6. Create automated reminders for inspections and maintenance.

How often do you inspect your rental units?

In our property management course, we recommend inspecting twice a year. It demonstrates to the tenant how seriously you take the property, prevents them from breaking your lease’s rules, and helps you catch maintenance issues early.

But you probably won’t just magically remember the six-month anniversary of every rental inspection.

Set reminders on your calendar, and while you’re at it, set preventative maintenance reminders too. For example, October is a good time to have HVAC technicians service your furnace. You can catch issues early, avoid a 3:00 a.m. phone call in January that the heat died, and HVAC technicians are far more flexible, available, and affordable in their off-season.

Hands-Off Rental Management

Want to work less as a landlord and earn more?

First, make it a priority to minimize turnovers. They’re time-consuming and expensive.

Second, minimize rent defaults, and automate your rent collection. Chasing tenants for rent is a losing proposition.

Third, preemptively keep your tenants and your property humming along happily by doing regular inspections. This will help you prevent lease violations by your tenants, make sure they treat the property well, and catch any maintenance issues before they erupt into major headaches.

Don’t want to do the inspections yourself? Pay an assistant to do them for you.

And last, delegate your turnovers to a leasing agent. They’re a pain in the backside, but you can outsource the work simply and affordable.

Put the “passive” back in passive income!

What are your tips for automating your rentals?

Share them below!

About Author

Brian Davis

Brian is a remote landlord living overseas and long-time personal finance and real estate expert who co-founded SparkRental.com.

SparkRental revolves around helping rental investors and landlords earn more and work less: we provide free rental resources such as a rental property calculator, free income investing video courses, and a free online landlord app that includes a free rental application, instant tenant screening reports, a free lease agreement, automated rent collection and more. Come by SparkRental and say hi to Brian, he loves hearing from readers!

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