PropertyManager.com » Technology

Rental Income with a “Home Away from Home” Approach

Marc Courtenay — Fri, 12 Aug 2011 18:01:25 +0000

There are many ways to help owners expand their base of income and to market yourself as a property manager that’s going above and beyond to help your clients succeed.

Recently I learned of a company that had their “Initial Public Offering” (IPO) on the Nasdaq stock exchange. It reminded me of an opportunity that property managers are able to create in their own backyard. Austin, Texas based HomeAway, Inc. (Nasdaq:AWAY) operates as an online marketplace for the vacation rental industry. Its online vacation rental property marketplace enables property owners and managers to market properties available for rent to vacation travelers who rely on the company’s websites to search for and find available properties. The company’s website (http://www.homeaway.com) offers property listings, photographs, pricing, availability and contact information for vacation homes.

The company publishes detailed property listings, including photographs, descriptions, location, pricing, availability, and contact information. It also sells complementary products, such as travel guarantees and property management software and services. It’s a smart business model and successful people I know have been looking for something like this for a long time.

One couple told me, “when we go on vacation with our half-grown kids, one hotel room is too cramped and two hotel rooms for a week is more expensive than renting a house.”

How does one find a short-term house to rent? Typically, it means calling a local real estate agency that has a limited number of rental properties available. If you don’t find what you want, you have to call another agent, and this process is often a pain in the neck. HomeAway takes this highly fragmented market and consolidates it, offering just what people need at their particular price point. With millions of second homes in resort areas sitting on the market unsold, many of them will ultimately be offered up for rentals, increasing both inventory and affordability.

So why not consider this as an additional service that your property management business can offer? This would be especially valuable in resort areas or in parts of the country where people come for extended stays (university towns, state capitals or hubs of major industries). Try presenting this idea to selected owner-clients who may want to use some of their rental units or houses for this purpose. It will remind them that you’re a reservoir of not only reliable management but also lucrative suggestions.

There are variations on this theme, like offering short-term rentals for corporate executives, graduate students with families, or for retirees who want to test your area by living there for a few months. In these challenging times it pays to think outside the box and create the strong reputation that you are a property manager who’s also a source of good ideas. The “Home-Away-from-Home” rental concept is just starting to catch on. See if it can benefit you and your clients.

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iPad – Beyond the Cool Factor

Heather Blume — Tue, 19 Jul 2011 17:39:26 +0000

If you’re trying to justify the purchase of tablets to your company, you’re going to have to have more than a strong, “I want it because it’s neat,” factor. With all the programs that have been coming out with great tablet integrations and apps, on site teams are salivating over these little toys. In fact, over the last 18 months I can’t even count how many people have told me how great leasing with a tablet can be. It’s cool. Prospects love playing with it. It gives you that nifty techie edge to your apartments.

But did you know that the uses of Apple’s iPad can extend straight to your bottom line? I’m talking about NOI here, ladies and gentlemen. Not the leases we might get, but the delinquencies that we already have.

That’s right – Your ADL can benefit from a little tech touch up.

I got turned on to this idea by a property manager out here on Mercer Island who, rather than just printing out the ADL letters and mailing/taping them to resident’s doors (which always looks so classy!), sends their people to knock on doors at the end of the day to remind residents of their balances in person.

Uncomfortable, you say? I would agree to an extent, but the diversion of the iPad makes this face to face, budget enforcing task a success for the property. When the resident answers the door, they greet the resident and let them know that they have an outstanding balance with the office, and then they OFFER THE CONVENIENCE of paying that outstanding bill, right there, online using the resident portal on their iPad browser.

Residents are more likely to pay right then and there because it’s not “out of sight, out of mind,” and they see it as a bonus that the management team came to them on their time and they didn’t have to remember to stop in at the office, or make time on a weekend to do so.

People will use your services if you make them easy to use by providing great customer service to go with them. Technology can enhance that level of service, and can enhance your budget and bottom line if you know how to get the most out of it.

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How to Get Your Residents To Pay Rent Online

Mary Girsch-Bock — Tue, 14 Jun 2011 17:20:28 +0000

While many property management companies have been offering an online rental payment option to residents for years, there are just as many who currently do not. While technology savvy individuals often jump at the chance to pay rent online, many management companies that currently do offer this option have found that only a fraction of their residents actually utilize an online rental payment option.

The benefits are clear to property management companies; online payments tend to be more timely, the hassle of locating lost checks, stamping checks, and making bank runs becomes obsolete, and the time spent collecting on NSF checks is reduced to zero.

So if you’re considering offering this service to your residents, or want to increase the number of residents that take advantage of it, consider the following.

Appeal to procrastinators!
Being able to pay rent online allows residents who typically wait until the last minute to pay their rent the opportunity to do so – without incurring a late charge in the process.

Inform residents of the advantages of paying online.
Advantages include the ability to view a comprehensive rent payment history, and the option to schedule the rental payment. Some services offer an automatic debit from your account monthly, so residents can simply set up the amount and the date of the direct debit, and not have to think about it again.

Consider offering an incentive for signing up.
Everyone likes to get things for free, so you may want to consider dangling a $5.00- $10.00 gift card to a neighborhood merchant as an incentive.

Make it a contest.
Enter the names of all those signing up for online rental payments during the month in a drawing. Dinner for two or a $50.00 gas card may persuade reluctant residents to sign up.

Make it required.
If none of these work, consider implementing online rental payment as the required standard in payments. Rather than making it a requirement for all residents, impose the new standard on all new residents and establish a date that current residents must comply. You could also tack on a fee to residents who choose to continue to pay their rent with paper checks. Be sure to check with local and state agencies to determine if your property management company can legally impose this restriction on residents.

While some residents will always prefer to pay rent by check or money order, others find the ability to pay rent quickly and easily online an added bonus, not a detriment.

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Choosing the Right Property Management Accounting Software

Mary Girsch-Bock — Thu, 12 May 2011 12:00:30 +0000

Has your current property management software program been giving you more problems than solutions? If so, you may be ready to look for new property management accounting software. Before you do anything, take a brief inventory of your needs, your employee’s needs, and what you absolutely have to have. If you’re not sure what you need, take these suggestions under consideration.

Remote Access
In my eyes, Remote Access is not negotiable. Being able to connect from anywhere is an absolute must these days, particularly for property management firms that traditionally deal with employees working in remote locations in different parts of town, or, in many cases, different cities and states. To ensure that all of your remote workers have the same access to the same data, invest in web-based software that is as easily accessible from Chicago as it is from Miami.

Portals
Think about how much easier your job would be if tenants could log into a secure account to pay their rent, check for any messages and send in maintenance requests. Just slightly less important than remote access, tenant portals allow your tenants to become more rather than less involved with the community, as they will have instant access to resident newsletters, rental information, and can have their own rental account set up and easily accessible.

Electronic Bill Payment
While companies that manufacture paper checks may not be too happy about this feature, paying bills electronically saves paper and toner costs, eliminates lost checks and delayed payments, and make it easy to track payments made. It also eliminates outstanding checks on your bank reconciliation, making that process a whole lot easier.

Website Integration
While almost any program provides some web access, you want to look for a software program that actually integrates with your company website. True integration allows potential tenants to browse your website, take a peek at floor plans and any property videos and photos you may post, and even arrange to view a specified unit. Some companies even post property diagrams where applicants can see which apartments are available and choose the unit they may be interested in. This also works well with single family homes, where an interactive map displays exactly where the home is located, allowing applicants the ability to choose whether they wish to look at the property prior to contacting leasing personnel.

While there are a lot of other features that may be on your ‘must have’ list, purchasing a software product with these features will eliminate the need to look at software again in the foreseeable future.

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How Property Managers Can Use Video

Aimee Miller — Thu, 07 Apr 2011 20:19:42 +0000

AppFolio recently hosted a webinar featuring Todd Breen (CEO of VirtuallyIncredible.com). Todd is an experienced property manager and he shared his best practices on how property managers can effectively use video in their business. This recorded webinar included great ideas on how to shoot marketing videos, inspection videos, move-in/move-out videos and more!

Watch the recorded webinar and read even more of the Q&A here:
http://www.appfolio.com/blog/2011/03/video-improve-property-management-marketing-todd-breen

Do you have employees in your company that just take videos?
You don’t need someone with great video skills – you really want a knowledgeable property manager who can describe the features of each property.

Do we still have to use photos?
Yes, definitely! Video doesn’t replace photos, people will be attracted first by your photos and if they like what they see they’ll watch the property video. People expect to see both.

Do you recommend The Flip Video Camera?
I usually recommend the Kodak z18 for a video camera but lately I have been loving my iPhone 4 videos! Check out the iPhone 4 (video review here: http://virtuallyincredible.com/2011/video-tours-iphone4).

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5 Signs That It is Time To Upgrade Your Property Management Software

Mary Girsch-Bock — Sat, 11 Sep 2010 00:24:41 +0000

Property managers ask a lot from their software products. We expect those products to do everything from posting accounting entries for us, to crediting our bank account when we write a check. We ask our software to easily track our current tenants, show us what unit or address they occupy, and when their lease expires. We expect our software to produce accurate reports that are professional in appearance. We need our software to keep accurate records and help us stay organized.

But what happens when a software product stops doing the things we ask it to do? Just how do you determine when it’s time to upgrade your software? Here are a few signs that indicate it’s time to start searching for a new solution:

You’re unable to retrieve the information you need, when you need it You’re in the field when you suddenly realize that you need to access information on the tenant in unit 2A. Can you easily do this, or do you find yourself relying on office support staff to provide that information? What if it’s 8:00PM and the office is closed?

Your staff complains about having to enter the same information several different times. If this is standard operating procedure at your company, you may want to think about consolidating software. Keep in mind that the more times data is entered, the risk of mistakes also increases.

Your staff accountant needs to create owner reports using a spreadsheet program because your current software is not able to produce them. There are times when you may feel the need to create customized reports, but your software should be able to create the reports you need without any third party products.

Your current software product is at least five years old. Things change rapidly in the technology industry. That means that your current software likely does a fraction of what a newer product is capable of doing. Also keep in mind that many companies frequently stop supporting older versions of their software.

You’ve recently experienced a growth spurt, or added more users to the system. This is a frequent occurrence at smaller property management companies. Adding just a few new properties may suddenly overtax your current software, with the same holding true when adding additional users.

When in the market for new software, it’s better to plan ahead and purchase the best product you can at a price within your budget, taking the time to understand the cost/benefits to your specific business. Planning for future growth and expansion is an important part of managing a successful property management business, and choosing the best software product is a vital part of that plan.

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Using Excel Instead of Property Management Software Is Risky Business

Mary Girsch-Bock — Mon, 30 Aug 2010 19:11:47 +0000

It’s no secret that there are a lot of Excel users in the property management community. An outstanding spreadsheet program, Excel frequently plugs in the gaps commonly found in accounting programs. But there‘s a group of property managers that may find themselves relying on Excel a little too much.

In recent years, Excel aficionados, fed up with the intricacies of accounting software products, have begun using Excel as their primary accounting software. And while there will always be success stories about those who chucked their “non-functional” accounting software for an easier life with Excel, the fact remains that using Excel exclusively as your accounting software product will ultimately cause more problems than it fixes.

Here are things Excel lacks when compared to a dedicated property management accounting software system:

Data Integrity
Excel’s flexibility, an asset on most fronts, can prove to be a detriment to those who utilize it as a complete accounting program. While flexibility in a spreadsheet program provides users the ability to customize data and change formulas when needed, the downside to using Excel as a complete accounting solution is that it customizes data and allows formula changes. Even an elementary accounting product offers a semblance of controls to ensure data integrity.

Protection Against User Error
Excel offers no double entry accounting system. The accounting equation Equity = Assets – Liabilities has been used for centuries with good reason. It keeps books in balance. And while any information entered into a computer is only as accurate at the person entering it, the fact remains that an integrated accounting program offers a level of protection that Excel cannot.

Ease of Use
You have to be really skilled in Excel in order to utilize it as an accounting software substitute. Yes, there are numerous templates available that make this process a bit easier, but in order to keep an accurate and organized record of your business transactions, you’d better know your way around Excel. In contrast, accounting software products have made it easier than ever to set up a solid financial system that requires little maintenance.

Efficiency
It’s much easier to track transactions, balance bank accounts, and produce accurate financial statements when using a traditional accounting program. Again, while it can be done using Excel, a small property management company that does not wish to spend a lot of time on accounting would be better served using standard accounting software, rather than spending hours trying to set up an Excel spreadsheet to produce the same information. In addition, some property management software programs have integrated the accounting functionality with online rent payments.

Using Excel as the spreadsheet program it was designed to be will produce more benefits to the property manager than spending hours trying to shape it into an accounting program.

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Contest Winner: How Much Does It Cost To Process A Rent Check

Aimee Miller — Thu, 24 Jun 2010 14:00:19 +0000

In a recent contest we asked property managers to guess the true cost of processing a monthly rent check. Property managers from all over the U.S. submitted their best guess and were automatically entered into a drawing to win a super cool Flip Video Camera.

The lucky winner is Keith from Real Property Management & Realty in sunny Orlando, Florida. He is the proud new owner of a very fun Flip Video Camera. Congratulations Keith!

To learn about the true cost of processing a rent check, head on over to AppFolio Property Manager’s blog.

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Your Paperless Office: Five Great Reasons to Move Payments Online

Jim Semick — Wed, 28 Apr 2010 23:34:20 +0000

A single check seems small enough. But added up, the checks your property management company deposits or prints can ultimately bury your staff under a mound of paper. If you are on the way to a paperless office but haven’t yet tackled electronic payments for receivables and payables, you are paying more than you need to run your operation.

Many property management companies use a blended approach of electronic and paper-based payments, although the trend is clearly towards electronic payments. Most electronic payment implementations involve a combination of one or more of the following:

Moving resident rent payments, application fees and other receivables online using ACH (Automated Clearinghouse) and credit cards.

Moving your payables online by sending electronic payments to vendors, owners or investors, employees and others.

You may have already implemented check scanning for receivables or MICR laser check processing for payables. Congratuations – both these technologies are effective ways to streamline your backoffice. However, these methods still carry handling costs. Electronic payments can dramatically reduce these costs even further.

Here are five great reasons you should implement electronic payments as part of your paperless office initiative:

Improve efficiency and accuracy. After all, isn’t that the reason you decided to go paperless in the first place? With electronic payments, your staff can save a significant amount of handling time and reduce errors. According to independent studies, each paper check you eliminate can save your company at least $2.00 in handling costs.

Greater security. Each time a check is handled, whether it’s by the post office or your backoffice staff, the odds of a loss or security issue is increased. Online payments are a more secure way of getting the payments into or out of your account.

Improve cash flow and visibility. Rent payments made using an ACH system are deposited more rapidly than a traditional paper check. Notification of non-sufficient funds occurs faster as well. In addition to faster funds availability, electronic payments provide your accountant and management team with a more real-time view into receivables and payables.

Fewer trips to the bank by you and others. Payments you receive online are automatically deposited at the bank, saving you trips to the bank and improving deposit security. Your payables are deposited directly as well, and although this doesn’t affect your bottom line, it’s the greener way to go.

More convenience for your customers. Payments by paper check are clearly on the decline, and forward-thinking companies are offering innovative electronic payment methods to their customers. In property management, you can provide more convenience to your customers: residents, vendors, investors/owners, and employees. These customers expect it.

You can find electronic payment solutions from multiple sources, including your bank, independent payment processing companies, and from your property management software vendor. Once you get started with electronic payments, you can streamline your operation even further and start to unbury your staff from that mound of paper.

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Rent Week Pain Relief: What’s the Best Online Payment Solution?

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Rent Week Pain Relief: What’s the Best Online Payment Solution?

Jim Semick — Wed, 24 Mar 2010 21:51:08 +0000

It’s rent week again, and all hands are on deck. If you’re like many other property management firms, you have an unwritten rule: no vacation during rent week. You realize that rent checks cost your property management company time and money with unnecessary handling, data entry, errors, staff frustration and other inefficiencies. Surely there has to be a better way.

Even if you have invested in check scanning, implementing the right online payment solution can streamline your operation, improve your cash flow, increase resident satisfaction, and most importantly, minimize your staff’s pain during rent week.

Most online rent payments are made using electronic transfers from a bank account (ACH). Credit cards are a less popular choice for rent payments. You can find these online rent payment options from several vendors:

Online rent payment companies. You can partner with a solution that specializes in property management payment processing. With these solutions it’s important that you be able to integrate the online payment data with your accounting solution.

Property management software provider. Your current or future property management software vendor may offer online payment capability. The benefit of using this service is that it is often tightly integrated with your accounting system.

Your bank. You can work with your bank to send and receive electronic checks and credit cards. This is often the most cost-effective solution, but the most time-consuming for you to implement.

Here are a few essential questions to ask when evaluating any solution:

How much does it really cost? Evaluate the total cost for setup fees, monthly fees, and per-transaction/convenience fees. Even if you expect your residents to pay the convenience fee, keep in mind that the higher the fee, the lower your adoption rate.

Does it integrate with your accounting? Look for a solution that seamlessly integrates with your AR system. Many systems can generate an export file you manually import into your AR system, but this adds another step and delays reporting.

Does it provide real-time access? Does your resident get real-time access to their upcoming charges and payment history? If you need to manually upload charges and payments to the system, the information is outdated almost immediately.

How easy is it to use? Don’t overlook this one. A solution that is unintuitive or packed with bells and whistles may actually decrease adoption by residents. How easy is it for your back office staff to use the reports, NSF notifications and data without training?

What is the settlement time? After your resident pays, how soon are the funds deposited and available in your operating account? The most common settlement timeframes are 24-72 hours depending on pricing.

Are there a variety of payment options? Make sure residents have the option of one-time or automatic recurring electronic funds transfers (ACH). If you give residents the option of paying by credit card, keep in mind that credit card fees can be as much as $10-30 per rent payment, so you may want to find a solution that allows you to pass these fees on to the resident.

How flexible is the solution? Will the solution match your monthly processes? Ask whether you can select which operating bank account(s) the payments should be credited to, whether the system can be incorporated into your Website, and how much marketing support the company provides to increase adoption by your residents.

In the end, the choice you make depends on how quickly you want to get up and running, ease of use, how seamlessly it integrates into your accounting system, and how much you want to pay. Choose the right solution, and who knows, you might be able to take a vacation day during the next rent week.

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Your Paperless Office: Five Great Reasons to Move Payments Online

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