Automating Lower-Income Rental Property Management

[David M.]

Hello,

My family owns 105 single family rentals with an average rent of roughly $650-$675. The tenants who generally rent from us are working in low-wage industries or collecting SSI disability checks.  My father has collected this portfolio over the last twenty or so years, and he generally makes up for a lack of a property management company (or even property management software) by having a flexible work schedule and spending three or four hours every afternoon and most weekends collecting rent, meeting contractors, showing houses, collecting applications, signing leases, etc. I believe he genuinely enjoys some aspects of being this "hands-on," but our portfolio size occasionally means that there is too much going on at one time (periods of time with lots of turnover, for example) to feel as if we're being proactive with capital projects, maintenance, tenant screening, etc. Also, going forward with me taking over parts of the portfolio in the long-run, I do not have a flexible work schedule and will inevitably either need to automate much of the business, hire a property management company (we'd like to avoid it), or find some other option.

I feel as if part of the solution may be to invest in good property management software for a portfolio of this size. After researching half a dozen or so, the one that seems the best fit so far is the Rentec Direct software due to its cost and features, but the lack of an Android app is off-putting. We're also skeptical about the ability of any property management software to help us significantly automate the functions of property management for lower-income tenants.  Many of our tenants don't have bank accounts or access to the internet beyond smartphones - the primary benefits of adopting software seem to be to allow ACH rent payments, have a portal for maintenance requests that we can quickly get out to contractors, and avoid the phone ringing off the hook/having to stop by so many properties on a weekly basis. I understand that training the tenants on new systems will be beneficial to long-term compliance, but do any managers of lower-income properties have input (good or bad) on dealing with some of the technological and banking issues that are somewhat unique to this particular demographic when it comes to property management software and automating the business more efficiently?

Thanks.

[Dawn Anastasi]

With lower income properties, it seems a lot of tenants pay via money order or via cash.  Driving around to all the properties and collecting rent can be a lot of work, especially with 105 properties.  If it takes you even 15 minutes to collect each rent, then you're spending over 26 hours a month just collecting rents.

One easy way to save around 25 hours of that per month is to just have your tenants mail in their rents every month to a PO Box.  To start them off, give them each 3 stamped envelopes so that they can get used to the idea of doing this.  It's going to cost you $154.35 plus envelopes to do this, but that small cost will save you a lot in the long run when you factor in time, plus gas money.  After the 3 envelopes the tenants can start using their own envelopes.

As far as cutting the grass, not sure if you're doing it yourself but that's an easy one to hire out.  You get a small company or a couple of guys to setup a regular schedule every 2-3 weeks in the summer to go around and mow everything.

Getting on schedules with maintenance activities also helps. For example, at the beginning of summer, go around and make a list of all the screens that need replacing and have someone hammer them out all at once.  Then you're not tackling them one by one.  Right before winter change out the furnace filters with a good 3-month one to all the properties then in 3-months set up a schedule to do it again.  (If you have central air then you need to do it in the summer too, but sometimes low income houses don't have central air.)

Change out the toilets to flapper-less models so that you don't get issues with toilets running. They can also save on water costs too.

Get the smoke detectors with the 10-year batteries so you're not running around every year changing batteries.

When you have turn-overs, re-paint always using the same colors.  Get the 5-gallon buckets even if you only need 2-3 gallons; you just use the rest at another property.  I use semi-gloss on the walls so that it wipes down more easily.  Semi-gloss can hold up through 2-3 tenants.