Managing Your First Rental

[Peyton Culberson]

Hi all! I hope you are doing well. 

I am a young and inexperienced landlord looking to see what other landlords are doing for managing their portfolio. I recently househacked my way into my second property, and my first property is now a full time rental on a rent by the room basis. 

Currently, my setup is a separate bank account with it's own debit card to hold deposits, track expenses, and track income. I do not use any software or anything like that and it has worked so far. However, I feel like there is more that I could do, to be more organized. I keep leases in a filing cabinet. 

Is there any suggestions that you have for me to keep the process more organized? Any software I should be using? I know it is only one property that I am managing, and I might be overcomplicating it by adding in software or whatever it might be, but I would appreciate any advice!

[Preston Dean]

@Peyton Culberson

It sounds like you have a simple system for the time being! We had the same set up with the bank account system

We used https://www.avail.co/ when we were managing our rental last year. Its a pretty nice website and I believe Bigger Pockets sponsored it at one time. 

Maybe in the future I would just suggest having the documents digital and on a computer somewhere. 

[Peyton Culberson]

@Preston Dean Awesome! Thank you so much. I will look into it. I do have the documents in my email, but that is it. 

[Diego A.]

You should create your tech stack. It is always simpler to use one system, but in my case that does not work as I found some functionalities pricy.

Tracking rentals: stessa.com

Screening: mysmartmove.com

Rental payments: apartments.com

Repairs request: apartments.com

[Nathan Gesner]

Quote from @Peyton Culberson:

Software is a common question on BiggerPockets. Here are some things to consider:

1. Most investors don't need software until they have 5-10 rentals. You only need a place to track tenant information, payment history, maintenance, etc. You can easily do this on a spreadsheet, and it will take less time to track than finding and learning new software. If the software is not simplifying your life or making you more accurate, you shouldn't use it. Go to Etsy and search for "rental property tracker," and you will find hundreds of nice spreadsheets to track 10-20 rentals, usually for under $10.
2. Software has extremely helpful features like online payments, marketing syndication (click a button, and your property is advertised on multiple sites), electronic document review/signing, maintenance tracking, and owner reports. Do you need all this for a couple of rentals?
3. There is no perfect software out there. Every system you try will have flaws, or you may salivate over a feature that appears in other software.

Some familiar names are mentioned frequently: Stessa, Apartments.com, RentRedi, TenantCloud, Innago, RentManager, Avail, Rentec Direct, Doorloop, etc.

I recommend conducting thorough research on each app online to understand their offerings, pricing, etc. Create a simple spreadsheet or written list to compare the features of each and identify the ones that align with your requirements. Try to narrow down your options to the top 3-4. Once you have a shortlist, sign up for an account with each one and test them extensively to see how they function. Perform the same task in each app to ensure a fair comparison.

• Load a property with pictures and details.
• Market that property.
• See what your marketing looks like from the public's perspective.
• Submit a fake application to see how easy the process is.
• Run a credit/screening report on yourself.
• Enter a maintenance request, assign a vendor, and attach a fake invoice.
• Enter charges to the tenant's ledger.
• Enter recurring charges and automatic late fees.
• Sign documents electronically.
• Run owner reports.

After testing a few apps, one should clearly stand out. It's important to choose that one and commit to using it. Remember, no system is perfect, so avoid the temptation of constantly chasing after the next shiny object. You should only consider switching when your current software has a significant flaw or lacks features that force you to spend excessive time on workarounds. At that point, it's worth researching and finding a solution that better meets your needs.

[Griffin Malcolm]

I've been reading through the Self-Managing Landlord book from BP and the chapter I've found the most useful is "Creating Your Tech Stack." I'm only at 2 properties as well, so it's a bit overkill for me, but I'd rather have the systems in place now than scramble once I acquire more units.

I pay for BP Pro, so I created accounts for the free sponsored platforms they have. RentRedi for property mgmt is nice since you can list the units directly from RentRedi and they do all the pre screening and applications there too. You have to pay extra for book keeping though, so I made a Baselane account for that which has been nice so far. That's really it for now. I feel more organized especially with the bookkeeping work

[Peyton Culberson]

@Nathan Gesner This is great info! Thank you! I will go get something from Etsy for the time being and do some more research as I go, on different softwares.

[Peyton Culberson]

@Griffin Malcolm Great to know! I have heard quite a bit about baselane and have wondered if it has been worth it. Thanks for the input

[Peyton Culberson]

@Diego A.Great to know, especially about the repairs and rental requests.Thank you!

[Evan Polaski]

@Peyton Culberson, personally, I use Zillow Rental Manager for my lone property.  Even when I still had 3 I used Zillow.

I list my property on Zillow for rent, I use the Zillow application process, I use their form leases and  collect payment all through Zillow.

With only a couple rentals, it did everything I needed it to do, and combined with a spreadsheet or Quickbooks online, if you want to be a little more official, it does not take much work.  While Quickbooks is not the cheapest, it is very intuitive and saves me a little on my accounting bill because they a) don't need to do the bookkeeping, and b) it comes to them in a format they can quickly review and add to my tax filings.

I believe, as long as you have fewer than 5 properties, Zillow is a free option to use.  That being said, Zillow is also the primary site in my market for rental searches, especially SFRs, so I have no shortage of tenants seeing my listing when it is available.

The one downside, which is minimal, is even though the tenant pays rent through Zillow on first, and I get a notice that rent was paid, it can take 5-ish days to arrive in my bank account.  This could be an issue, if you don't maintain much of a balance and have other bills coming out on the first.  If the tenant setups up payments on Zillow, it does notify you if the rent didn't get paid on first, for any reason, so you can reach out to tenant and figure out a solution right away.  There is no charge to tenant, if they connect a bank account, and no charge to you for using the payment service.  If tenant wants to use credit card, Zillow charges the tenant the additional processing fee, so you still get your full rent amount.

[Max Emory]

Hey @Peyton Culberson, congrats on your 1st full rental property!

Most PM software won't be worth the cost at this point depending on your budget.

At this stage, a good ole Excel/Google Sheet will do for keeping up with your income/expenses. You can even create a balance sheet if you want to get crazy.

I definitely recommend scanning all of your documents associated with the rental using a free app like Genius Scan and get those into some sort of digital document management platform such as Google Drive, Dropbox, etc. This ensures you can access these docs from anywhere and if they originals get destroyed you have the digital copies.

[David Cherkowsky]

I am in a similar boat. I have one rental property at the moment. I decided to use RentRedi for collecting payments and managing maintenance requests. While I am not disatisfied, I have found that it has not been needed. If I could do things over again, I would likely manage things manually.

I could see software being valuable as you increase your number of doors, but for a small number, it doesn't seem worth it if you're reasonably organized.

[Brandon Weis]

While a software might not be necessary at this stage with your rentals, you should probably at least upload all your files (leases, invoices, etc.) to Google Drive at a minimum. It's a simple and free tool that everybody uses, and that is at least a backup in case something happens - you lose your hard files, there's a fire, or some file nerd breaks in and steals your documents. 

I always like to make sure everything is up in the cloud for a rainy day! (I hate myself for this one)