I have avoided blogging about the pandemic. I didn’t think that there was anything new to add to the discussion. However, since this past April I have had conversations with numerous landlords throughout the country. They were looking for ways to respond and adapt to the current situation. Here are some topics that came up that I felt are most relevant including contactless rental applications and tenant screening.
Contactless applications and background reports
Removing paper from the application process was important before the pandemic. Contactless rental application and tenant screening is now critical. The use of paper typically involves personal interactions that need to be avoided when possible.
Business owners are constantly looking for new ways to reduce person-to-person contact since the pandemic hit. TenantMagic’s online application and screening program has always allowed property owners and real estate agents to remotely engage with their applicants during the application process. The landlord simply enters the email address of the applicant into the system. The applicant then gets an email with a link to their application. Once completed the landlord receives the application with comprehensive credit, nationwide criminal and eviction reports.
ID verification document management is another area where person-to-person interactions can be eliminated. TenantMagic allows landlords and agents to request paystubs, bank statements, etc. from within the application and screening program. The applicant simply uploads them when receiving the request. The documents are then electronically and securely sent to the landlord or owner as PDFs that can be downloaded and stored for their files.
Automated Rent Collection
Renters in their 20’s and 30’s consistently complain that their landlords will only accept a paper check for their rent payment. They tell me that this is the only physical check that they ever write. In many cases they need to personally give the check to the landlord.
Automated rent collection can eliminate this complaint and many other related issues. There is no need to handle a paper check when rent is collected and deposited from bank account to bank account, . The funds are processed in a timely and consistent manner.
It is important that the automated rent collection program will not allow partial payment unless authorized by the property owner. Accepting partial rent payment can delay eviction proceedings if no other funds are received. We have partnered with PayClix that allows tenants to easily pay their rent electronically for a nominal fee. It also has a proprietary feature where the landlord can decide to accept or decline the payment.
Diligent tenant screening
Taking the first person showing up with a check is one of the worst mistakes a landlord can make when considering a rental applicant. Many times this is the last money the landlord will see.
In today’s environment it is even more important to know the financial, credit, criminal and eviction history of your applicants with current eviction restrictions. Additionally, landlords know all too well problem tenants can result in much more than just lost rents .
It is not difficult to avoid problem tenants before the lease is signed and still be fully compliant with Fair Housing and Fair Credit regulations.
The 4 critical steps you need to take to reduce problem tenants and potential evictions-
- Pre-screen tenants by clearly communicating residency standards
- Require complete applications and require each co-applicant to complete their own individual application and collect an application fee.
- Conduct a comprehensive background screening for every applicant and co-applicant 18 years or older that includes credit, criminal and eviction results
- Pay attention to the results
Getting out of the landlord business
Selling your properties could be a very viable option if the Covid-19 pandemic has drained the last bit of your passion and enthusiasm as landlord. The demand for residential properties is very high, which has resulted in valuations not seen in a long time.
The traditional option is using a real estate agent which offers a number of benefits. Another option is to sell to a company that will directly purchase your properties, as-is for cash. The LP Property Group buys properties in the Northeastern Ohio area is well regarded .
The benefits with selling to a company like theirs is that they will buy the property “as is.” Sellers don’t need to make any repairs or deal with point-of-sale inspections. Decisions are typically made quickly and they often pay 100% of the purchase price in cash, which allows closing much faster than a typical retail sale where financing is involved. Also, these companies will usually cover the seller-side’s escrow fee. Since no real estate agents are involved, sellers don’t have to pay any sales commission.
Preparing for the future
We are all looking forward to the day when we can interact with others like we did before the pandemic and better days appear to be heading our way.
This is also an excellent time to re-evaluate current business operations. There are a number of business activities where person-to-person interactions were eliminated that shouldn’t return. Many of them were simply a waste of time. Automating paper-based processes for landlords and tenants is one area where allowing them to go about their day without having to interact in-person needlessly will be welcomed by both the landlord and tenant.