Everything You Need to Know About Tenant Criminal Reports

Research shows that 1 out of 3 young Americans have been arrested. While it’s important to know that not every arrest results in a charge or conviction, a landlord should always include a criminal report – also referred to as a background check – as part of their tenant screening process.

Until a few years ago, landlords could set their screening policies for potential tenants with criminal histories. But in 2016, the Department of Housing and Urban Development (HUD) released a full-length memo directing landlords on how to handle prospective tenants’ criminal background checks. This post looks at a landlord’s legal jurisdictions when conducting tenant screening via criminal reports without violating the Fair Credit Reporting Act (FCRA)

How are Criminal Reports Kept?

Criminal records were once kept in handwritten and typed files that were stored in county criminal courts. Over time, the government introduced modern databases to store this information. There are several levels of criminal record databases available today. These include:

  • Local and county level database – This is the first database storage. It includes court records, police records, and department of correction records of arrested or convicted felons within a county.
  • Statewide repositories – Each state has criminal records information reported from county police, criminal courts, and department of corrections stored in repositories.
  • National Crime Information Center (NCIC) – States report the criminal information in their repositories to the NCIC. This organization stores criminal records in the Interstate Identification Index (III) database.

Broadening the search to the nationwide criminal database is better than relying on county searches. This is because the nationwide database might detect records that would not be present in county or state records.

How Do Credit Agencies Get Tenant Criminal Records?

When local agencies report criminal records to state repositories, the state shares this information with the federal government, which stores the records in the federal database. Landlords can access the database via online tenant screening services and so can the three major credit bureaus – Equifax, TransUnion, and Experian.

What are the Limitations to Searching Criminal Reports?

There are various limitations to searching for tenant criminal reports via state and federal databases.

On the state level, limitations include:

Different Repository Regulations

Which crimes are reported to the state repositories is regulated by each individual state. In states where reporting criminal information is voluntary, there may be missing records in state repositories.

Missing Information

Most state repositories contain criminal records from about 20% of counties. So chances are, some information may not be available in the state repository. If it is, it may be incomplete with only half the information.

On the Federal level, limitations include:

Limited Content

Data from some states and counties may not be available to people in certain jurisdictions. Some states attempt to protect personal information by withholding key information about their people from the public.

Outdated Information

Another negative aspect of nationwide searches is that federal databases may not be current. A search may find some criminal cases that have been expunged, but still show in the database.

Strict FCRA Requirements

FCRA requires landlords not to solely base their decision on whether to take in prospective tenants or not on the information they obtain from the tenant screening test. If a landlord decides not to take in a tenant, they must provide them with a letter specifying the reason for the adverse action.

Stay informed on New Laws That Limit How Landlords Can Use Criminal Report as They Arise

Being a landlord means understanding what the law does, and doesn’t allow you to do. Tenants have special protection from wrongful eviction, harassment, and discrimination. Therefore, it is important to keep in touch with HUD guidelines through their website to know any existing or new laws.

Our tenant screening service can help you find a tenants’ criminal reports. With the right tenant, you can save you and other tenants’ years worth a lot of trouble.

Please note that this is not legal advice. If you have questions any specific legal questions surrounding criminal reports and how you may use them, your lawyer should be able to answer those.

Rental Property Damage and What You Can Do to Protect Your Investment

When you invest your hard-earned money into real estate, you’ll want to make sure you protect that investment. Part of that process is educating yourself on what could eat into your profits. One of the most significant profit-eaters is rental property damage. There’s good news here. Some property damage is entirely preventable. For the damage that is out of your control, there are ways to mitigate the cost. Let’s dive into what causes damage and how to protect your rental investment.

Causes of Damage

There are three main categories of property damage. Each category has different attributes that change how you should respond to the situation. 

Damage Caused by Tenants

You would think that damage caused by tenants would be the top cause of property damage. While they are the ones spending the most time in the unit, most tenants want to feel like they live in a home and they aren’t trying to devalue it by punching holes in the wall. However, accidents do happen, and damage is damage, whether accidental or not. 

Damaged Caused By a Third Party

Although it is rare, it is possible that your property is damaged by a third party, including strangers and people you thought you could trust. One example is damage caused by a burglar trying to break into the home; this damage is usually exterior as long as they don’t make it too far into the house. Another example of third-party damage is a handyperson causing damage through faulty repairs or an accident.

Damage Caused By Nature

Damaged caused by nature can be broken down further into natural disasters like storms and animal damage like termites. The most common cause of property damage overall is wind, but hail, flooding, and fire are all close seconds. 

How to Protect Your Property

There are many ways to protect your property from damage; these are just a few ideas to get you started. 

Insurance

Insurance isn’t going to prevent damage from occurring, but the right insurance will give you peace of mind that your repairs are covered. 

Surveillance

Surveillance is tricky for landlords because you can’t just spy on your tenants, but sometimes surveillance is okay. For instance, cameras outside the house will hopefully prevent break-ins. Work with your tenants to find the best compromise for this solution.

Respond Before it Gets Worse

Prevent a small problem from growing out of proportion by dealing with it immediately. Here are a few examples:

  • Kill mold before it can spread
  • Fumigate if pests are found
  • Fix minor leaks before they can create permanent water damage

Ensure That Safety Equipment is Accessible

A lot of property damage can be prevented if your tenants have the right equipment at their disposal. For instance, every property should have a fire extinguisher in the kitchen to put out cooking fires. Sump pumps, smoke detectors, and GFCI outlets are other examples of equipment houses may need to prevent or reduce the amount of damage that can happen. 

Route Water Away from the House

Water damage can be devastating. It can also, unfortunately, go undetected for a long time and continue to cause damage.

Your property should have multiple ways to route water away from the house. The last thing you want is a sinkhole eating up your property because water has been draining into the foundation for years. 

Regular Inspection and Maintenance

It cannot be stressed enough that an ounce of prevention is worth a pound of the cure when it comes to property management. Part of being a property owner is ensuring that your investment is in good shape, which means that you should regularly inspect it for damage or potential problems that will cause damage. Regular maintenance such as cleaning the gutters and winterizing the property before it gets too cold are also easy ways to prevent damage.

Make Sure You Have the Right Tenants

You may not be able to prevent a hail storm, but you can know that you have trusted tenants. Our tenant screening service will help you make an informed decision when choosing your tenants. Once you have the right tenants, give yourself even more protection by requiring renters insurance to cover the cost of any damages or stolen property.

Not all damage is preventable, but having a plan and responding quickly is the next best solution when damage occurs. 

Is Accepting Credit Cards for Online Rent Payments Worth It?

Cash used to be king, but in today’s digital society things are changing. Online bill pay has increased in recent years with recurring payments chief among those. And why not? The customer – or in your case, the tenant – sets up recurring payments and it’s paid on time, every time. No need to remember to pay each month. You may have already set up a portal for your tenants to link their bank accounts for online rent payments, but have you considered allowing them to pay by credit card?

We’ve put together a few pros and cons to help you decide if accepting credit cards for rent payments is right for you.

Pros

Quicker Funds

One of the perks of accepting credit cards for online rent payments is the quick turnaround time.

There’s a lot of waiting around with a traditional check. It can be sent through the mail or your tenant may drop it off, but you’ll still have to find the time to deposit the check.

ACH payments are often more convenient, but may take 2-4 (business!) days to transfer to your bank account.

Payments made by credit card are faster and can be batched out as soon as the night of the payment.

Renter Benefits are a Selling Point

If you live in a competitive rental market, you need to find creative ways to stand out. Accepting credit cards is a selling point to many potential tenants. They can build their credit score and earn reward points by paying the rent with their card. 

Get Paid on Time

If your tenant is a little short on funds, accepting credit cards is a great way to ensure they can pay for their rent within the rental agreement’s time frame. 

No Bounced Checks

Traditional check payments and ACH deposits can take a few days before the bank notifies you of insufficient funds. That can throw your budget off. If a credit card is decline, it’ll be at the point of sale. Your tenant will receive an alert, and it will be up to them to make other arrangements. No more tracking them down in hopes that the second payment will go through.

Safe and Secure

One of the many reasons that credit cards are so popular today is they are safer and more secure than other payment forms. The service that you use will have a set of security checks for the card used. This could be the full number, the CVV code on the back, the billing address details, and more.

You don’t have to worry that the check will bounce or you’re being paid with stolen money, and you won’t ever misplace an envelope filled with credit card payments. 

Saves You Time

The most overlooked benefit of accepting credit cards is that it saves everyone time. Instead of having to make individual calls to collect payments or wait for the mail to deliver them, transactions happen in the blink of an eye. 

Cons

Canceled Payments

One of the biggest potential issues to weigh is that, by accepting credit cards, you open yourself up to the possibility of a disgruntled tenant canceling their rent payment on their card or disputing the charge. If this happens, you do have ways to state your case on why the chargeback is not valid.

Fees Involved

When a credit card is used there will be an interchange fee. Depending on the service you choose to use, you may be able to shift those fees to the tenant.

A Learning Curve

As with any new technology, there can be a learning curve to a new form of payment acceptance, but it is pretty small. You can reach out to the service you use to clarify any questions.

Is It Worth It?

Accepting credit cards for rent payments has a lot of value for both landlord and tenant. You’ll save time and provide additional options that your tenant may not get when they rent from other landlords. If you’re ready to start accepting rent payments, let LandlordStation help you set that up today!

7 Best Practices to Win the Bid for a Real Estate Investment

Growing your real estate investment portfolio as an individual landlord is not always easy. Today’s market is tight and investment buyers compete just as hotly for single and multifamily homes as home-buyers. This has led to an environment of bidding wars, sometimes even against commercial investors. How can you win the bid for the rental properties you want without taking major risks like waiving due diligence?

Let’s dive into some of the best practices for winning a residential investment bid in a high-demand, low-inventory market.  

1. Know Your Market

First and foremost, know your market. Be aware of the current housing shortage and the level of demand. Work with your realtor to discover just how frequently (and by how much) local homes and multi-family properties are selling above the listing price. Your realtor may be able to offer some insight into your existing competition, as well.

If you have your eye on a specific property or area, research those neighborhoods. Look for average home sale price and recent jumps in value. Ask your realtor to check in with their network on tips from other agents who have sold in those neighborhoods.

2. Be Ready to Move Fast

When there is competition over investment property – especially if a commercial investor is on the other side of a bidding war – you want to be ready to move fast. Delaying can cost you the property. However, if you make your bid with the position that you are already prepared to close after the necessary intermediate steps, sellers are more likely to consider your offer as serious.

3. Bid Above Listing Price

It’s a seller’s market both in commercial and residential real estate. This means bids should be pitched above the listing price. Not only is this a competitive move to make sure your bid is appealing through the gate, but it’s also a  mark of respect. Bidding above the listing price is a tip of the hat to the value of the property and the owner’s discretion in choosing a buyer. Bidding below the asking price in this market is unlikely to yield results.

4. Look for Both Single and Multi-Family Opportunities

Consider both single-family and multi-family homes. If you’ve had your heart set on single-family homes or a specific multi-family property, be ready to diversify. Single-family homes are still in extremely high demand for both family and investment buyers, while the market for multi-family homes (of various types and price points) will vary more widely from market to market.

Keep your options open and your budget at the ready. You might discover a beautiful (available) duplex for less than you would pay for two single-family homes, an apartment building that is only shabby on the outside, or a desperate single-family home seller who doesn’t have time to clean or stage and so missed by the move-in-ready market demand.

5. Know the Real Level of Competition

Be aware of brokers that may exaggerate how much competition there really is for your bid in order to inspire higher offers. If you start to get that ‘strung along’ feeling, do the research. Ask your realtor to check into how many other bidders there are so you know just how stable or unstable your bidding position really is.

If there are other buyers lined up, you will want to step lightly and quickly. If there is not a throng of competitive bids, you can negotiate with more breathing room.

6. Offer to Buy As-Is for A Fixer-Upper

If you’re having trouble winning bids for perfect move-in-ready properties, consider a fixer-upper instead.

Many landlord investors find their best property deals with an as-is purchase and renovations built into your acquisition budget. While you should not waive due diligence (inspections after bidding), you can win a bid by offering to buy as-is and take care of the renovations yourself.  If you choose to sell the property after renovations instead of renting, this is a fix-and-flip.

7. Consider Investing in Lower-Competition Communities

Don’t get stuck in your own neighborhood. Become a master of the markets by learning how to read which communities across the country are ripe for residential real estate investment. National landlords often track the best markets for rental investment. You may discover a little town in Iowa with a vacant apartment building and a rising need for housing just waiting to become your profits. Or you might find a neighborhood in Tennessee where the housing market is just starting to lift – with great potential, but the competition is not yet so steep as it is close to home.

Explore your options in other states and if you’ll need property management teams to run them.

Buying residential investment property in today’s market is a high-competition endeavor, but you can always strategize to improve your chances and find hidden gem properties. Once the purchase has been made, a property management software solution will help you to streamline your management. Explore LandlordStation as the solution to your property management platform needs for investments near and far. 

Rental Documents Primer

Being a landlord is a full-time job, even if it’s supposed to be a part-time one. Between finding great tenants and answering those late-night calls about clogged toilets, it can sometimes feel like there’s a never-ending list of tasks to accomplish.

One of the best ways to keep your business running smoothly is to organize all rental documents in a neat, meticulous, and accessible way. Failing to produce even a single document at a crucial moment could mean losing thousands from your hard-earned money through lengthy federal or tenant lawsuits. Yes, they’re that important.  Read on to learn more about rental documents.

What Legal Rental Documents Should Every Landlord Keep on File?

Whether you’re a new landlord or an established one, these rental documents are an absolute must-have:

1. Lease/Rental Agreements

Your rental agreement is one of the main legal rental documents you need to get right. This may sound like a no-brainer, but you’d be surprised at the number of landlords that don’t get it right—or don’t even have one in the first place. 

Rental agreements may vary, but the most basic one should include the following:

  • Your rights and obligations as the property manager or landlord
  • The tenant’s contact information 
  • The tenant’s rights and obligations
  • The duration and terms of the lease
  • Payment terms, including when rent is due, accepted payment options, and whether or not your charge late fees

It’s good practice to always have multiple copies of your lease agreements on hand. For each tenant that moves in, have them sign the agreement and retain a copy (this includes the co-signer/guarantor). This way, you’ll be better placed to protect yourself should any legal disputes arise in the future.

2. Rental Applications

As a landlord, it’s standard procedure to ask potential tenants to fill out a rental application. A rental application is simply a form that requests preliminary information about a tenant. 

A typical rental application includes:

  • Basic contact information
  • Proof of income
  • Employment history
  • References
  • Current and prior resident information

If more than one person will be residing in a single unit, or your prospect has a guarantor/co-signor, be sure to ask those individuals to fill out their own application as well. Once you’ve received these documents, begin the tenant screening process right away. Doing this will significantly reduce your risk of leasing to a tenant with a less-than-spectacular rental history. 

3. Welcome Letter

Move-in is just the beginning of your landlord-tenant relationship, so you want to ensure you start off on the right foot. That’s where a welcome letter comes in.

Your welcome letter will help tenants remember and follow the property rules to a tee. Better yet, you’ll be able to answer questions before they’re even asked. You’ll also make an excellent first impression, and tenants will view you as a resourceful and professional landlord.

A good welcome letter will include:

  • Details about move-in day
  • How to set up, use, and pay utilities
  • Where to pick up keys
  • Where to throw away thrash and what day it’s collected
  • A reminder about renters insurance (if you need it)
  • How to report maintenance issues
  • Neighborhood guidance
  • Parking/towing information

4. Mortgage & Property Improvements

If there’s one rental document you should keep for your own sanity, it’s this one. Ensure all the mortgage information pertaining to your property is kept in a safe, easy-to-access place. These documents include your loan information, mortgage, repayment plans, and even the receipts/invoices reflecting improvements done to the property.

5. Emergency Contacts 

Something unfortunate might befall your tenant—they may incur a serious injury, fall ill, or fail to show up at work. As such, it’s incredibly important that you get them to provide you with one or more emergency contacts. You need these contacts so you know who to call if something bad happens.

This information can also come in handy in the event of an unauthorized move-out. If the tenant skipped town while owing you money, the collection agency has a much better chance of tracking them down.

If you’re a conscientious landlord, you’ll call and make sure these people actually exist. Once that’s done, compile the contacts into an accessible file or address book. 

6. Move-In Checklist

Beyond just helping keep track of your property’s condition, a move-in checklist holds your tenants accountable for any damage that occurs during their stay. Without this document, it’ll be your word against theirs after move-out.

For tenants, a move-in checklist provides some much-needed peace of mind, assuring them that you won’t charge for damages they weren’t responsible for.

Make a point of reviewing the checklist when the tenant moves in, and then again during move-out, to find out if there’s any damage beyond the normal wear and tear.

7. A Checklist for Moving Out

If you decide to craft a move-in checklist, then it’s only prudent that you have a move-out checklist in place as well. Alongside the move-in checklist, the move-out checklist paints a complete “before and after” picture of the rental unit.

Unfortunately, some tenants might disagree with or deny any damages you uncovered prior to their move-out day. These types of disputes can land both of you in court. A move-out checklist serves as a crucial piece of evidence in case a legal dispute arises over withheld security deposit funds.

8. Addendum

Do you need to make one or two adjustments to the original lease agreement? Put them in writing using an addendum form, then have it signed by all your tenant to make it legally binding. 

As a best practice, photocopy the addendum for your renters and file away the original one alongside the lease agreement.

9. Tax and Financial Records

This one is an absolute must. None-negotiable, if you may. Generally speaking, all landlords should hold on to the following financial documentation:

  • Record of rental expenses
  • Record of rental income
  • Documentation to support that income and expenses (including receipts, invoices, and other forms of proof as mandated by the IRS).

The last point is often the one that carries the most weight. If you are expensing out things like entertainment and travel for your taxes, you will need to have indisputable proof showing that they were indeed business-related expenses. Why? Because these are the things that the IRS evaluates most closely.

10. Communication with Tenants

Our final ‘legal document every landlord should keep on file’ is actually not one document—but all of them. Well, all the communications you’ve had with a tenant from the day they sent in their application to their move-out day.

Keep all emails and text messages, even the ones that seem inconsequential. We all love the concept of ‘I am a man of my word,’ but that won’t help when you’re having to pay a mortgage due to a tenant defaulting their rent. So, take detailed and dated notes of every communication you have with tenants, including in-person meetings and telephone calls. 

What Documents Should Landlords Receive Fresh Copies Of Every Year?

We see you asking, “But I already have all the aforementioned rental documents and even kept them on file.” That’s great.

However, a smart landlord will know that some of these documents must be updated yearly. After all, no one wants to open a file on the day of a lawsuit only to find that some of the information within is outdated and pretty much irrelevant.

With that in mind, here are some documents and individual pieces of information you should receive afresh every 12 months:

  • Emergency contacts
  • References
  • A signed leased agreement
  • Employment and income details
  • Screening results
  • The renter’s contact information

What Is the Best Way to Research Updates Made to Local and Federal Laws That Could Potentially Impact What Documents to Use?

Looking to find out whether there are any changes made to the federal or your state’s landlord-tenant laws, so you don’t end up using the wrong documents? A quick and incisive search on Google might just do the trick.

For local laws, any new updates are often published in the “pocket parts” of a specific landlord-tenant law book. Every state has several such books, each tackling a specific issue as it pertains to the typical landlord-tenant relationship. For example, if you are a landlord in Texas, the state’s law library recommends that you check out these landlord-tenant books every so often. Nolo has a full state-by-state rundown of landlord-tenant statutes, just in case you need it.

You’ll find the “pocket parts” at the back of each book. Even if the law you’re looking for is in the regular book, you should always check the pocket part to see if any changes to the law have been made. The pocket parts are updated every year.

For changes made to federal laws, your best bet is to keep checking established sites like Investopedia and Cornell Law School. These sites update their content every year, so you can rest assured that you’ll be getting nothing but spot-on, timely, and well-researched information.

Digital vs. Physical Copies: Pros & Cons

Digital Copy Pros

Some of the advantages you’ll enjoy once you start filing your rental documents electronically include:

  • Saves money, effort, and time
  • Better organization
  • Competitive advantage
  • Better than a filing cabinet

Digital Copy Cons

Security is arguably the main (and possibly the only) drawback associated with digital file keeping. This is especially the case if you employ a third party to do the filing for you. Besides, there are way too many hackers out there, and it takes just one wrong click for your most sensitive rental files to disappear into thin air.

Physical Copy Pros

Understandably, there are very few advantages associated with this form of record keeping. After all, no one wants to lose a critical rental file simply because they have frequent memory lapses. 

That said, some of the pros you could possibly enjoy by storing your documents in physical files include:

  • It provides a natural and dependable backup for digital files
  • Always accessible (if the files are kept well, of course)

Physical Copy Cons

Before deciding on which filing option to choose, you’ll want to peruse these physical copy disadvantages first:

  • Takes up a lot of space
  • Prone to damage and being misplaced
  • Hard to make changes
  • Security concerns (definitely less secure than its digital counterpart)
  • Higher initial and maintenance costs

Precautions to Take to Ensure Your Rental Documents are Kept Secure

You already know that you’ll always have a plethora of sensitive tenant and applicant information in your possession. That’s given. Factor in your own files, including those delicate rental income records, and you can see why it’s important to ensure everything is kept safe and secure.

While there’s no single foolproof way to safeguard data, some measures are significantly better than others. These include:

  • Zip it: While it may go without saying, tenant or applicant information is something you shouldn’t be sharing. So, please, don’t release anything unless you have consent.
  • The obvious but overlooked: Making sure your computer is secure is a must to protect sensitive rental documents. To that end, run security checks every now and then to ensure your device is running smoothing and securely. It’s also prudent to set strong passwords for your computer and limit access to it by anyone you don’t want viewing the sensitive information within. 
  • Destroy information, legally: There comes a time that you’ll need to do away with some of the rental documents you’re currently keeping. It’s inevitable. When disposing of confidential documents, it’s important that you do it both properly and legally. The best and most simple way to destroy paper documents is to use a paper shredder. As for digital copies, simply hit the delete button, and you’ll have discarded them for good.

Final Thoughts

While you may have plenty on your plate as a landlord, you can make things easier for yourself by keeping all your rental documents in an easy-to-access manner. It’s also a safety precaution that not only keeps the IRS at bay, but also protects you from any lawsuit that might be thrown your way in the future. Plus, it’s a great way to stay organized and neat.

At LandlordStation, we make rental documentation easy for you. We offer different types of legal rental documents so you can find the ones that best fit your requirements and budget. Who knew legal rental documentation would be this fast, fuss-free, and painless? Contact us today to learn more.

Rent Payment Trends: 5 Key Reasons Why You Need to Switch Online Rent Payments

Research shows that late rent payments is a number one concern for landlords and property managers. The more time you spend following up – calls, emails, texts… sometimes all of the above – is time that you can’t devote to the rest of your business. In the worst case scenarios, you lose even more time filing for an eviction just to get the tenant out.

There are a variety of ways to protect yourself from late or non payments. Screening is always your first line of defense, but a solid rent collection strategy will help encourage your tenants to pay rent on time. It will also boosts your capacity to compete and grow your rental business.

In this interest, we have made a brief rundown of the available options for collecting rent payments (including our #1 recommendation):

Rent Collection Methods

Every landlord and property manager will have slightly different business needs, so we have compiled a list of collection methods.

By Mail

It’s possible to get rent from your tenants through money orders or mail-in checks, but this also means that payments are likely to delay. Worse still, checks may get lost along the way.

Collecting in Person

This method ensures you have a check in your hands on the designated day. However, it may leave you with more record-keeping and miles to travel, thus increasing your operational costs.

Drop-Off Location

If you have an office, tenants can drop off rent payments there. You can use a dedicated drop-off box placed strategically in your rental property. Disputes may arise if a payment goes missing and a particular drop-off location may not be convenient for all your tenants.

Collect Rent Online

This is our #1 recommendation. One-third of Americans have paid a bill late due to forgetfulness, and accepting online rent payments helps simplify and automate that process for both landlords and tenants. When you use an online rent payment system, you and your tenants can take advantage of tools such as automatic reminders and recurring payments to ensure that you receive your payment on time.

Reasons to Switch to Online Rent Payments

Have a look at the following reasons why you should consider switching to online rent payments.

1. Save Time

Collecting rent can be a lengthy process, especially if done by check or money order. You’ll have to:

  • Collect the payments or checks
  • Prepare deposit slips
  • Deposit money order or checks to the bank
  • Post receipts
  • Check follow-ups to ensure checks don’t bounce
  • Adjust your booking keeping

This can take a lot of time, but when you set up an online portal to collect rent payments, you can reduce the time spent on the manual processes associated with paper-based payments by up to 65%. Imagine what you can achieve with more than half of your day back and a hassle-free rent week!

2. Convenience

Paying rent online is fast, easy, and convenient for your tenants as opposed to having them drive to your office or make sure that they get the check in the mail on time. There are a variety of things that can delay a check, but with the ability to pay rent online, tenants can make payments promptly, regardless of location. That means more on-time payments and fewer followups to track down rent.

3. Security

Security is of the utmost importance when dealing rent payments.

Criminology Professor David Maimon from Georgia State University estimates that $11-30 million is being lost across the country due to drop box thefts. He also notes that the information your tenants share via checks and money orders contains sensitive data that—in the wrong hands—can make you and your tenants victims of identity theft.

On the other hand, online rent payments are end-to-end encrypted to mitigate the risk of identity theft and fraud. Your financial data is secure, and your tenant’s financial information is safe.

4. Boost Your Cash Flow

Timely collection of rent is, arguably, the most fundamental aspect of your business. Online rent payment increases the percentage of on-time rent payments, thus creating a domino effect of profitability and efficiency. 

AutoPay and automatic rent reminders streamline the reconciliation of account receivables. As such, you will likely receive full-balance, on-time payments every month, which ultimately boosts your cash flow.

The online ability for your tenants to split rent through an online portal will also allow them to conveniently submit their half of the payment on the day it is due rather than trying to coordinate with each other each month. Once set up, a system such as LandlordStation’s Tenant Portal can charge each tenant the amount owed and deliver it to your bank account in a timely manner.

5. Enhance Tenant Experience and Retention

Offering your tenants pay-on-go flexibility through an online rent payment option will boost your resident’s satisfaction and overall experience at your property. Envelopes, stamps, and checks may seem outdated (and possibly inconvenient) to your tenants, especially the more tech-savvy ones.

According to a study, millennials pay up to 61% of their bills online, while the older generation pays 42% of bills online. If you want to hold on to such tenants, the ability to pay rent online offers them yet another incentive.

When the tenants perceive that you have their convenience, ease, and best interest in mind, they feel connected to the property and to you as the landlord. Happy tenants are more likely to renew their leases, refer friends, and respect the community. 

How We Can Help

In the course of managing your rental property, it’s easy to get overwhelmed by all the nuances and lose focus on what’s important. At LandlordStation, we offer you a full range of products and services guaranteed to make tenant and property management easy and seamless.

Our online rent payment solution is a super brand designed with unparalleled expertise to ensure you receive rent payments quickly and securely. Stop chasing down rent payments and focus on what’s important—growing your business.

For more information on Online Rent Payments or inquiries on how we can help, feel free to Contact Us today, and we will be more than willing to assist.

How to Perform Tenant Screening and Respect Data Privacy

Investing in rental property also means investing in your tenants. Quality tenants keep your property clean, submit timely requests for any repairs, and leave less wear-and-tear on the house. They also pay on-time rent every month. But how do you know which applicants will become your best tenants? That is what the tenant screening process is for, and the laws associated.

Fair housing laws determine the questions you can ask. Local data privacy laws determine what you can do with an applicant’s personal information. Even their name and current address can be the seeds of identity theft, which is why data privacy has become such an important issue. So how does a responsible landlord handle tenant screening, wisely choosing the right tenants while protecting their data in the necessary ways?

As landlord pros, we have a few pointers.

The Fair Housing Act and Tenant Screening

The Fair Housing Act prohibits landlords from asking questions that may lead to discrimination. Unfortunately, this can include questions you might otherwise ask about family, background, and personal plans. You cannot ask questions or make decisions on housing regarding a tenant’s:

  • Race
  • Color
  • Religion
  • National origin
  • Sex
  • Disability
  • Familial status

You can ask about the number of household members, but not about spouses or children. You can ask about the number of vehicles, but not if one is a handicap van. It is even tricky to ask where your tenants are moving from, in case this reveals their national origin.

Data Privacy Laws for Landlords

Data privacy laws vary by state and can vary by city. California has the strictest personal data laws, but many other states include laws regarding how customer data (tenants, in your case) is handled and must be deleted on request. You will want to look up your state’s data privacy laws.

Best practices, however, suggest avoiding possessing any private data. If you can’t avoid, the second best option is to delete any private data you acquire as soon as its use is completed.

Do You Need Sensitive Information to Screen Tenants?

Yes. Part of tenant screening includes a credit, criminal, and eviction check. You will also want to verify each applicant’s employment and income. All of this requires very personal information, like an applicant’s social security number, current address, date of birth, and more. Knowing some of this information can even lead to a conflict of interest between fair housing and landlord decision-making.

Fortunately, you don’t need to personally have this kind of private information on your future tenants. Only your background check and credit check team do. LandlordStation allows landlords to run tenant screenings with just the tenant’s name and email address. The tenant can then – privately – enter sensitive information that goes straight to the credit bureau for the report – but is never seen or stored by the landlord. This is the best way to fulfill all your goals; getting a  detailed tenant screening report, respecting fair housing laws, and protecting tenant data privacy.

How Should Sensitive Tenant Data be Kept?

If you find yourself in possession of private tenant data, perhaps in the form of applications, keep this data under lock and key or delete it to protect the tenant’s data security.

If you store tenant data, keep papers in a locked filing cabinet. Keep digital files in encrypted storage or a data vault with a brand that you trust. In most states with data security laws, you are required to make a reasonable business-class effort to protect your customer/tenant’s data.

What to Do If You Have a Data Breach

What happens if a server or service where you are storing tenant data is breached by a hacking incident or exposed by accident? You will need to follow the data protection laws of your region but, most likely, your requirements include alerting tenants that their risk of identity theft has risen and possibly providing an identity protection monitoring subscription-like Norton LifeLock or Experian IdentityWorks.

LandlordStation Protects Tenants and Landlords from Data Privacy Concerns

Being a landlord is standing halfway between a host and a business owner. On one hand, you need to carefully screen tenants to find reliable and responsible people. On the other hand, you need to handle and hold as little sensitive information about your tenants as possible, especially during the critical decision-making process. LandlordStation offers the perfect solution that creates the shortest, most secure path between the tenant’s information and the credit check reports you need to make a strong decision.

To begin tenant screening with LandlordStation or to explore more of our handy landlord resources, contact us today.

Your Guide to Investing in Student Housing

Expanding your rental home portfolio requires consideration and strategy beyond just finding a home that is rentable and affordable. Each property is an investment and some locations offer a unique business model that you can benefit from. Affordable housing near any college or university, for example, will immediately become a candidate for student housing, a potentially profitable but more volatile form of property rental.

Student housing is livelier, faster-paced, and more accident-prone than typical investments, but also potentially very rewarding. Let’s dig deeper to find out if student housing is a smart investment for your landlording style.

What It Means to Rent Housing to Students

Students in college and university – and their friends already in the job market – are young. They are often renting a home without parents for the very first time, maybe with a little practice from the dorms. They don’t know how to fix things, many students have not yet learned how to clean, and late rent payments with a fantastic (often real) excuse about exams and all-nighters are par for the course. But if you have a thick skin and a sense of humor, student renters also provide never-ending demand. If the university continues to operate, you will have new students every year and may even develop a waiting list for properties near campus.

Pros and Cons of Student Housing Investment

Pros of Renting to Students

  • Endless demand and wait-listing
  • Chain referrals from good student tenants
  • Reliable rent when paid by parents
  • Low cost-cost amenities chosen for durability
  • Small and unusual properties included
  • Never-ending entertainment value

Let’s take a look at the pros of managing student housing. The biggest benefit is that demand is endless. It’s so endless there are wait-lists for near-campus housing and when students change plans mid-year, another roommate is ready to hot-swap and take over the lease. Students tell their friends about great places and you may even get a chain of good, studious tenants who refer each other to your property each year.

Expect students to be inexperienced at rent payment, but often with parental backup. Some parents will even sign the lease. You can choose between durable, low-cost housing for most students or luxury student housing for parents who insist on sponsoring the best for their collegiates. You can also choose properties that would be less appealing as family homes, like small and strangely designed houses, as students are not picky and often like strange spaces.

As an added bonus, students make entertaining and interesting tenants, so if you don’t mind the antics, you will rarely find student housing to be boring.

Cons of Renting to Students

  • Inexperienced renters
  • Untimely rent payments
  • Increased rate of damage and repairs
  • Increased cleaning requirement during turnover
  • Demand for short-term (semester) rentals
  • Roommate hot-swapping

All the pros aside, student housing is challenging to run. You will need energy – or an energetic team – to keep up with minor repairs like dents in the drywall and loose faucet handles. Expect excessive calls for repairs (and drain clearing) or eerie silence with inexperienced young renters who don’t know when to call for maintenance. You may get lucky with a run of reliable young students or unlucky with a pack of partiers. 

Student housing is most adaptive with 6-month leases and even if you enforce a 1-year lease policy, expect hot-swapping of roommates because students are tied to the semester-based schedule.

Special Legal Considerations for Student Housing

Your city or state may have specific regulations when it comes to renting to students or to residents below 18 or 21 years old. Because students do not yet have their full rights  (ex: to drink, book hotel rooms, or rent cars), and some freshmen are still 17 and legally minors, you will want to write your lease carefully and proceed with caution. In most locations, there are no special rules for renting to students and young adults, but the penalties for renting a hazardous unit may be increased if perceived as taking advantage of inexperienced tenants.

With this in mind, use safety and transparency as your rules of thumb. Write a clear lease and make a habit of going over it with new student tenants regarding both their responsibilities and what they can ask of you – like timely repairs. You will also want to pay special attention to safety and repairs during turnover. If the unit is never empty, be sure to schedule annual or biannual inspection-repair visits.

Choosing the Right Property for Student Housing

What kind of houses can you choose for rental student housing? This is an important consideration. The good news is selection is one of the perks for student housing investment. There are exactly three requirements for student housing:

  1. Near to campus (or the bus route)
  2. Safe and livable
  3. Durability

Location and Livability

Students will live just about anywhere, but it must be close to campus, on the bus route, and decently livable. Performing your legal duties as a landlord will more than fulfill most students’ demand for property quality, but location is key. The closer your properties are to a college campus, the more students will want to live there.

Any House, Any Size, Any Style

Students will stay in small houses, homes with strangely shaped rooms, lofts, attics, basements, and homes with no yard. The usual family-friendly considerations need not apply and most students are especially spry if there is a knee-wracking staircase or even a ladder to the loft. Students expect to live closely packed together, to share multi-bedroom homes as roommates, and to take over buildings by moving in with friends.

Interesting apartments are, in fact, one of the rights-of-passage for young adults renting their first homes. Many want to come away with a few strange tales about the attic apartments and strange campus houses they lived in during their wild college years. Older boarding-house-style homes, which are hard to rent room-by-room to any other demographic, are considered excellent student housing. Apartment buildings and townhouse rows can quickly become overrun with student tenants as roommates and neighbors.

Student Housing Durability

The final deciding factor for student housing investment property is durability. Can the house take an endless stream of energetic, inexperienced tenants who may party, exercise, and do unpredictable school projects on premise? The good news is that if you’re ready for light renovation, most homes have the “bones” to be durable student housing, and just need a fresh coat of gloss (read: washable) paint and new laminate board flooring. Throw in a few heavy couches and bed frames, and you’re student-ready.

Create a Custom Student Lease Agreement

Students are not your typical renters, and leases can be written with any terms that are most convenient to the two parties. Write your lease in a way that helps students become better renters by outlining the rules, using plain language, and providing a few training wheels and safety bumpers in the policies to help them learn without creating conflict or debt.

  • Make it a visual syllabus – easy to read
  • Outline house rules
    • Quiet hours
    • Drain care
    • Trash day
  • Flexible rent payment dates and penalties – training wheels
  • Included utilities or links to utility providers
  • Room for roommates
    • Wait-lists and referrals
    • Hot-swapping leaseholders
    • Guests and long-term guest policies
  • Copies available on request and online

How to Screen Student Tenants

Screening student applicants can be challenging because they do not already have a rental or credit history. Most have just taken their first big financial step in life – by taking out student loans. How do you screen a student tenant with no financial history to show their suitability? It is possible to ask more holistic questions while respecting the fair housing laws about certain personal details.

Ask Student-Housing Questions

  • Do you have roommates ready to move in with you?
  • Do you require roommate match-making?
    • see – your waitlist and other applicants
  • When does your school term begin?
  • Will you be staying through the summer?
  • Do you see yourself in this home for your duration at this school?
  • Do you have pets, or do you plan to get a pet?
  • What are your personal quiet hours for sleep or studying?
  • What is your field of study or chosen degree?

Have Parents Co-Sign the Lease

One of the cleanest solutions is to have a parent co-sign the lease and take responsibility for timely rental payments. From there, you can do the usual tenant screening checks on the parent to confirm sufficient income, a reliable credit score, and a good rental history.

Managing The Revolving Door of Student Housing

Student housing is a profitable and extremely active way to invest in rental homes. students change their housing situations every semester and every summer break. You may have students who stay put for all four years of school and students who only stay for a few months before hot-swapping their lease with another resident.

Fortunately, you don’t have to manage your lively student housing investments solo. With online tools like LandlordStation to streamline your property management and help students keep up with online bill-pay, helpful documents, and maintenance requests, you can simplify the effort of managing student housing.

To discover online property management through LandlordStation, contact us today!