Today I’d like to pass on something I have shared in our local REIA group with regards to working with your tenants during this time of crisis, especially if they have recently become unemployed or furloughed.
If you have rentals and have not done so already, it might be a good idea to reach out to your tenants and check in with them. Due to various business shut-downs, lock-down, and stay-at-home measures, they may have become unemployed. Depending on their financial situation, it may make it difficult for them to pay their rent.
Below is a copy of what we sent out to tenants:
Hi, Tenant
How are you? We hope you and your family are staying healthy and getting by at the moment. While I don’t know exactly how the coronavirus situation has impacted you, I’m sure it has not been easy. Personally, my family and I are going a bit stir-crazy, but are taking the down time to ride our bikes and totally redo our landscaping, (who needs the gym, right?)
I imagine you are spending more time more time at home than usual, given the current circumstances. Maintenance people are tough to schedule right now due to safety concerns, but please do not hesitate to reach out if there are any maintenance issues so we can make your your extended time at home more comfortable.
If you have any other needs or issues, again, do not hesitate to contact us.Below is a link to a list of resources that may be helpful during this trying time:
Since we currently cannot conduct eviction proceedings, (and to be honest, this is not the time to be evicting people unless you were already planning or in the process, more on that in a bit), I think it would be best to work with your tenant to see what they can pay, and accept that with the understanding that the balance is still owed. You can work out a repayment schedule over, say, 10 months or so, starting in May. This gives the current craziness time to settle down and should make the payments small enough so that it does not wreck their budget. This assumes your tenant is staying with you long-term.
Additionally, you should get this repayment agreement written up as an addendum to your lease. This will provide a paper trail of it.
***DISCLAIMER*** I am not an attorney and I do not play one on the internet. Please consult your attorney for proper legal phrasing.
Now, if you were already in the process of evicting someone or preparing to, one option you can try is “Cash for Keys”. This is obviously not without cost, but could possibly give you a quicker resolution than waiting to evict them. The way cash for keys works is that you offer the tenant you want to leave a lumps sum dollar value to vacate the property, leaving it in undamaged clean condition, within a certain number of days. You frame it to them as something to help them find a home that better suits them. And, unless there is already a lot of damage to the property, give them back their full deposit to expedite the process. This will help to keep them from damaging the property before leaving.
Today I am going to do a review of Stessa, an online rental
property accounting platform.
But first, a disclaimer:
***This review may contain affiliate links that compensate me for user
registrations of this product.***
As I have detailed in a previous article, I started using Stessa
last year to track accounting for our rental portfolio. Previously, we used
Google Sheets, tracking rental income and expenses for each property on
different tabs. This would involve me going in to the first property’s income
tab, entering the collected rent, then checking all of my receipts and accounts
to verify I hadn’t missed any expenses and adding them to the expense tab for
that property. I set up expense categories and put in a section to summarize
the expenses by category and by month. While not ideal, it insured that someone
at my CPA’s office was not classifying an expense in the wrong category or for
the wrong property. It was not hard to do, just more a matter of remembering to
do it.
Around the middle of 2018, I started seeing advertisements for a product called Stessa on Facebook. As per my SOP, I ignored them, other than taking note of the name. A few weeks after first seeing the ads, I heard an advertisement for it on The Bigger Pockets Podcast. This was more effective, as they pointed out how it was free for rental property owners and individual investors and involved some automation to keep track of your accounting. They also pointed out how the product was developed by real estate investors for real estate investors and the name was “assets” spelled backwards.
I went to the web
site and registered for it. I was able to set up our properties and import
bank & credit card histories to the transactions section, allowing me to
categorize each expenditure. It took maybe 10 minutes to set up two properties.
And, once numbers had been entered, the dashboard populated with portfolio
metrics. Way nicer than my spreadsheets!
Features
Individual tracking for each property:
Property Profile
Header – Address, Acquisition Date, and Cost.
Property Details
– (Year built, neighborhood, parish [county, for those of you outside
Louisiana], number of units, bedrooms, bathrooms, square footage, and lot size,
all pulled from Zillow, based on the address.)
Valuation – Provides
for multiple options: Custom Valuation, Zillow Zestimate (automatically polled,
user choice to update property valuation), Gross Rent Multiplier, or Capitalization
Rate.
Rent Roll – Allows
entry of Bed/Baths, Square Feet, Tenant names, Rent, Market Rent, Deposit,
Move-in Date, Lease Expiration Date, and notes.
Property Notes
section – Freeform note space for property.
Monthly Expenses –
Allows for Pro-Forma expense entry and pulls in categorized expenses from the
Transactions section to show actuals compared to Pro-Forma.
Neighborhood –
Shows location on a Google map, with a Walk Score and a Bike Score for the
property.
Assessments –
Pulls in assessed value and property tax amount (I’m assuming from Zillow), and
allows you to add missing assessment/tax details.
Capital Expenses –
Allows for entry of Date, Description, & Amount of Capital Expenditure.
Loan-to-Value –
Shows a chart with LTV percent, Property Value, Debt (principal balance), and
number of loans.
Mortgage – Details
the Lender, Principal Balance, Payment Amount, and Interest Rate.
Insurance –
Displays the Carrier, Premium, Policy Number, and Renewal Date.
Transactions:
As I mentioned above, Stessa
allows you to link bank accounts and credit cards to the Transactions ledger.
It lets you initially import all transactions and gives you the option to
review them to either categorize each one correctly or, in my case, the credit
card I use also has personal charges, so it it allows me to delete those
transactions.
Stessa does not store your credentials on their servers and
use bank-level encryption to secure the transfer of information. It also does
not allow changes to your bank or credit card accounts. It only pulls a copy of
your transaction information.
The Transaction Ledger Menu allows you to review new
transactions, view ALL PROPERTIES transactions, view individual property
transactions, or add a new property.
The main Transaction Ledger display shows all transactions, filtered,
based on the menu selection. It additionally allows you to search by keyword
and/or filter by Date, Category, Amount, or Account.
There is also an export function, allowing you to export
filtered transactions to a *.csv file.
You can manually import *csv and *.qif files from accounting
software, in addition to adding individual transactions by hand, such as
mileage.
Reporting – Reporting is one of the reasons I was interested
in trying out Stessa in the first place. It provides you with standard reports
such as Income Statements, Cash Flow, and Capital Expenditures, with options to
select a date range, property/portfolio, monthly breakout, and whether or not to
show Category Details. The report is downloaded as an Excel file, allowing you
to customize the report title and report formatting, if needed.
The other reporting option I have mentioned before is the
Tax Package. This contains everything needed to hand off to your CPA at tax
time. And it sure makes it easier on me!
The dashboard is the main page you see when logging in on a
computer. It allows you to show the total portfolio or to select individual
properties.
It contains the following sections:
Portfolio Value – Options to see Market or Purchase Value.
Asset Return – Either Appreciation or Levered returns.
Occupancy – Detailed in percent.
Income
Cash Flow
Unit Count
Property Count
Debt – Total
Net Cash Flow – A chart detailed by month & Category
Location – Google map showing all properties in Portfolio
View or a single property in Property View
Compare Properties – Rental Income, Market Value, and Square
Feet. Available in Portfolio View only
Property Highlights – Property picture from Google Street
View, Income, Expenses, LTV, and Occupancy. Available in Property View Only
Summary
I think that Stessa is a great automation tool for rental property accounting. It’s free, cuts down on time spent doing bookkeeping, and makes tax time easier. On top of that, their user support is outstanding! Early on, I identified a couple of bugs and they were fixed within a couple of days. Amazing!
If you are interested in trying out Stessa for your rental properties, please click on the link below:
A few months ago, I ran across an ad for a free rental property accounting web application on Facebook. I didn’t think much of it and continued on about my merry way. Then I started hearing ads for the same company on the Bigger Pockets Podcast. So, I decided to check out Stessa for myself.
I like it! Stessa is simple to use and allows you to output
your financial data to hand over to your CPA at tax time. As a perk, the team
at Stessa put together a free Rental Property Tax Guide. I liked it so much
that I have partnered with Stessa to share that Tax Guide with my readers.
Hello there, trusted reader! This week I am going to discuss
a few observations I have made on the subject of finding tenants for my
rentals.
As discussed in a previous post, we purchased another rental in December. Before the purchase was final, we started advertising it for rent. We listed it with a couple of different syndication services, Put a “For Rent” sign in front of the property, and posted it in pretty much every local and/or rental-related group on Facebook, in addition to posting it on our Facebook business page.
Syndicated Listings
Cozy.co
The property was listed on Cozy.co because we are evaluating their service for application, rental payment, and other tools that assist property manager.
The set up was easy and they list the rental as available on
their site, in addition to syndicating the listing to Doorsteps.com and
Realtor.com.
Cozy also offers one of the top-rate low-cost online rental
payment platforms, based on reviews & comparisons. If tenants use the ACH
(Automated Clearing House) option, payments are free. They also have the option
to use a credit card to pay, but add a small percentage service fee. I have not
implemented it in our business yet, as our tenants are more comfortable paying
with checks and money orders.
In addition to the online rental payment system, Cozy provides
an online maintenance request system, tenant screening, and document sharing
with tenants. The maintenance request platform is only available if you are
already using their online payments. The tenant screening offers options for
background checks and credit reports, at no cost to the property manager, due
to the tenant paying these fees. The document sharing is the equivalent of a
shared drive to upload leases and any other documents for tenants.
Cozy Syndication
From our experience, neither the Cozy listing, nor the syndication
partners are popular in our area for attracting potential tenants. People
looking for places to rent don’t seem to frequent these sites.
Zillow Rental Manager
Zillow offers a similar set of services, excluding the maintenance requests and document sharing. They provide tenant screening and online rental payments, similar to Cozy. Where they really shine is the listing syndication. Zillow lists rentals on Zillow.com, but since it also owns Trulia.com and Hotpads.com, it syndicates listings on those sites simultaneously.
For this recent property we had issues getting the rental listing to be accepted by Zillow due to it still being listed for sale on Zillow when we first put it up for rent, but it syndicated to Trulia and Hotpads just fine. We received quite a few inquiries from these sources.
Facebook Groups/Facebook Business Page
Facebook seems to be the hands-down winner for attracting
prospective tenants. We ultimately received more inquiries from Facebook than
any other advertising channel that we used. It involved a little work…there are
a lot of groups! I will post a detailed methodology on that some day. It is
kind of interesting.
I created a video of pictures from the home and a digital
flyer that was shared on and from our Facebook business page. The flyer listed
the location, rental rate, the lease length, and basic restrictions (No
smoking, some pets allowed). This helped to attract interested inquiries and
potentially screen out anyone not interested in what we had to offer.
Traditional Advertising Channels
If you haven’t noticed yet, the only cost of the methods we
utilized was a “For Rent” sign. Ads in the local newspapers cost too much, plus
we have much better circulation on the channels we do use. That is why we don’t
even bother to list anything in the with the papers.
