Digital Landlord Secrets: Redefining Property Management

When most people start to build their real estate portfolio, they focus on finding good deals and generating rental income as quickly as possible. Software and digital tools aren't always top of mind. Before they know it, they have several properties, and they're trying to manage operations while still seeking out new deals. There's a breaking point when it's time to say "uncle" and figure out a better way.

That's where being a digital landlord comes into play. The term might sound intimidating, but all it really means is that you leverage technology and digital assets to make property management more efficient.

In this article, we'll cover the benefits of taking a digital approach to landlording and explore the tools and platforms that enable this modern way of doing business. You'll discover how to automate tasks like tenant screening, lease management, rent collection, and maintenance coordination. We'll also examine marketing strategies, smart home technologies, and analytics that can further enhance operations and portfolio performance.

Becoming a digital landlord allows real estate investors to spend less time on administrative burdens and more time growing their businesses. This guide provides a roadmap for harnessing technology to optimize operations and maximize returns across your rental property portfolio.

What is a digital landlord?

A digital landlord uses technology to manage rental properties more efficiently and effectively. This approach includes using online platforms to automate property management tasks like rent collection, lease management, and maintenance requests.

It's easier to build a real estate portfolio when you add automated systems, as they allow you to spend more of your time looking for new rental properties instead of administrative tasks.

The pros and cons of being a digital landlord

If you're looking at becoming a digital landlord, consider the pros and cons of this route for your property management company or real estate portfolio:

Pros

• Efficiency: Digital tools streamline many property management tasks, saving you time and reducing manual work.
• Convenience: Online property management software and digital tools allow you to manage your rental property from anywhere in the world.
• Tenant communication: Automated messaging and notifications keep tenants informed and engaged, increasing tenant satisfaction and reducing turnover and vacancy rates.
• Better organization: Digital storage of documents and records gives you easy access to key information and also provides better security than paper copies.

Cons

• Initial setup costs: Investing in digital tools and platforms may involve an initial expense.
• Learning curve: Adapting to new technology can take time for landlords unfamiliar with digital tools.
• Tenant adoption: Some tenants may prefer traditional methods and may be slow to adapt to digital processes.

Digital landlord operations hub

Property management software is the brain behind all digital landlord tools. It's the central place where landlords can manage and automate various operational tasks. Here's how you can use this software to make running your rentals easier:

Online rental applications

Using online rental applications speeds up the tenant application process and makes staying organized easier with the following:

• Streamlined process: Prospective tenants can apply directly through an online platform, simplifying the application submission.
• Automatic organization: The software then automatically organizes and stores submitted applications, making it easy for landlords to review and compare candidates.

Tenant screening

Property management software has built-in screening tools to evaluate potential tenants and help you select reliable renters for your properties. Here’s how:

• Credit score checks: Your application can confirm compliance with FCRA to document the applicant's agreement to a credit check. From there, the software provides the tenant’s credit scores and reports.
• Rental history: Access information about the tenant’s rental history, including previous addresses, duration of stays, and feedback from former landlords.
• Criminal background checks: Tenant screening can also provide criminal background checks to help you verify the safety and security of your property and other tenants.
• Employment and income verification: Screening also verifies the tenant’s employment status and income to make sure they can cover rent.

Lease management

Once you've selected a tenant, you can create, send, and sign lease agreements digitally. This saves time with:

• Digital leases: Easily draft customized lease agreements that help you comply with local laws and regulations. You can send these lease agreements electronically, and both parties can sign them online, which removes the need for in-person meetings or mailing documents.
• Automatic reminders: Receive automatic reminders for lease renewals and expirations so that you never miss important deadlines across your rental properties.

Rent collection

Automating the rent collection process using digital tools offers convenience for both landlords and tenants through:

• Collecting rent: Enable tenants to pay rent electronically through various methods such as ACH transfers and credit/debit cards. You can also allow tenants to set up recurring payments so that you can consistently collect rent without manual intervention.
• Automated reminders: Set up automatic rent reminders to notify tenants of upcoming due dates, reducing the chances of late payments.
• Real-time tracking: Monitor rent payments in real-time so you can see who has paid and who is overdue.
• Digital receipts: Automatically generate and send digital receipts to tenants when they pay rent so everyone has clear and organized records.
• Late fee management: Automatically apply late fees for overdue payments per the lease agreement so that you don't have to track this manually.
• Record-keeping: Maintain a centralized digital record of all rent transactions, making financial management and reporting much easier.

Maintenance tracking

Ongoing maintenance can be a challenge to keep up with. Here's how property management software helps you oversee repairs:

• Online submission: Maintenance software allows you to provide tenants with an easy way to submit maintenance requests online. They can quickly report issues and track their status in real time.
• Automated workflows: Automatically assign maintenance tasks to the appropriate personnel or contractors, streamlining the process and reducing response times. You can also set up automatic reminders and alerts for upcoming maintenance tasks and scheduled inspections so that nothing gets overlooked.
• Prioritization: Easily prioritize maintenance requests based on urgency and importance so you can promptly address critical issues.
• Maintenance history: Maintain a digital record of all maintenance activities, including request details, actions taken, and completion dates for easy reference and tracking.
• Reporting and analytics: Generate reports and analyze maintenance data to identify trends, optimize processes, and plan for future maintenance needs.

Financial management

Real estate investors who want to grow their portfolios need to have a solid handle on financial data. These software tools help you become a successful digital landlord by providing:

• Income and expense tracking: Automatically track and categorize all income and expenses related to your rental properties, providing a clear financial overview. You can then make decisions about your rental property operations and any changes you need to make.
• Automated invoicing: Generate and send invoices to residential and commercial tenants for rent and other charges, streamlining the billing process.
• Financial reporting: Integrated accounting software provides detailed financial reports like profit and loss statements, balance sheets, and cash flow for accurate and up-to-date financial information.
• Tax preparation: Make tax preparation less painful with organized financial records and automated calculation of deductible expenses so you can maximize all the benefits of real estate investing.
• Budgeting: Create and manage budgets for each rental property, helping you plan and control your costs.

Monitor performance

As a real estate investor, you can use these digital assets to track and analyze the performance of your rental properties and to help guide decision-making with:

• Real-time analytics: Access real-time data on various aspects of your properties like occupancy rates, rental income, and maintenance costs.
• Key performance indicators (KPIs): Track your most important KPIs like gross rental yield, net operating income, and tenant turnover rate to assess the financial health of your properties.
• Dashboards: Use digital landlord dashboards to visualize key metrics and trends so you can easily see performance at a glance.

Additional tools for digital landlords

Once you've covered digital real estate core operations, you can layer in additional solutions to help your rental business:

Virtual tour software

When you need to list vacancies and find new tenants, using virtual tour software can have a positive impact on your marketing efforts. You can integrate virtual tours into your online property listings, giving prospective tenants a comprehensive view of the property without needing to visit in person.

Marketing and listing platforms

Online platforms like Zillow, Trulia, and Apartments.com help landlords advertise vacant properties and reach a larger pool of potential tenants.

Smart home technologies

Incorporating smart home technologies can make it a lot easier to manage properties. These digital tools are especially helpful if you are in the vacation rental real estate industry. Here's how these technologies can help:

• Improved security: Smart locks and security cameras allow landlords to monitor properties remotely, control access, and receive alerts about any suspicious activities.
• Energy efficiency: Smart thermostats enable more efficient heating and cooling management. Landlords can set and adjust temperature schedules remotely, reducing energy costs during unoccupied periods and providing a comfortable environment for guests upon arrival.
• Remote management: Landlords can manage various aspects of the property remotely, such as granting access to contractors for repairs or cleaning services between guest stays. This flexibility makes sure that the property is always ready for the next guest.

Becoming a digital landlord

Ready to become a digital landlord? Here are the steps to help you get started:

Step 1: Assess your needs

Determine which aspects of your property management can benefit most from digital solutions and set clear goals for what you want to achieve by going digital. Examples could be reducing manual workload, improving tenant satisfaction, or even helping to grow your property management company.

Step 2: Choose property management software

Look for all-in-one platforms like Azibo that offer comprehensive features such as tenant screening, digital leases, online rent collection, maintenance tracking, and built-in financial management.

Take advantage of free trials or demo versions to evaluate solutions that best meet your needs.

Step 3: Digitize documentation

Scan and upload all existing property documents, leases, and records into your chosen management software. This verifies all your important information is easily accessible and securely stored in one centralized location.

Step 4: Set up rent collection

Inside the management software, set up your workflow for collecting rent and configure automatic rent reminders and late fee applications.

Step 5: Improve tenant communication

Use the messaging features within your management software to send automated notifications and updates. Provide tenants with access to an online portal where they can manage their lease, pay rent, and submit maintenance requests.

Step 6: Implement smart home technologies

Equip your vacation rental properties with smart locks, thermostats, and security cameras for enhanced security and efficiency. Set up the apps to control and monitor these devices.

Step 7: Optimize property marketing

Enhance your listings with virtual tours to allow prospective tenants to explore the property virtually. List properties on multiple platforms, including long-term and short-term rental sites.

Step 8: Train and educate

Make sure your property management team knows how to use the new software and tools. Provide tenants with information on how to use digital platforms for payments and maintenance requests to help them adopt the software effortlessly.

Step 9: Stay current with technology

Participate in industry forums, webinars, and workshops to learn about new tools and best practices and stay current with the latest trends and advancements in property management technology.

Compliance tips for digital landlords

To be a successful digital landlord, you'll need to stay compliant with legal requirements to protect your property and avoid potential liabilities. Here are some key legal considerations to keep in mind:

• Fair housing laws: Be sure that your property management practices comply with federal, state, and local fair housing laws. This includes avoiding discrimination based on race, color, religion, sex, national origin, familial status, or disability. When creating online listings, use inclusive language and avoid any terms that someone could interpret as discriminatory.
• Tenant privacy: Respect tenants' rights to privacy as outlined in lease agreements and local laws. This includes providing proper notice before entering rental units and only accessing units for legitimate reasons, such as repairs or inspections. If you use security cameras or other monitoring devices, inform tenants and comply with local laws regarding surveillance and privacy.
• Record keeping: Maintain detailed digital records of all transactions, communications, and agreements with tenants. Understand the legal requirements for document retention in your area to make sure you keep records for the required period.
• Local regulations: If you have short-term rentals, be aware of local regulations and zoning laws that may restrict or regulate such rentals. Obtain any required permits and comply with occupancy limits and safety requirements.

Costs associated with being a digital landlord

What does it cost to be a digital landlord? Let's give you an idea of what you can expect:

• Property management software: Monthly or annual fees for property management software can range from $20 to $2000+ per month. However, if you use Azibo's comprehensive solution, most features are free for landlords. Applicants pay for screening fees and credit/debit fees for online rent payments, while ACH payments are free.
• Virtual tour software: The cost of creating virtual tours varies. DIY options using smartphone apps can be free, while software solutions can start at $10/month and go up from there, depending on features and capabilities.
• Online listing fees: Basic listings on many platforms are free, but premium listings have a cost. For example, Zillow's premium upgrade is $29.99, which covers a listing for 90 days.
• Smart home technologies: Installing smart home devices can cost between $200 and $1,000 per property. Also, research the costs for maintaining and upgrading these devices to make sure they remain functional and up-to-date.

Digital landlords: Paving the way

Being a digital landlord is the future of property management. Digital tools can help you scale your portfolio efficiently and profitably, automate time-consuming tasks, gain data-driven insights, and integrate cutting-edge technologies into your operations.

Adopting digital solutions positions you firmly at the forefront of the industry. It allows you to stay ahead of competitors who are still relying on outdated processes and capitalize on emerging opportunities for portfolio growth. While others are stuck spinning their wheels, you'll be the landlord kicking it into high gear down the digital fast lane.

Digital landlord FAQs

What is the digital landlord method?

The digital landlord method involves using technology and online platforms to manage rental properties efficiently. This includes automating tasks like rent collection, lease management, and maintenance requests through property management software.

What is digital leasing?

Digital leasing is the process of creating, sending, and signing lease agreements electronically, eliminating the need for physical paperwork and in-person meetings.

What is digital rental passive income?

Digital rental passive income is the money generated from owning rental properties. These properties are managed online with minimal ongoing effort, often using automated tools and property management software.