Proper bookkeeping is crucial to the success of any landlord.
And, as portfolios begin to build, one tenant turns into ten, and the amount of documents you must keep on hand for not only your rental properties, but those occupying them, continues to grow.
The next thing you know, your need for a paperless solution becomes dire.
You may have been toying with the idea of going paperless with your rental property business for some time now.
After all, there are many reasons why going paperless is a good idea.
Or, perhaps you are just beginning to grow your Severna Park portfolio, and have yet to think about going paperless because you simply have too many other things going on.
No matter what stage you are in with your rental property business, now is as good a time as ever to think about going paperless with regards to managing your rental property.
Regardless of how many rental properties you own, going paperless will get you one big step closer to being more organized, efficient, and as a result, more successful.
Keep reading to find out some of the key reasons making management of your rental property paperless is a good idea, and along the way learn some exceptional tips for how to get started.
Why Should You Consider Taking Your Rental Property Management Paperless?
It has been suggested that those taking their rental property businesses paperless have gone on to out-perform their competition.
Here are several convincing reasons why taking your business paperless is a good idea:
- Cost Effective. Sure, you will need to invest in some equipment when it comes time to make the switch to a paperless business. A computer, scanner, and software meant for bookkeeping are all required to keep paperless documentation in order. However, no longer having to pay for printers, toners, fax machines, and paper far surpasses your initial paperless business equipment costs.
- Environmentally Friendly. As paper consumption decreases and recycling of paper increases, the environmental effects of going paperless in America are easily seen. With each office worker using approximately 10,000 sheets of copy paper each year (that’s a whopping 4 million tons of copy paper amongst all office workers!), it is no wonder more business are striving to do their part and go paperless.
- Data security is more important than ever. Your tenants want to know that the information you collect about them is secure from thieves looking to steal identities. By going paperless, you greatly reduce the risk of paper documents getting into the wrong hands.
- Easy Retrieval. With the advancement of things such as cloud storage, it is not likely you will lose an important document forever. Unlike paper, which can be destroyed, lost, and never returned, so long as you conduct proper backups of your business documents, retrieval of most any document is possible.
- Better Communication. Not only can you communicate with more people and quicker than ever with modern technology, when you communicate electronically, you also save on things such as paper and postage costs.
- Increased Organization. Say goodbye to mixed up file cabinets stuffed with manila folders, locked boxes with lost keys, and piles of paper crowding your desk. Instead, say hello to easily organized electronic folders, all neatly tucked away in computer software that is retrievable with a quick and simple query. Being organized with a paperless system will help ensure your status as a successful landlord.
As you can see, there are plenty of reasons to consider taking your Anne Arundel County rental property business paperless.
How to Go Paperless with Managing Your Severna Park Rental Property
1. Electronically Share Important Documents
For documents that you need to share with your tenants, try doing the following:
- Scan Using Your Computer. Scan and send a paper copy of the lease agreement to your tenant. Just make sure it is in a PDF file to prevent any chances your tenant may have to edit the document before signing and emailing it back to you.
- Get a Fax Software Installed. Sometimes faxing documents is the only way to communicate. This is especially true with tenants. After all, not everyone has access to a scanner. However, faxing information is a cinch, and can be done at any local office supply store. If you prefer not to use an actual fax machine, just have the software installed onto your desktop so you can send and receive faxes via your computer.
- Use an E-Signature Service. Uploading PDF files to specific software, complete with e-signature fields for signing, is an easy alternative to having a paper copy of a signed lease agreement. This may be especially helpful for those signing lease renewals since the tenant is already aware of what the lease agreement contains, and needs no additional explanation.
2. Store Electronic Documentations
In addition to sharing and signing documents electronically, you can easily store all of your business’ most important paperwork locally and via the cloud. Take for instance the following:
- Store documents locally on your computer, backing up all files to an external hard drive just in case
- Use a storage service such as Dropbox or Google
- Save in other cloud storage services, complete with password protection to boost security measures
- Utilize the help of your property management company’s paperless interface for collecting e-signatures, saving important documents, and sharing paperwork with tenants, all from one convenient location
3. Avoid Printing Everything
It is an “old habits die hard” kind of thing when it comes to making the switch from a paper business to a paperless one.
Your instinct to print everything will be strong at first. This is usually because trusting electronics to keep everything secure is a scary thought.
However, once you begin to trust the system, you will see that there is very little that needs to actually be printed and kept on hand.
Everything else can stay safe, secure, and organized in your computer, freeing up tons of office and desk space.
4. Develop a Filing System
Just because you are not dealing with physical paperwork anymore does not mean you don’t need an efficient filing system in place. After all, you still have to organize all of the scanned, e-signed, and shared documents.
Here are some key tips:
- Invest in software geared towards property managers, so you have the right functionality to handle everything related to your rental properties and tenants
- Define a naming system when it comes to your folders, files, and individual document names – consistency is key
- Create an easy to understand subfolder system for your rental properties, individual tenants, and everything in between, such as rent collections, maintenance requests, and legal issues
- If you work with a team, define roles and responsibilities clearly so everyone knows who is responsible for what
5. Deal with Online Payments
If you are going to go paperless with your rental property business’ documents, you might want to consider going financially paperless as well.
- Online Rent Payments. This is one of the most convenient and secure ways of collecting rent payments. Most tenants will be familiar with making payments online, as this is how many businesses operate these days.
- Pay Vendors and Contractors Online. In addition to collecting rent online, it is a good idea to make your own payments online as well. This way, you remain consistent with your goal of being paperless and prevent issues in the future with vendors and contractors that do work for you.
In addition to dealing with all payments online, it is also smart to invest in some accounting software to help you balance the books more efficiently.
Utilizing a spreadsheet leaves a lot of room for errors, and leads to an auditing nightmare come tax time.
Entrust the software to help you out, and make your life easier.
In the end, there are many benefits to going paperless in the management of your Anne Arundel County rental property.
From saving you time and money, to keeping you extra organized and more efficient, both you and your tenants will appreciate the reward of going completely paperless.
That said, going paperless can be a huge transition, as beneficial as it may be.
For those looking to have someone else complete the paperless transition for them, contact Bay Management Group today. Not only can we keep all of your accounting and bookkeeping in order, we implement a paperless friendly environment when it comes to many things such as rent collection and maintenance requests.
Get in touch today and see how we can help you get your documents in order and online, while you enjoy the finer parts of being a property owner, such as a cleaner office space, positive cash flow, and more free time.