Author: Alita Hall

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Efficiency: Tenant Onboarding

Now if you have been following my blog, you know that we have already covered employee onboarding and how that helps keep your business running efficiently. Onboarding a tenant also helps and that is what we are going to focusing on in part 5 of our Efficiency series.

Onboarding starts at the very beginning when he or she is still a prospect. The purpose of taking you tenant through an onboarding process is so that he or she knows what their responsibilities are and what he or she can expect from you, the landlord. In the beginning this is the application and screening process.

Establishing your screening process early on and having a scoring worksheet handy for tenant viewing will let every prospect know what is required from them to rent from you. This keeps you compliant with the Fair Housing laws. The beauty of making this worksheet available to view for your tenant is it will weed some of the prospects out before they even get to the application process.

The next step in onboarding is your application process. How clear is this to your prospects? Do they know what kind of documentation you require when they are filling out the application? Are you coupling the Consent for Background Check with the application? If not, this is the perfect time to do so. Be sure to get a copy of their Driver's License or State Issued ID and Social Security Card after the consent form is signed. Also, how are you performing the background check? Contemporary Information Corporation (CIC) has a very detailed and thorough background check report. You can check them out HERE.

The Fair Housing Act is explicit with its criteria for turning an applicant into a tenant, I am paraphrasing but, the first applicant that meets all of your requirements is the person(s) you rent to.

Now we can get into the meat and potatoes of today's post: What happens once you have agreed to rent to the applicant.

Now that you have agreed to rent to the applicant, it is time to have them walk through the unit with your move-in checklist, make sure to have them notate anything out of the ordinary as being there BEFORE they move in. Performing the walkthrough before lease signing help you, the landlord, by establishing what was there before the tenant in the event they move out and you need to assess any damages. After the walkthrough is completed, we can move to lease reviewing and signing.

Yes! It's time to go over the lease. This part is CRUCIAL to your onboarding process. Making sure to go over the lease and have the applicant initial those key points of your lease can alleviate any "I didn't know" excuses from your tenant when it comes to lease violations. It also lets them know exactly what is expected of them and of you, Landlord. It is one more layer of protection for you as well. Now that they have signed it, paid the security deposit and first month's rent, you can hand them their keys, and welcome them to their new home!

In roughly two weeks, send them a welcome gift of some sort along with the dates of your preventative maintenance inspections. If you are not doing preventative maintenance inspections, stay tuned to our blog for more on that.

Congratulations!! You have successfully onboarded your tenant. Now he or she understands their role as your tenant and your role as their landlord. For more information on this topic, please do not hesitate to reach out to AMH. We are here to help.

AMH Bookkeeping, LLC….The Landlord's Bookkeeper.

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Efficiency: Documents

Welcome to Part 4 of the Efficiency series. In this post we are going to talk about document preparation, retention, and filing for accounting and bookkeeping purposes.

Paperwork, YIKES! It is a necessary pain for all business owners. Applications, consent to background and credit checks, lease agreements, income verification, and so much more.  Of all the document types there are, this post will focus on those needed for rental property owners in regards to their accounting.

Let's get into it.

As a bookkeeper for rental property owners, I have developed a set of documents I require to accurately record transactional data for my clients. Depending upon your bookkeeper of the choice, the amount of work they do versus the amount of work you do, and the timeframe the work is completed in, this document set may be different.

  • Bank Statements
  • Credit Card Statements
  • New Tenant Info - Name, Unit Number, Rent Amount, Amount of Security Deposit, and payment method
  • Ex Tenant Info
  • Itemized Deposit Return Letter
  • Copy of Security Deposit Check
  • Deposits Slips - Must have unit number, amount, and payment method of each tenant
  • Copies of Checks written
  • Any other document created from the resort of a transaction concerning your business finances

These are the documents that need to be compiled and prepared as applicable to each month or other period the accounting is done in. Now that we have gotten the proper documents prepared and scanned over to the bookkeeper, we can talk about what to do with them.

Starting your filing and retention process off the right way in the beginning will ensure that the documents you need are easily accessible. It is the opinion of this bookkeeper that all documents pertaining to ex-tenants be kept for a period of 5 years beginning at the date the tenant-landlord relationship ends. Check the statute of limitations in your area for exact retention requirements as they relate to filing of lawsuits and other legal matters. That covers retention, now let's get to filing.

Filing these documents, invoices, bills, and statements from your financial facilities, in the opinion of this bookkeeper, should always be filed by month with the most current item being on top. It eliminates the need to dig through several file folders to find the proper document when you can go to the file containing the month in question and all documents of transactions occurring in that month. Talk about efficient! Tenant records should be filed according to unit number. More often than not, you, the landlord may not remember when they moved in but you will remember the unit they rented. This will help keep all records for that unit together.  *As a side note, you also keep invoices and receipts of repairs of tenant fault charges with their records as well.*

The best way to ensure you have all the financial documents you need for your accounting processes is to work with an experienced accountant or bookkeeper like those AMH Bookkeeping, LLC. We are the landlord's bookkeeping firm and we are here to help. Schedule a call with AMH and let's talk about your needs and how AMH can assist you.

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Efficiency: Lease Renewals

Welcome to Part Three of the Efficiency series. Today we are going to discuss lease renewals and how to make this process as efficient as possible.

First, how many of you are scattered in terms of when you renew your leases? Meaning are you doing this every month with a new tenant, several in the same month?

If you answered yes to the above question, please, keep reading.

Lease renewals can be a stressful part of your rental business, particularly if it is not a streamlined process. Trying to coordinate the signing with the tenants, driving all over your city, performing the walkthrough to note the wear and tear and needed repairs, and finally sitting down to sign the lease can drain you. Let's get into how you can streamline this process.

  1. Draft and send a letter to all of your tenants letting them know the change in this process. Address the why as clearly as you can. I recommend that you speak to maintaining professionalism and to ease the process for the tenant as well by giving them earlier notice of the renewal.
  2. As mentioned in Part One, you can use Acuity to set up 1 or 2 days that you will do lease signings and have the tenants sign up on those days at times that work for them. If you own both Multifamily and Single family residences, schedule about 2 days for each, depending upon the number of units for each.
  3. Try to keep the entire process to 30 minutes. Having the initial walkthrough form used when they moved in will help keep this to the time allotted.
  4. Lastly, if possible, perform lease renewals in the spring or summer. It is easier for people to find and move into a new place in these months than the colder months should they choose not to renew.  It is also the time most people want to be outside so travelling won't be so hazardous.

As you become more efficient in your rental business, you will begin to train the tenants on the behavior you expect from them as well as what they expect from you.

Need some help getting started, schedule a consultation now. Click HERE to make your appointment!

AMH Bookkeeping, LLC. The Landlord's Bookkeeper.

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Efficiency: ACH for Rent Payments

In part two of the Efficiency series, I am going to discuss rent payments; specifically the most efficient way to receive payments that can "kill two birds with one stone" for your rental business. First let's discuss the most common ways rent is paid.

  1. Cash - This method is a bit antiquated but still acceptable. Lends itself to being spent before being deposited into the rental checking account and understates the income received. Aside from that, proper handling isn't always completed. When receiving cash payments for rent, AMH recommends that a receipt, signed by the property manager or landlord, be given to the tenant, that the payment gets recorded into the accounting system, and a deposit slip is immediately made for that payment listing the address and tenant the payment came from. Multiple cash payments can go on one deposit slip.
  2. Check - Another acceptable and somewhat antiquated method of payment. There are benefits for the tenant in being able to pay rent via check not for the landlord or property manager. For tenants, particularly if they are using a checkbook with the carbon copy feature, have written proof that a check was written for their rent. For the landlord there is the risk of the check bouncing, being a fraudulent check to begin with, and that means you are out of rent. This isn't always the case but it does happen. When receiving a check, AMH recommends the same procedures for handling a check as we do cash. In addition with mobile deposit being available a most banks, you can skip the deposit slip step and deposit that check via the mobile deposit capabilities at your bank, if applicable.
  3. Money Orders - Like checks but are more secure in terms of they do not bounce. To obtain a money order, the purchaser MUST have the money on hand for the amount of the money order they are purchasing. Money orders can be deposited via mobile deposit just like checks. Again, AMH recommends following the aforementioned handling methods aside from the deposit slip. Use the mobile deposit feature to deposit the money order just like you would with a check.

Now for some new ways rent is being paid.

  1. Venmo
  2. Zelle
  3. Cozy
  4. Cashapp
  5. SparkRental
  6. Tenant Cloud

All of the above are methods to pay or send money to someone effortlessly. The aps above make it so tenants don't have to leave their homes to get their rent paid. The apps are made available for smartphones and with a few simple touches to the screen, the rent is paid. AMH is not familiar with the process involved with the apps listed above and cannot give any advice other than to immediately record the payment and issue a signed receipt to the tenant.

Lastly, the method we HIGHLY recommend for receiving rent payments is ACH transfers from the tenant's bank account to the landlord's or property management company's bank account. Often run a few days before the 1st, this method all but guarantees no late fees AND acts as a great pre-screening qualifier for obtaining your ideal tenants.

Although some of the apps mentioned above can deliver funds much more quickly, ACH has more advantages for the overall performance of your business. Efficiency is key here and ACH allows for that much more so than the other payment methods discussed above.

For more information on ACH payments, schedule a consultation HERE.

AMH Bookkeeping, LLC. The Landlord's Bookkeeper.

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Efficiency: Acuity Scheduling

Landlords?

This post is for you.

As an employee of my local Landlord Association, one of the biggest sources of stress I hear about is scheduling showings. Scheduling individual showings of units, just to have the prospect not show up is a stressful waste of time. Unfortunately it is a necessary step in getting the unit rented, no matter WHEN you perform it. I have a solution to automate this and make it smoother and less stressful.

Enter Acuity Scheduling. A Squarespace company, boasts "No More Scheduling Hassles" and I agree. I use Acuity in my business and it makes scheduling appointments easy for me and my clients. I know it will make showing a vacancy a breeze for you landlords. Easy to use, you can set Acuity up to have multiple people choose a showing of your own choosing. For each vacancy you have, you will want a separate appointment type for.

It will send them reminders for you so they are always aware and you can add screening questions that they have to answer before they can confirm the appointment. Acuity can be configured to send multiple reminders on the day of the showing so the prospect can make the showing. No more calling and texting to confirm.

This online scheduling integration can solve 2 birds with one technological stone. If you are self-managing and want to add some ease and automation to your business, I highly recommend Acuity Scheduling. For more information on or to get started with Acuity, click HERE.

For help setting up your Acuity for showings or find out more about how AMH can help smooth our back office administration wrinkles, schedule your consultation HERE.

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Schedule C & E: Using These Forms for the Setup of Your Accounting System

Schedule C

Depending upon your entity type and industry for your business, setting up the books for bookkeeping can be quite simple. For the purpose of this post I am going to discuss the two setups I am most familiar with.

The first is based upon the IRS Form Schedule C. Page one of the form handles the income and expenses of your business to arrive and the profit and loss. The business expense categories listed are all that is needed in your accounting systems' Chart of Accounts. Having this form handy keeps the Chart of Accounts clean and streamlined. You can always add sub-accounts for the things you want broken down for reports to be used internally.

Another form I like to use as a reference is the IRS Form Schedule E. I love this form because my specialty is rental property accounting and it helps keep my clients Chart of Accounts clean as well. Page one of this particular form deals with the income from rent or royalties and the other page deals with other kinds of passive income such as income from Partnerships or S Corps. For this purpose, only the rents concern us. When you have property that you allow others to use, you must report all the income and expenses for EACH property, using multiple sheets for multiple properties, on the Schedule E.

Schedule E

Using a combination of these forms, in particular the listing of expenses on each, and the classes feature in QuickBooks, the Chart of Accounts will be comprehensive and will make creating a tax return a lot easier as all of the information for these two forms will be incorporated into the business books. This method keeps thing simple, organized, and clean; just one aspect of quality you can expect from AMH Bookkeeping, LLC. For more information on our setup process or to work with AMH, schedule your consultation HERE. AMH Bookkeeping, LLC...Your Books. Clean and Simple. 

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What Bookkeepers Want Small Business Owners to Know

Being a bookkeeper is not a glamorous job. There are no fancy products to really showcase the value the service brings to all business industries. Part of my job as a bookkeeper is to educate my clients on the key reasons why professional bookkeeping is so crucial to the overall success of their business.

Below are 6 of these reasons.

1. Accurate and organized financial data is NECESSARY.

As a business owner, it is your job to keep financial accurate and organized financial records. Those records can tell you how well the business is doing, where the money is coming from, and where it is going. Aside from the obvious, it can help you should there be an audit. Being able to clearly explain any transaction at any given time can potentially save you tens of thousands of dollars.

2. Proper categorization of the Income and Expenses.

For tax purposes this is particularly important because getting it wrong can mean an audit, over or understated income and expenses, missed deductions, and overpayment or underpayment of tax liabilities.

3. Timely reporting of sales and payroll tax.

As a business owner, there are several tax reporting agencies that require timely filing and payment. Payroll and Sales tax are two of the most important and can come with hefty fines should you neglect them. Check with your local city, state, and federal government about what taxes you will need to pay for your particular industry.

4. You should maintain separate bank accounts.

In a previous blog post, I shared why, as the business owner, you should keep separate bank accounts. One reason not mentioned in the blog is that emergencies happen, even in business. Having funds set aside for such emergencies can keep the business afloat and not add any stress on the finances.

5. Backing up your books can be a lifesaver.

As a business owner who has had her laptop busted and hard drive destroyed, I can attest to how important backing up your data is. Your financial data is even more vital. Paper deteriorates over time. The ink becomes hard to read and it just does not hold up well. Not to mention it isn't secure enough most times. Invest in an online secure storage service. It will give you some much needed peace of mind.

6. Simply to make sure the data was entered correctly.

Numerical errors happen. Finding them is what is difficult. When you are frustrated with the amount of bookkeeping work to be done, these errors can and will occur frequently. Having a professional handle the bookkeeping can lower the chances of data entry errors. These errors, can cause massive issues with your financials like overstated income, understated expenses, meaning you are paying more taxes and getting less deductions and no one wants that.

AMH can handle those books for you. This is my passion. Let me help you AND your business!

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How to Avoid Communication Pitfalls in Your Property Management Company

While scrolling through Facebook this afternoon, I came across an interesting question in a Property Management group I am in. It asked "What do you feel is the number one service lacking in Property Management?" My answer was communication along with several others responding in similar fashion. I want to elaborate further on my answer. I felt there was a breakdown in communication as it pertains to the responsibilities of the owner and those of the property manager.

  • Who is doing what?
  • What does an owner need to provide to the PM in order for the PM to do his or her job more effectively?
  • What does he PM need to provide to the Owner to give peace of mind to the Owner that the PM is doing the job as promised?
  • Aside from rent, what other deliverables is the PM handing the Owner?
  • Are they timely?

These are just the few of the questions a PM firm can ask Owners and vice versa.

Another side of the communication coin is that of PMs to their maintenance staff. This was another issue brought up in response to the question above. Finding good maintenance staff is a wonderful addition to a PMs process and value added to Owners. It is my opinion that the reason so many PMs are finding it difficult to maintain good Maintenance support is again, a lack of communication as also workload.

  1. Clearly defining what you expect out of your Maintenance staff.
  2. When you expect it.
  3. How they are to report completed tasks to you.
  4. Have the workload available to make them feel productive and valued. If you can't, refer them out to others who need help.

Also, communicate routine maintenance to your tenants. Give them 24 to 48 hours' notice of a scheduled maintenance visit.

  • Who oversees the Maintenance Department?
  • Is there an on call schedule for those late night emergencies?
  • What is the workflow process like?
  • How does the maintenance team communicate with each other and the PMs?
  • Will they have access to Owner?

These are questions that a PM firm should be asking when taking on an in house or long term contract with a Maintenance team. Of course, these are aside from the obvious questions regarding their ability to do the job.

The best way to avoid these communication pitfalls is to ask these questions during the signing phase of your meeting with owners and maintenance technicians.

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QuickBooks for Property Management – Security Deposits

Security deposits are paid by the tenant to the landlord. It is meant to cover any damages done to the property by the tenant beyond normal wear and tear. As landlords, I am sure this is not news to you. What may be news to you is how to handle these payments in QuickBooks. I am going to share the method I recommend because of its ease of use.

When receiving a security deposit from a tenant, I treat it as a credit to the tenant. I do this because it allows me to see, at any given time, how much their deposit is and it makes it easier to discern how much of it needs to be returned to the tenant after any charges have been accessed.

To use this method, Tenant CANNOT be set up as jobs under a property address. They MUST be set up as a customer. Under these conditions, tenant security deposits are handled with the following steps:

  1. Receive the payment - There should be no invoice to apply it to.
  2. Deposit the payment - Tenant Security Deposits SHOULD have their own bank accounts. Some states require this. I think it is just good practice to keep them separate and never commingle the funds.

To return a partial:

  1. Using the Enter Statement Charges feature - Enter all the charges for cleaning, carpet cleaning, painting, etc.  Enter these as positive amounts and it will decrease the amount of the credit sitting on the tenants record. Once all the charges are entered, any remaining amount listed in red as a negative on the tenant's record is due to the tenant.
  2. Write a check from the Security Deposit account for the amount of the remaining credit on the tenant's record, in the expenses and items section below, choose AR and then choose the name of the customer you are refunding and then click save. This zeroes out the tenant's record and you can then make them inactive.

After the tenant has been closed out and made inactive in your QuickBooks, you can then list that unit as vacant and work to get it rent ready. How easy was that?!

For more information on how this works or to receive some training on processing your tenant security deposits this way, schedule your consultation today! AMH Bookkeeping, LLC……The Landlord's Bookkeeper.

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QuickBooks for Property Management: Owner/Tenant Workflow

Now that we have classes, tenants, and owners all set up, it is time to talk how these three things will flow together. The workflow for property management does not have to be daunting. The goal is to make it simple, easy to follow, and repeatable. Let's dive right in!

Step 1: Assessing Rent Charges to Tenants

Statement charges are a great way to assess the charge for rent. It is a register for each tenant that shows all the transactions that involve that tenant. The process for assessing a rent charge this way is very simple.  Open the tenant register and input the charge for rent.

Step 2: Collecting Rent from Tenants

Next, process the payment from that tenant. You can right click on the tenant name and choose receive payment. Here, it is imperative to make sure you have the right account listed that you want the payment to post to. If you do not have a main account where all tenant payments are kept, please pay attention to this. It will save a lot of headache in the long run.

Step 3: Paying Owners

Enter what you owe the owners as a bill minus your property management fees. You can do this by selecting the owner's name from the Vendors list, right click, and choose "enter bills". This step is important as it will leave a trail of what has happened and as a check and balance of whether an owner received their rents or not.

In the memo line you can denote that the amount listed is net of property management fees.

Once the bill is entered, write a check from the property management firm to the owner. Even if you use ACH, use the check writing feature and use ACH as the check number.

For the majority of your business this is the going to be THE most performed workflow. Keeping it simple lessens the risk of mistakes and missed payments. AMH Bookkeepers are well versed in bookkeeping for landlords. Let us take this work off your hands. Schedule your free consultation today.

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