Property Management – Tarzana

 TARZANA PROPERTY MANAGEMENT

Why a Good System for Collecting Rent Is Important

Importance of Landlord Records

As a business owner or property manager, being organized can help make daily operations run more smoothly. As a landlord, one of your primary obligations is to collect monthly rent from your tenants. It is important to develop a system for collecting this rent. This system should be in place before you even fill your fist vacancy. Having a good system for collecting rent will not only make your life easier, it can protect you if you run into any legal issues in the future.

Why People Don’t Develop a System for Collecting Rent

People have a variety of reasons for not developing a rental collecting system. These reasons include:

• They Don’t Have the Time
• They Think It Is Unnecessary
• They Keep Mental Records

Why a Good Rent Collecting System Is Important (Property Management companies keep records)

What these people fail to realize is how simple it is to develop a system and how much easier it will make their life in the long run. The system does not have to be complex, it just has to answer simple questions, such as how you will collect the rent, and must provide a method for documenting all payments. (If you don,t think you can keep up with it you should consider Property Management).

Taking an hour or two at the beginning to spell out your rules for rent collection can save you hours later searching through receipts, emails and phone calls trying to figure out who paid you, when and how much.

There are several reasons why it is important to develop a good system for collecting rental payments:

• Court Purposes– Having a good system in place for collecting rent can help you if you ever have to go to court to evict a tenant for nonpayment of rent. If you only allow tenants to pay rent using means that can be documented, such as online transactions or money orders, then it will be easier to prove that the tenant has not paid their monthly rent. If you collect rent using means that cannot be documented, such as collecting cash, it may be harder to prove your case.
• Prevent Fraud– How you collect rental payments can help prevent fraud. For example, allowing a tenant to directly deposit money into an account means they will also have access to the account number and routing number, which they are then able to use for illegal means. There are more secure ways to collect rent online, such as through online rent collection systems or through Pay Pal.
• Tax Purposes– Collecting rental payments in a way that can be documented allows you to easily prepare your tax returns. In case you are ever audited, a good system allows you to provide evidence for any questions the IRS may have about your income or expenses.
• Re-Sale Purposes– If you are trying to sell your property, the yearly rent you receive for each rental unit will help add to the value of the property and determine the sales price. You will want to have documentation of the rents you have been receiving to show the potential buyers.
• Loan Purposes– If you are looking to get a loan for your property or to refinance, you must have documentation showing the yearly rent for each rental unit at the property. You will need to have documentation to be able to show the lender that you are actually receiving these amounts on a monthly basis. This number will help the lender determine the value of the property and how much they are willing to loan you.
• Personal Records– Good record keeping is beneficial for your own personal purposes. You can easily figure out how much money is coming in each year and how much has been lost due to nonpayment, partial payment or vacancy. You can keep track of rent for each tenant as well as view the historical rent over the years.
• More Units, More Confusing– Finally, the more units you have, the more difficult they will be to keep track of. Knocking on each tenant’s door and collecting their rent in an envelope filled with cash will be less conceivable as you start to own more units. It will be time consuming and inefficient. Cash payments offer no security and often develop into a war of he said vs. she said. You want to have a system that allows you to document who paid you, the amount that was paid and exactly when the payment occurred.

By Erin Eberlin

Since 1946 the Carnahan name has had a reputation for honest and ethical Real Estate Property Management services in the San Fernando Valley, Santa Clarita Valley, Burbank/Glendale, Los Angeles, Westside and Conejo Valley areas.

The reason for our success is helping owners like you when they need it. Below is a partial list of property management services we provide to help you protect your real estate investment.

• Tenant placement
• Tenant screening (including: credit check, landlord and employment verification, social security trace report, California eviction check and criminal check)
• Regular property inspections
• Accounting and landlord bill payment
• Monthly financial reporting
• Maintenance service and supervision (we use only proven independent vendors)
• Collections
• Evictions
• We supply all the necessary forms to meet California’s Landlord/Tenant laws
• 24 hour emergency phone service
• Advertising to the broadest tenant base possible

Call or e-mail us today for more information. We’re ready to get started!

• Carnahan Property Management services Woodland Hills,West Hills, Calabasas, Canoga Park, Tarzana, Reseda, Topanga, Encino, Northridge, Van Nuys,North Hills,Chatsworth, Sherman Oaks, Studio City, North Hollywood, West Hollywood, San Fernando Valley, Granada Hills, Mission Hills, Simi Valley, West Lake Village, Agoura,Toluca Lake, Valley Village, Burbank. Call us at (818) 884-1500 and check if we can service your area.