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.

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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