19th May 2009

Technology and the Landlord

posted in Property Management |

A recent note by a reader inspired this post about the role of technology in the landlord business.

technology-perspectiveWhen I started in this business I had every intention of leveraging available technology to make the job easier for me and the operation more efficient. I wanted to set up a web site where tenants could communicate with me about maintenance issues and also be able to pay their rent online.

Being that I have a technology background (software engineer) I made certain assumptions about tenants and banks in general which turned out to be wrong. They are listed below:

  • Tenants use the internet
  • Tenants use banking services
  • Tenants WANT an efficient exchange of money and communication
  • Banks want to electronically process all transactions

I should say that not all of the above are true all the time but such is the case most of the time.

Starting at the top of the list, not all tenants use the internet. Being from a technology background, I couldn’t believe this but then we do sometimes hear the fact that the USA is not number one in internet penetration. Go figure.

Next, about half of my tenants pay their rent using money orders. Usually, this means that they don’t have a bank account for whatever reason.

Next, certain tenants rely on the fact that things take time. Things like postal mail turnaround times and check clearing times. This way they can get an extra day to pay the rent, move out unannounced, answer an eviction notice, etc.

And last, banks usually don’t want to talk about processing transactions electronically unless it’s hundreds of transactions per month which I don’t do.

An interesting note is that if you read your state landlord/tenant statutes (you have read the statute right?) you’ll see that the law is written with the assumption that technology does not exist. This means that the law assumes that there are no mail services, telephones, fax machines or internet connections.

If you read the statues, they’re all about waiting periods and when to physically post notices on-site at the property.

Now, I’m not saying that a landlord who manages hundreds of units can’t benefit from using technology but for smaller landlords, I think that Microsoft Excel or Openoffice Calc is as “automated” as you can expect.

There are currently 5 responses to “Technology and the Landlord”

Why not let us know what you think by adding your own comment! Your opinion is as valid as anyone elses, so come on... let us know what you think.

  1. 1 On May 20th, 2009, Clifford said:

    My biggest hangup with technology is actually the banking aspect. I use Wells Fargo but othe tenants use BofA. They can’t transfer money directly into my checking account. So I have to wait for checks. Fortunately they all use the BillPay feature with their banks. The bank won’t send a check unless the funds are present and when the check is sent, the funds are automatically deducted. So the tenant can’t overdraw on their account, forcing my check to bounce.

    It’s not nearly as automated as I like. But the guarantee of having a check that will cash is more important.

    When I did ask my bank about doing electronic tranfers, I was told it would be $75 per transaction. In the age of “point-click” that didn’t make me feel very good.

  2. 2 On May 20th, 2009, Jens said:

    I’m close to purchasing my first rental property and have been hoping that using technology could somehow become a competitive advantage. Most of my research, though, has driven me to the same conclusions that you highlight in this post. Quite unfortunate. I’m still hoping to be able to purchase property with a target market that will use technology (college students?), but we’ll see what happens. I’ve even considered equipping my property with “free” wifi, wrapping the cost up with the monthly rent. I have not had a good response from the local ISP about that idea, though…

  3. 3 On May 20th, 2009, Tony Sena said:

    My business model is built completely around technology as well. So far I have been pretty lucky and all our tenants have been able to use the tools and resources we have given them to pay their rent and inform us of maintenance issues.

    I am sure sooner or later I will have a tenant that won’t be able to or will just flat out refuse to use technology.

  4. 4 On June 10th, 2009, Melissa said:

    I have been as surprised as you by the lack of technology usage. But since I’ve started using only online listings, most of my tenants are very email friendly. 90% of my tenant communication is by email.

    However, as for paying rent, out of the 9 units I get only one by email transfer (e-check), one gives 6 months of checks in advance, two pay by check exclusively and the rest are cash-only.

  5. 5 On August 4th, 2009, snoe said:

    We used erentpayment.com with ours, but it almost always meant a bit of hand holding and educating of the tenant. The next best option that we thought of was to provide deposit slips to the bank account while letting it be known that it was their responsibility to ensure that the payment was made on time. Neither of these is still ever fail proof, but beats having to explain and explain that no, they couldn’t come drop off a payment at my home and no, my mortgage won’t wait for their check to clear 10 days later.

Leave a Reply