4 Ways to Reduce your Rental Property Hassles

Managing a rental property can sound like a hassle, but with some recalibration of your expectations, delegation of tasks, and setting up of a couple systems, you can be on your way to easier and simpler landlording.

Liability–Set up an LLC!

First, with liability, you gotta have an LLC for your rental property.  Some landlords will place each property in a separate LLC, whereas others will limit the number of units or tenants per LLC.  The LLC basically helps with shielding your personal assets from lawsuits should anything go wrong in a property under the LLC.  For things like this, I consult with Attorney Jason Cohen at Pressman & Kruskal.

Taxes–Have Separate Bank Accounts

Open up a separate checking account with an associated credit/debit card and escrow account.  This way any money you spend or collect related to the rental property will be easily trackable when it comes to filing your taxes.  Write all checks out of this account when paying contractors, and use the associated credit/debit card whenever buying things that are for the property.  Also, deposit all rents into this account–for more on this, see the next point.

Rent Collection–Use Automatic Deposit or Mail-in Deposit Slips

Have your tenants deposit the checks themselves.  Give them a stack of “Bank by Mail” deposit slips and pre-stamped deposit envelopes from your bank, and have them deposit the rents by mail.  Make sure they drop you an email whenever they send it out.  Note that you will have to give them your bank account # so they can write it on the back of their checks, along with the ubiquitous “FOR DEPOSIT ONLY” label.  Some people might not be comfortable with this, though keep in mind that every time you write a check out to somebody, they automatically get your bank account # and the bank’s routing information.

Repairs–Give your Tenants Permission to Call the Plumber

For minor repairs, arrange with your tenants to have them call the relevant plumber or handyman whenever something goes wrong.  You might have them email you or call you first to approve it if you’re worried about too many unnecessary plumber visits.  Technically, in Massachusetts, you can’t make your tenants call the plumber and wait for her to let her in, but you can set up an arrangement with them.  Most tenants tend to appreciate being to call in the plumber or handyman on their own, since they get instant service, and things actually get fixed.  Landlording is a pretty sleazy industry in the city, so tenants are generally impressed that you’re actually willing to have things fixed and that you’re willing to pay for it.  For plumbing issues, which tend to be the main reason tenants need things fixed, I use Barbara Taggart of Cambridgeport Plumbing.   Make sure to find a small plumber’s outfit that specializes in small jobs–the big companies will charge you an arm and a leg.  Same thing with a handyman–check out Angieslist to find a handyman or a small contractor–the big ones will overcharge, or not even want the small jobs.  As always, make sure any contractor is licensed and insured.