Your property rental portfolio should receive the same ongoing care and maintenance that you would give to your home, to ensure everything is in order and you’re getting optimal use out of it as well as peace of mind.
A disorganised portfolio clogged with junk data (or hiding loose ends or enabling wrongdoing through lax processes) can disrupt the flow of operations, reduce productivity, expose the business to risk and ultimately cause sleepless nights.
1. Check for deposit consistency
Quite simply, you should have the same number of damage deposits as there are active tenants on your portfolio of rental properties, and their individual value should be roughly equal to the monthly rental value. Any cases of active tenants who don’t have deposits should be looked into, unless there’s a valid reason for this. This will clear up any confusion around absent or oddly valued deposits and can be the starting point for any deeper investigations that may reveal other irregularities.
But it’s inactive tenants who still have damage deposits against their names that you really want to keep a close eye on. Check for this regularly to ensure deposits are paid out as soon as possible after a tenant has moved out. Once that’s resolved, for added peace of mind, properties on PayProp can be “disabled” upon vacancy, at which point recurring invoicing will stop automatically.
By clearing out expired contracts and ensuring that money is always returned to its rightful owner, you can keep your books tidy and your business honourable.
2. Verify credit notes
Credit notes, credit memos, journals, entries – no matter what you call them, they should only be used to correct mistakes, or when funds from another source (like a damage deposit) were used to reduce an outstanding amount. (And to be clear, this should be highly exceptional and not the rule.) Otherwise, excessive or unexplained credit notes pose a risk to the principal.
Take a look at how many credit notes were created in relation to the number of invoices generated for the same period, and make sure that each one includes a clear description of why it was created, to avoid any misunderstandings. Any discrepancies are worth investigating.
PayProp’s customisable permission settings allow you to restrict only authorised users to create credit notes.
3. Monitor credit balances
It’s important to not only check tenant statements to see if specific accounts are in credit, but also whether they are in arrears. A portfolio becomes messy when arrears are not handled promptly, and the messier it gets, the harder it is for the principal to analyse or recoup outstanding amounts, which increases risk.
PayProp’s advanced arrears tech automatically flags when a payment is missed and allows you to chase any outstanding amounts over e-mail and SMS. Our system gets results – 64% of tenants respond within 48 hours.
Additionally, whether the tenant over- or underpaid due to inaccurate, additional or missing charges on their invoice, you can prevent having to explain a miscalculation later on by regularly checking that tenant statements are correct.
4. Manage notifications
Enable, if you can, notifications to beneficiaries (e.g. owners) and payers (e.g. tenants) whenever a transaction is made on your rental portfolio. It could be the single most important move you can take to reduce errors, omissions, and miscommunication.
PayProp’s automated and bank-accurate client communication keeps everyone up to date on the status of their monies.
5. Action outstanding invoices
A daily general sweep of your outstanding invoices can save you time and money in the long run. Try to ensure that even small pending deposits are not left unallocated as they can add up and become costly. Failed beneficiary payments can alert you to issues that are easy to overlook but important to address, such as closed accounts or incorrect banking details.
PayProp’s landing page is your dashboard, giving you a live comprehensive portfolio summary that includes the amount of outstanding invoices every time you log in.
BONUS: Peripheral services available only to PayProp clients
Agents who use PayProp have several additional tools at their disposal that help streamline their day-to-day operations on the platform and make their lives easier. We offer landlord and tenant visibility and self-service through the Owner app and Tenant portal, tenant screening with the Tenant Assessment Report, instant online payments with Ozow integration and other industry-leading functionality included free or at a minimal cost.
Take advantage of these tools and processes – either as a PayProp client or in your existing setup – to maintain the integrity and health of your rental portfolio, and raise your value proposition to your clients.