Rent collection is one of the challenges that landlords commonly face. The activity is not only time but can also be stressful. Moreover, landlords also need to develop individual tenant reports, particularly on payment trends, as well as payment reports for entire properties. An excellent web-based application linked to the landlord’s bank account can be used to initiate rent collection, monitor property rent payments, and generate reports for individual tenants as well as for the entire property, although it has some weaknesses.
As mentioned, landlords could use a web-based application for rent collection. The app is aimed at addressing some of the challenges conventionally faced by landlords during rent collection. According to Mallach, traditional rent payment methods are not efficient due to the high processing costs occasioned by the need to travel as well as documentation costs (2). the proposed application will reduce the costs related to rent collection by limiting movement for documentation or payment purposes; eliminating paperwork in the rent collection and reporting process; hastening reporting transactions; and subsequently reducing the time taken for rent collection and reporting. These benefits are expected to translate into long-term positive outcomes for landlords. The application is also unlimited in use and can be customized to the particular needs of landlords and property characteristics.
The proposed application will be able to handle various activities. These include electronic billing, rent collection, tenant account reconciliations, generation of tenant receipts, sending payment reminders, and generating property reports. It will also have a feature allowing tenants to send in their queries if any, and for landlords to effectively answer some of the tenant questions if needed. A data collection form will also be available on the application for complaint entries and responses to them so that the landlord and agent can monitor the status of the property in real-time. The only thing landlords need to do is to provide property details, including the number of units, matching tenant details, and the rent and bills payable per unit per month. The application will be compatible with both Android and iOS devices and will be installed by both the tenants and the landlords for use once customized.
Strategy and Implementation
Once a landlord has confirmed the need for this application, the first step would be to customize the application to the specific characteristics of the property in question. The application will be designed to reflect the actual property name for each landlord and the corresponding name of the landlord and have different tabs, including the unit tab, complaints tab, and reports tab. From the unit tab, a list of all units available in that property will be accessible, and a tenant will be able to access the data for their unit at a particular time. Every tenant will only be able to access data relating to his/her unit and only for the period after their initial registration into the system, and every unit will have data entries for the tenant details and will be updated any time a tenant leaves, and a new one comes rents. The application will match the registration details of users to their respective units. The complaints tab will enable the tenants to report any complaints about the property, whether they are related to their respective units or not. The reports tab will enable the landlord to pull up the entire property report on a month by month basis, as well as the annual report. Both the tenants and the landlord will also be able to pull up individual unit reports. Every landlord can have more than one property registered at a higher subscription cost.
The application will be designed to send reminder text messages with the bills indicated, to all registered tenants five days before the rent payment deadline. Additionally, the application will be connected to the tenants’ visa or master cards, and will be able to automatically deduct the rent from the cards using the gate way service, rather than depending on the tenants’ willingness to pay. Once the rent has been collected, the application will update on the unit tab and then send an e-receipt automatically to the tenant in question. If payments for any unit are unable to be collected and are thus delayed by one day, the system automatically sends the tenant a revised bill and reminder with a 5% penalty on the overdue bill. The penalty will increase with an increasing number of days of delays, and the amount will be deducted from the tenant’s visa/master card as soon as funds are available.
Pros and Cons of the Application
The proposed application comes with various advantages and disadvantages for the landlord. The most notable advantage is that it can integrate and automate most of the previously manual operations in reporting, billing, data reconciliation, and complaints registry management. In this way, the application gives the landlord the opportunity to practice hands-on property management, which entails visiting the property to maybe address the complaints that are raised, rather than engaging in unprofitable paperwork such as filing bills and receipts (Diah 44). Additionally, the application functions like many web-based real estate management software, which provide information for better decision making, enhance the speed and accuracy of service delivery to tenants, and enhance client response, particularly through better and timelier rent payment (Halvitigala and Gordon 3-4). The objective of adopting this application would, therefore, be to lighten the work of landlords not only in the documentation but also in pushing for rent payment, through the preset penalties. The main disadvantage associated with the application is that it will require the landlord to take every new client through the use of the system, which can be time-consuming (Amannah 46). Given that the advantages of the system are more than the associated disadvantages, it is recommended that landlords should adopt the application.
Costs and Expenses
The application is expected to function almost like various real estate management information systems. However, such systems are more elaborate and cover a wider scope of services compared to the proposed application. As such, cost structure will be based on a subscription model whose cost will be either $35 or $45 per month for standard and pro software, respectively. The number of properties and the number of units to be managed will determine the selection between pro and standard applications.
Rent collection is the most challenging aspect of real estate management. The proposed application will assist landlords in rent collection through automatic billing and tenant reminder services, as well as automatic reconciliation rent collection and reporting. The software comes with various advantages, including the ability to reduce the extent of manual labor, increase accuracy and speed in dealing with tenants and to obtain data in real-time for decision-making purposes. The landlords will only need to take the clients through the application to enable them to use the application effectively. Moreover, the application is relatively cheap, as it is subscription-based. It is therefore recommended that landlords should adopt this application as a tool for better service delivery to their tenants.
Amannah, Constance Izuchukwu. “Management Information System for Real Estate and Property Management.” International Journal of Computer Science and Mathematical Theory, vol. 3, no. 1, (2017), pp. 40-70. iiardpub.org/get/IJCSMT/VOL.%203%20NO.%201%202017/MANAGEMENT%20INFORMATION.pdf. Accessed on 8th May 2020.
Diah, Mohd Lizam Mohd. “Digital Technology and the Real Estate Industry.” Sinergi: Jurnal Ilmiah Ilmu Manajemen, vol. 9, no. 2, (2019), pp. 42-50. www.researchgate.net/publication/335810331_Digital_Technology_And_The_Real_Estate_Industry. Accessed on 8th May 2020.
Halvitigala, Dulani and James Gordon. “The Use of Property Management Software in Residential Property Management.” 20th Annual Pacific-RIM Real Estate Society Conference, 2014. www.prres.net/papers/Halvitigala_%20The_Use_of_Property_Management_Software.pdf. Accessed on 8th May 2020.
Mallach, Alan. “Challenges of the Small Rental Property Sector.” Federal Reserve Bank of Boston, Is. 1, (2009). www.researchgate.net/publication/227437097_Challenges_of_the_small_rental_property_sector. Accessed on 8th May 2020.