Managing legal documents is at the heart of running a successful rental business. However, it is a challenge to keep track of all your documents.
Even if you only have a few units, there can be a mountain of paperwork to manage. Everything from leases to tenant repair requests and simple rental receipts all require secure storage.
Traditionally, putting away paperwork was a mammoth task. A landlord would need a few storage cabinets; equipment such as a printer, fax and copier; and a robust filing system. All this took time, resources, staff and a lot of space to organize and manage.
However, with the advancement of technology, there are plenty of digital solutions that today’s landlords can use. Using mobile rental apps or online software gives landlords the tools needed to streamline a rental business. Many of the best property management apps have features to manage a wide variety of legal documents.
Of course, switching to online document storage can be a daunting task. Suppose you have always dealt with paper documents. In that case, you may have concerns about digital storage, online security, e-signatures and legal issues. In many ways, however, managing legal documents online is easier and more secure than storing hard copies.
Being a landlord can be fun – if you do it right
No matter how good you are at finding good leases, you can lose everything if you don’t manage your properties properly. Being a landlord doesn’t have to mean midnight calls, expensive evictions, or daily frustrations with ungrateful tenants.
Essential features of document management software
Before moving to online document management, it is crucial to have a property management app that fits your business. Most rental apps facilitate online rental collection, deposits, and even maintenance requests. However, if you want to manage legal documents, you need something more.
What should you pay attention to in a rental app if you want to manage legal documents?
- Safety. The app or online software must be encrypted to prevent unauthorized access to your files. Think of this as a safe that only you or authorized persons have the combination for.
- Power. You need to choose an app that can manage the types of documents you need. For example, you probably want tenants to fill out leases and digitally sign documents. But what about other legal documents such as tenant repair requests, rent payment plans, or maintenance reports?
The benefits of property management apps
As a landlord, why should you switch to digital documents? As an example, let’s look at the most popular type of electronic document that landlords use: the lease.
There are a few ways why digital leases are better than paper ones.
- Accuracy. There are no problems with illegible handwriting, spelling mistakes or missing fields. Also, essential information can automatically appear on other documents.
- Safety. Digital signatures are more secure than handwritten because they are more difficult to forge.
- Cost. It’s easy to add or remove clauses from leases depending on your needs, rather than printing from scratch. You’ll also save money on paper and ink, not to mention the transportation costs to accommodate the renter.
- Speed. Sending electronic documents by email is faster and more secure than by post. You don’t have to consult with tenants and they can review the agreement on their own time.
- Storage. Lease agreements are stored in a secure online environment. This way you always have access to your files, both at the office and while working from home.
The benefits of electronic leases are also the same for any legal document in digital format. All data is validated to ensure it is correct. Completed forms can be emailed, printed and retrieved from secure cloud storage.
Legal electronic signatures
Electronic signatures, or e-signing, are the key to using legal documents online. E-signed documents are legal documents and are just as valid as a handwritten signature. In the US, the Electronic Signature in Global and National Commerce Act of 2000 (E-SIGN) ensures that electronically signed documents are legal.
Secure Storage Solutions
An excellent reason to store legal documents digitally is that they are always at hand. Let’s say you’re out of the office or it’s the weekend. However, you should check a rental agreement for one of your units. If you have paper documents, you will either have to go to the office or wait until Monday.
If you have legal documents online, they are always available. In addition, you can grant access to all employees who have to check the administration.
Long Term Document History
File management is another way technology can help manage legal documents. For example, it is possible to access all documents related to a specific unit, tenant or property. This function gives you more insight into your business operations.
Here’s an example. Suppose you receive a repair request from a tenant because the stove is broken. However, you seem to remember a similar request from the same unit. In that case, you can simply check your maintenance records for that device. You may realize that the heater was replaced last year. This can help determine if the fault is due to old equipment or misuse by a renter.
One of the many benefits of using digital legal documents is customization. Many property management apps that manage documents allow you to include custom fields. This function is ideal if you have rental properties with specific requirements.
Easier boarding for new residents
Processing rental documents online also saves time when new residents move into a home. There can be several forms and agreements per tenant. Instead of completing each document individually, you can distribute information across all the forms. This can be names, previous addresses, rent amount and social security numbers.
For example, this can save time if you need to fill out a rental agreement, pet agreement, co-signer agreement, security deposit, flexible rent payment plan, or other documents.
Moving to digital legal documents is a great way for landlords to run a successful rental business more efficiently. Various technical solutions ensure secure cloud storage and 24/7 access for legal documents. Your tenants will also benefit when you start using digital leases because they can access their rental documents at any time.
More about Pyjama People hosts
Do you want to become a landlord? One of the best ways to build wealth is to build a portfolio of rental properties and manage it professionally over the long term. We at Pyjama People are committed to helping new hosts and those with experience be successful with their rentals. Whether you’re looking to systemize your rental business, need help with tenant screening or property management, or have any other interest in and around rental property management, the articles below are designed to help you get better at what you do. Oh, and for a succinct, well-organized reading through the key components of real estate investing and managing rental properties, you might want to check out these books written by Brandon Turner, the in-house Pyjama People – The book about investing in rental properties and The book on managing rental properties.
Rental and rental properties