If you google ‘rental protections’ you’ll come across many articles and laws relevant to protecting the rights of tenants, but what about landlord protections? Especially during the recent pandemic?
Landlords are in a precarious position in 2021, particularly with all of the recent legislation that is aimed at safeguarding tenants and renter’s rights, and also protecting tenants from eviction. In the world of property rentals, it’s more important now than ever to make sure that you, as a landlord or property owner are safe from securing a tenant with a precarious rental history or worse – exposing your assets and identity to a renter that might have criminal intentions.
Setup a Separate Business Entity for Managing Your Rental Properties
It may seem relatively simple and straightforward to own and manage rental properties as an individual using your own name but doing so puts you and your personal assets in a vulnerable position in regards to lawsuit risk, and could also potentially over-expose your sensitive financial data to ‘would-be’ tenants who are phishing for identity information.
The process of setting up an LLC as a property management entity takes very little time and is relatively pain-free. Assuming that you plan to be a landlord for many years to come, the benefits of separating your rental assets from your personal name and financial data – especially when screening and managing tenants will give you peace of mind for years to come.
Use a Third-Party Application Screening Service
The most obvious benefit of using a reputable third-party screening service is that they are pros at evaluating prospective tenants and by limiting your direct interaction with a multitude of prospective renters – some who may or may not be actually interested in the property, protects you from unnecessary contact and possible phishing for personal information about you and your assets.
ApplyConnect is a popular online screening company that can provide you with a thorough report about an applicant in a matter of minutes and at no cost to the landlord. AppyConnect’s fee is a very affordable $29 which is charged directly to the prospective tenant. Some of the advantages of using a third-party screening company like ApplyConnect is that they can provide you with valuable financial information like the applicant’s Experian credit report, and also their VantageScore credit score.
ApplyConnect goes even further by including a Nationwide Criminal Background check, and a Nationwide Eviction History report with every application that they run. The more you know about anyone who might be living on your property, the better off you are at evaluating how responsible they will likely be in caring for and maintaining your rental, and how much you can trust them.
If you were to try to gather all of this information about an applicant on your own, it could take a few days – the best prospects may have leased with another property by that time.
Consider Working with a Real Estate Agent
Working with a real estate agent is a great option for a landlord or property owner who wishes to avoid dealing with tenants directly during the leasing process for your rental. An agent can be the sole contact between you and prospective renters, and they can handle all of the showings which means you never have face-to-face contact with anyone.
After the tenant has been properly screened and you’ve chosen them for your rental property, the agent will draw up the lease agreement then meet with the tenant to go over all of the lease terms, obtain signatures and your security deposit. If you’ve already established an LLC for your rental business, then there’s no need for the tenant to ever have direct contact with you or have access to your personal information – including details about your property assets.
Of course, there is a financial consideration in working with an agent because they charge a fee for handling the filling of your property vacancies. The fee can be equal to one month’s rent, or a percentage of the rent each month for the first year, however the peace of mind that comes with knowing you have a property professional safeguarding your rentals may make it well worth the cost.
Setup a Post Office Box for Rental Property Related Mail
Renting a Post Office Box for managing your rental business is a sure way to safeguard your personal address and your home from strangers who might be looking to gather identity information from unsuspecting business owners. A Post Office box offers added security for your rental related mail because it’s locked, and also it sits inside a Post Office where building access is monitored.
There are a few drawbacks to a Post Office box, mainly that you will have to travel to pick up your mail and you also have to pay an annual box rental fee, but the fee can be written off on your business taxes.
Contract with a Reputable Online Rental Payment App
An online rent payment app like PayRent separates your financial data from the tenant’s so that both parties benefit from the safety of knowing that confidential account information is protected. When you sign up with PayRent, tax ID numbers and bank account information are SSL encrypted as each transaction is processed which eliminates data exposure and the potential risk for fraud. As a landlord, you also enjoy the benefit of controlling and monitoring other types of payments that come with managing a rental property – things like security deposits, late fees and even parking fees.
Most of all from the perspective of safeguarding your identity, PayRent keeps you and your rental business accounts at arms-length from other parties, including tenants.
Running a rental business comes with many responsibilities and as your success as a landlord grows so does your exposure to various financial risks, including identity theft and possibly fraud.
There are a few important steps you can take to ensure that you have Landlord protections. Strategies that will keep your personal information separate from your business identity include third-party tenant screening, enlisting the help of a real estate agent, and setting up an LLC.
The simplest and quickest safeguard you can implement is signing up with a service like PayRent which is designed specifically for managing rental property financial transactions. The PayRent app offers many landlord protections and will safeguard rent payments and sensitive financial information for both you and your renters.