By: John Smith, owner of John Smith Property Management
Recently I received a question from one of our readers. “Johnny, how do you keep track of your books?” Well, Mom, (to Mom, I am known as Johnny) let me both answer your question and also thank you for giving me the idea on what to write about this month.
Until this year, I used to spend hours and hours every month writing out all of my checks by hand. Then, after writing them, I would have to spend hours more entering all of that information on my old accounting program.
Initially, I didn’t even realize that there was such a benefit to working with computers. Heck, we hadn’t even heard of the Internet when I was in college. I wrote my term papers on typewriters. In fact, when I started using computers, they seemed like expensive word processors. Wow, was I in for a treat!
Right after I bought my first building, I took an accounting class at Parkland College to learn how to do my own books. Initially, I was going to use the old method that I had learned about in that class: double entry accounting on a ledger. You know what a ledger is. It’s the image we all have from the old movies of the guy slumped over a thick book with tiny glasses and a pencil. By 1997, I still hadn’t learned the value of computers.
When my friend who was finishing a degree in accounting at the University of Illinois found out about this, he laughed loudly. “They still use those ledgers in some third world countries,” is what he told me. And, then he taught me how to do the same thing on a computer. Unbelievable! I didn’t have to play with a trial balance or accounts being out of balance. The computer was able to take human error out of the equation. You couldn’t debit one account unless you credited another. Fantastic.
While that program was amazing at the time, it was nothing compared to the program that I just started using after New Year’s called QuickBooks Pro. With my new program, I can write out the check right there on the screen. The computer “remembers” all of my transactions, so, after a while, it finishes all of my sentences like an old friend who is thinking exactly the same thing I am. It’s wonderful! Now, I type up all of my checks, the computer then spits them all out of the printer, and simply printing the check finishes the accounting.
Want to go one better? My accountant uses this same program, so I can now email my files to him every time that I back them up so I have a set stored off sight.
As I’m getting everything ready for tax time, I find myself wishing more and more that I had started this last year. There’s just no more bookwork. I collect my rents, write out my bills, and it’s done. Now, with room for a few more paragraphs in this article let me tell you about another computer application that I’ve found that can help you more effectively rent out your apartments. It’s called Microsoft Outlook.
With Outlook, every time a prospective tenant calls me, I go to my PC and create a contact card on them. I get a name, phone number, email address, and then I jot down notes about our conversation. Now this contact is added to my Warm List. I follow up with these people on my Warm List with an email once or twice a week until they decide to rent one of my units or choose another place. One of the wonderful things about email is that it’s unobtrusive. Nobody minds getting an unsolicited email from someone telling him or her about an apartment that they initially called about. You can capitalize on this by staying in touch in a way that is comforting to your prospect without being annoying in the way a telephone call can be.
Here’s an example. If I have six different people that I know are interested in one of my apartments, then every time I show that unit, I send them an email inviting them to join the tour. Want to know what happened at a recent showing of mine? How much do we all hate “no call, no shows”? We schedule time to go to a unit. We coordinate it with the tenants. We go and wait, only to wait alone. No one comes by, and we wonder how long before we should call it a “no show” and go back to work. Well last time I showed an apartment, the person for whom I had scheduled the showing didn’t show up. While this was less than ideal, two more people who had gotten my email DID show up and go through the tour. In fact, it looks like one of those is going to sign the lease. Working smarter, not harder should always be the goal of us landlords whether we are professionals or “part-timers” with day jobs.
Of course, this method can be used with any paper notebook as well, but the power of Outlook is that it is all there in front of you at once, and just by deleting one word, the contact can be moved off of my Warm List and onto my Active Tenant list.
Both QuickBooks Pro and Outlook were very easy for me to learn, plus there’s a plethora of books out there to teach you about them if you want to be self-taught.
If you’re afraid of using computers or using one less than you could be, I hope that this article has been useful for opening up the door a little wider.
Good luck and happy renting!
John Smith has a Master's Degree in Education, is a real estate investment and management consultant and trainer throughout the state of Illinois, and has been a real estate investor and manager for over seven years in Champaign-Urbana. To contact John Smith, email him at email@example.com or call (518) 851-7820.