How to Turn Your Rentals Into Passive Income (Not a Second Job)

As many landlords know, treating rental property management like a full-time job can lead to burnout — especially if you have a 9-5. Luckily, you can set up systems to help alleviate the pressure.

Chad “Coach” Carson and Harrison Stevens, Vice President of Marketing at TurboTenant, sat down to discuss four key systems in Coach Carson’s “mind map” that he uses to save time completing tasks like leasing and rent collection. Of course, we know real estate will never be completely passive, but the right tools can cut your management chores to just an hour per week.

We’ll break those systems down in writing, just in case you don’t have time to watch the entire video. So stick around, and see how TurboTenant can help you make your rentals more passive.

Leasing

To find tenants, landlords with empty rentals first need to market their properties, receive leads, and track the ones that flow in. These steps represent some of the leasing sections of Coach Carson’s mind map, and many websites can help. Apartments.com, Craigslist, and Redfin are all great choices, and they’re the three top drivers of leads for TurboTenant landlords. However, one challenge is that each site requires a different login.

To avoid the hassle of creating new accounts and listings across each platform, TurboTenant syndicates a single listing across dozens of listing sites — with one click. We’ll even help draft the property description with AI.

Then, we’ll collect all of your leads from the different sites and put them in one digital inbox.

Tenant Screening

Now, it’s time to turn your attention to screening. TurboTenant enables landlords to review each lead and send pre-screeners, rental applications, and background check requests in seconds. When you use TurboTenant, you’ll get highly accurate screening reports due to its partnership with Rent Butter.

Aside from accurate reports, you’ll need written screening criteria that’s fair to all applicants. To that end, TurboTenant helps ensure landlords ask only legal questions and don’t violate fair housing laws.

After finding a well-qualified tenant, it’s time for the next part of the leasing process: signing documents. TurboTenant’s internal legal team reviews state and city laws to produce up-to-date, legally binding lease agreements, which landlords can personalize. After the lease is built, both parties can sign it for added convenience.

All documents will then automatically be stored in the platform, allowing for easy tenant access and better organization.

If you choose to use a lease created outside of TurboTenant, you can easily upload and e-sign it, as well as any other documents. This functionality can also come in handy in the event of legal queries.

Overall, it’s well worth investing just a few minutes to set up an automatic process that will save you a certain amount of time every week in the long run.

Collecting Rent

Collecting money from tenants starts with the first deposit check. If you receive rent payments via TurboTenant, you and your tenants should set up the procedure as soon as possible to prevent move-in delays. Tenants can pay using ACH deposit, credit card, or debit card, and the payment is digitally transferred to the landlord within 1-2 business days, depending on factors like bank hours.

In the meantime, landlords can see the transaction happening online and know the payment is on the way. TurboTenant also provides automatic receipts, which create a paper trail of past rent payments.

Additionally, landlords can set up automatic rent payment reminders on TurboTenant. The platform automatically charges late rent fees and offers automatic payment options to help landlords complete the most critical part of landlording: collecting rent.

In the worst-case scenario of rent remaining unpaid for multiple days without explanation, TurboTenant partners with EZ Evict USA to help streamline evictions. To help mitigate delayed eviction proceedings, TurboTenant landlords can turn off rent payments, so the tenant has to contact the landlord directly to discuss the situation rather than attempting to avoid the eviction cycle.

However, these situations can ideally be averted altogether by first attempting direct communication to work through the issue. TurboTenant provides the ability to communicate with tenants and document all messages, allowing for backup in the event of any legal issues. Though TurboTenant does not record phone conversations, landlords can send messages to tenants recapping the discussion for future reference if need be.

Maintenance

Property maintenance can be a major time sink for landlords. TurboTenant helps to save time by empowering tenants. Tenants can contact landlords about maintenance issues via the communication portal or file requests directly on TurboTenant, eliminating the need to juggle texts, emails, and phone calls.

All maintenance requests will then be organized by property, and the tool can forward requests to a maintenance worker (whom you can also provide a login with limited access). This system helps eliminate the need for lengthy back-and-forths with tenants and maintenance workers, keeping landlords up to date on the status of any rental property maintenance requests.

Partners

Currently, TurboTenant partners with Thumbtack to provide maintenance services in some areas, from initial request to repair completion. Ideally, a third party or AI service can provide basic suggestions to the tenant and collect more information before notifying the landlord or maintenance worker. This system can help reduce the frequency of stressful, emergency calls for landlords.

In the video, Stevens and Carsona discuss the need for well-qualified, reliable maintenance workers who are prepared to handle issues for landlords when they’re away. Software can only go so far, and you’ll need to build a trustworthy team that you can depend on to assist with rental property maintenance at any given time. Ultimately, Carson says, you may still have to deal with a few occasional maintenance calls, but you’ll save time by hiring the right people.

Additionally, Carson notes that preventative maintenance is crucial, and it can be hugely helpful to have a checklist of items that you can occasionally ask a plumber or electrician to check on. Self-managing landlords should also inspect properties regularly to help mitigate minor problems from spiraling.

Of course, more passive landlords may prefer to pay a professional to handle maintenance, while more active landlords with a lower budget could take care of some maintenance issues themselves. With that said, Carson adds that the ultimate goal of becoming a landlord is to have enough room in the budget for flexibility rather than constantly being on call for tenants. Stevens suggests setting a certain percentage of rent aside for any professional maintenance needs.

Bookkeeping Admin

Bookkeeping and administration are a necessary, though often unappealing, part of being a landlord (Carson likens it to cleaning up after a Thanksgiving dinner). Bookkeeping is a continual process rather than a once-a-year chore, so landlords shouldn’t put it all off until tax season. Software can help document various transactions, including rent payments, HOA fees, utilities, and mortgages, and rental property accounting software can help automate those tasks.

TurboTenant automatically tags many of these transactions so landlords know what money is moving in and out. If a transaction is not tagged, landlords can add manual tags. During tax season, landlords can generate a Schedule E through TurboTenant to provide to an accountant or CPA. This part of the process is straightforward to automate, and TurboTenant helps educate landlords about the system along the way.

Stevens recommends automated bookkeeping over manual alternatives, as it can make a big difference in keeping you up to date on your rental properties’ finances. Software of any kind can be a significant help in this regard, particularly in the event of an audit. Landlords could even save money on hourly payments to a tax professional.

The Final Word

Having good property management software, automating specific processes, and employing trustworthy people can turn rental property management from a full-time job into a passive business (although not entirely passive, of course). You don’t have to feel the pressure to set them up all at once. Instead, approach each system as you go, and you’ll start to see results as time passes.

Many of the tools Stevens and Carson discussed here are free for landlords to use, though TurboTenant also has paid subscriptions that may be more helpful to landlords with larger portfolios. As a whole, TurboTenant aims to simplify the rental management process to help independent landlords avoid hassles and move toward their goals. And, as Carson notes, it’s a great time to be a landlord, since the software has never been better.