Real estate

How can HomeKasa help you save money, reduce frustration and automate the boring stuff (2022)

HomeKasa saves time, and reduces frustration in managing multiple properties

Author HomeKasa
Reading Time 12 minutes
Category Landlords
Updated on

Investing in real estate is a sure way of growing generational wealth. That is why many people either buy and rent out homes themselves or buy houses and employ property managers to manage for them. Homeowners and property managers know the pain of managing homes.

You might think that managing a portfolio of homes (known in the industry as doors under management) is like managing a portfolio of stocks. But there are significant differences between the two.

The expert advice for stocks is to hold stocks for the long term and only rebalance stocks periodically. The lifecycle of managing a house is more complicated and involves many moving pieces. One simple example will illustrate this. If you buy and hold stocks, you don't have to pay any taxes on them each year (note - we are not tax lawyers, and tax regulations change frequently). But if you own a house, you must pay property taxes every year. Owning a home or a portfolio of houses requires more active management.

Even if you are paying a professional property manager, you still must be actively involved as the owner. A property manager can alleviate some of the pains, but you are still responsible for tracking mortgage payments, paying taxes on time, etc.

HomeKasa helps to help solve the issues faced by owners and property managers when managing a portfolio of homes. Let's discuss how HomeKasa saves your time and money, reduces frustration, and automates as much of the process as possible.

Your real estate investment is a business, and every business needs a profit and loss statement (P&L) and Cash Flow statement. HomeKasa allows you to create a P&L and Cash Flow statement anytime. You can also see how things will turn out in the next 12 months by checking the pro forma profit and loss statement based on projected cash flows.

You can quickly see

  • Rental income vs. expenses used to generate that income.
  • Capitalized expenses (home improvements) vs. operating expenses (cost to repair a broken faucet)
  • Security deposits and deposit refunds
  • Planned expenses (utility bills, Homeowners Association fees, mortgage payments, insurance payments, property taxes, and yearly taxes)

This report can help you make some significant decisions.

With comprehensive data at your fingertips, you can decide things like

  • Should you refinance the mortgage based on how much interest you have paid, the time left on the mortgage, and the historical occupancy rate based on this specific property.
  • Should you raise the rent, and by how much? If you do, what is the likelihood of the tenant leaving? And finally, if the tenant does leave, how quickly can you find a new tenant?
  • How much can you expect to spend on turnover maintenance? This information can help you determine the type of fittings, paint, carpet, upholstery, and landscaping.
  • Should you upgrade the property based on average historical rent for your property, expected rental rates for the upgrade, and taxes?
  • When should you plan the more extensive maintenance projects like changing the roof or installing solar - based on which tenants are on a yearly lease, and when does their lease expire?
  • Maybe it is time to make that water heater repair because you have a projected increase in cash flow next month. Or perhaps defer it for another two months since you have to repair the windows in another home.

The experience of preparing your yearly tax returns is often compared to getting a root canal. Even if you use a professional tax preparer, you will still have to collect information about expenses, rent, repairs, mortgage interest, etc. HomeKasa will automatically do the work for you and save you hours. You can either download a Schedule E or download the data required to generate a Schedule E in a CSV file.

Anytime you pay $600 or more to a contractor (plumber, electrician, etc.), the IRS asks that you issue a form 1099. HomeKasa. HomeKasa will automatically generate and send a form 1099 to all the contractors you work pay more than $600.

If you own real estate and derive income from it, you have to fill out a Schedule E to report your earnings and losses each year to the IRS. This form requires you to calculate and enter your income, expenses (including repairs, mortgage interest, HOA fees), depreciation and improvements, and property taxes. Making a minor mistake here can cost you thousands of dollars in extra taxes, not to mention the fear of a tax audit. HomeKasa will save you many hours and nerve-wracking frustration but automatically create a Schedule E for you based on all the information we have about your real estate business.

Real estate tends to generate a lot of information and activity. If you are dealing with this manually, you are wasting your valuable time at best or losing actionable insights at worst. HomeKasa can help you automate most of the activity and surfaces actionable insights so you can do something about it.

  • Did all the renters submit their rent on time (and if not, HomeKasa will automatically send them a legally required notice to pay on time, so you don't have to and you don't waste time for legal notice periods)

HomeKasa includes a simple to use the self-service portal for tenants.

With HomeKasa, current and past tenants can access all their documents, payment history, and property inspection reports without calling, emailing, or texting you. All information is accessible by the tenants by simply logging in to their portal. Of course, you, as the property owner, get to decide whether the tenant has access or not and how long they have access. You can set the access to expire a set number of days after the tenant moves out (for example, tenants will have 30 days after they move out, and then their access is automatically revoked)

Often the Homeowner or the property manager will spend a lot of time going back and forth trying to find a time that works for the tenant and the contractor. The scheduling becomes even more complicated as people return to work after COVID. With HomeKasa, you can share the contact information of trusted and approved contractors with the tenants, and the tenants can do the scheduling themselves. Of course, the contractors will still ask you for approval before doing work, so you have complete control of the budget.

HomeKasa automatically reminds you and the tenant to pay rent and sends you reminders when rent is not paid on time. It can automatically send the 3-day pay or quit

HomeKasa's automated email reminders to renters for upcoming rent payments includes carefully designed language encouraging tenants to pay the rent on time. The reminders include carefully chosen language, typography, and color palette based on advanced research in the field of behavioral economics.

HomeKasa can also be set up to send custom notices. Do you want to remind the tenant to take out the trash every Wednesday or change the batteries in the smoke alarm twice a year? You can do that.

Automating these tasks helps you relieve the minute and also provides better results. Most tenants want to do the right thing, and they will do things when they are reminded.

Another benefit of sending reminders that require the tenant to engage with the reminder in some way (yes, I changed the smoke alarm) or (yes, I paid the rent, etc.) is a legal trail that protects you in case of a dispute.

HomeKasa uses a unique technology that derives insights from behavioral psychology to make sure the tenants engage with the reminders. For example, we ask that the tenant confirm that the rent is paid, that the rent will be a few days late, or that they changed the batteries in the smoke alarm. This micro engagement is proven to increase the result you are hoping to drive. In other words, the tenant is more likely to do what you are asking them to do.

Having a housemate or roommate is very common. Another common scenario is house hacking, where multiple people will pay rent that must be reconciled with the mortgage.

HomeKasa's tenant portal will automatically send rent notices to each roommate or housemate with the right rent amounts. If any housemate is behind their rent, they will automatically get a reminder, and you will know which portion of the rent that is due to you is behind.

HomeKasa will automatically send a pay or quit notice when the rent is not paid on time. The correct form and suitable period are based on your property's state. For example, in California, the Pay or Quit notice requires a three-day notice, while in Alabama requires 7 days for non-payment of rent. Automatically sending these notices without intervention means that you don't waste any time, and the timer starts automatically. If the tenant does pay within their notice period, all is good, and you don't have to do anything. If they don't pay, you won't have to start a new period.

Any homeowner will know that owning a home means managing your expenses. Everything inside the house has a finite life and will have to be replaced. In addition, things will often break, and things will break more often when a home is rented out. The air conditioner will stop right before summer, the faucet will start leaking in the middle of the night, and the attic will have rodents and other small animals. Each of these issues will need to be fixed. This means that you have to find a contractor and manage the expenses. Of course, you can manage the costs in an excel or Google Sheets document, but you'll have a tough time managing your taxes if you do that. It is also harder to see your current expenses if the information is locked away in an Excel file.

HomeKasa gives you a place to store both one-time and recurring expenses. You can take photographs of the receipts' or upload a scanned copy of them, so you never lose receipts. Conveniently, the receipts are also tagged for each house and the expense.

But there is a more important factor at play here. Expenses come in two flavors - unexpected (those pesky faucet leaks) and planned. Planned expenses happen as you need to continue maintaining the appliances (change the water heater every 10-years or due to code changes where you'll eventually have to comply with local ordinances. Knowing your cash flow will help you plan for your planned expenses. This is useful so that your cash flow does not get impacted in a way that you can cushion the blow. You will have more information to manage when you want to schedule repairs. Having a global view of current and upcoming expenses is very valuable.

Having all the expenses and receipts in one place is also very useful. The IRS requires you to keep your receipts for up to 7 years.

Homeownership generates a lot of documents that need to be stored. Everything from mortgage paperwork, insurance details, property taxes, and ownership details must be stored. HomeKasa allows you to store all the documents in a simple to find place so that each document is associated with a house and a date-time. You will never find yourself trying to remember where you stored the insurance details anymore. Information is always at your fingertips.

Over some time, you will be working with many contractors (like plumbers, electricians, HVAC repair, etc.). If you have many doors under management, you'll want to share this rapport and trust that you have built for all your properties instead of trying to find new contractors. With HomeKasa, you will be able to store the contact information of each contractor along with the work that they have done for you, etc.

You can easily save details like when was the apartment pained and in which colors, when was the fridge repaired in apartment #7 and if the tenants are abusing the washing machine (since it breaks down too frequently)

When tenants move in, and when they move out, you need to do property inspections. It is often advisable to do periodic property inspections. Owners and property managers often use printed checklists to note the property. Did the carpet already have a stain when the tenant moved in? Sure, you can document that, but a picture is much better. HomeKasa allows you to do a property walkthrough with your camera phone and store photos and videos. If the window makes a creaking noise when the tenant moves in, that is best captured by a short video. That way, you can note that there is a chip in the window in the kitchen. There will be a photo to document where it is and how big it is. So if the chip becomes bigger later, you will know.

Another cool feature is that you can automatically compare the property inspections with a before and after and notice where there are changes.

You can also give tenants access to the property walkthrough report through the self-service portal. It makes sure that there is no dispute about these things in the future.

At the end of the tenancy, HomeKasa can automatically calculate the damage and generate a repair estimate that you can use to decide how much of the security deposit to return.

Real estate owner investors widely use HomeKasa to reduce the burden of managing multiple properties by automating many tasks. This frees you to focus on the bigger picture like profit and loss analysis, deciding when you refinance based on mortgage interest rates and finding the next house to add to your portfolio -whether cash flow is positive or buying for appreciation. Real estate professionals built HomeKasa.

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