Rentec Direct - Property Management Software

Given the current fragile state of the economy I participate in a lot of conversations about "what if".  What if the economy collapses?   What if it turns around and begins it's path upward?  So then for us landlords and property investors is it best to have our properties paid off free and clear, or should we have them mortgaged to the hilt? 

The answer really depends on what is going to happen with the US Dollar.  If you take a look at the last few years, obviously the USD has not fared well.  The USD is no longer money and hasn't been for a long time, it's currency backed by nothing.  The same goes for the world currency.  History has proven over and over that fiat currency has a 100% failure rate.  It typically fails in the form of moderate inflation, followed by hyper-inflation, until the currently is completely worthless.

In Zimbabwe for instance their fiat currency just recently inflated well over 200 MILLION percent.  Can you imagine it costing trillions of dollars to buy a loaf of bread?  This example has repeated itself with many countries throughout history who adopted a fiat currency.  This is the fate of every fiat currency in the world, including the USD.  The only question remains is: when?

When that day comes, be it next year, or 10 years from now, will it be best to have all your debts paid off or have a ton owing?  I'm really open to AR members ideas here.

My own opinion is it's going to be best to have everything leveraged.  If moderate inflation continues, as each year passes you literally owe less on your properties.  A $200,000 loan today will be like a $100,000 loan in 5 years if inflation presses on.  If (or when) the USD goes into hyperinflation, a $200,000 loan will cost a mere couple cents to pay off in the future.

However the flip side to the coin.  What if the USD started deflating?  The exact opposite would happen.  It would be much harder to pay off a loan because we would be earning less.  Rents would go down along with other commodities.  This would be very bad, and likely the best place to be in this situation is in a free and clear position with properties.

So how likely is deflation to occur?  There might be momentary blips; however, the entire arc of power in DC and Wall Street do not want deflation to occur.  It's bad for government and it's bad for banks.  Since the government and the banks have complete control over money supply, and therefore complete control over inflation/deflation it seems unlikely. 

Inflation on the other hand seems extremely likely.  Each dollar the Fed prints, and each new loan creates more fiat currency.  Every dollar printed (or in reality, created from thin air), slightly devalues all existing dollars.  Since the government is running a huge deficit (the largest in history) now in the trillions, they have to print money faster than they are spending it to remain in business.  So they are creating money faster than ever before and inflation will adjust to compensate with some of the highest inflation we've ever seen in the USD.

I'm not a betting man necessarily; however, if I had to place wagers I would certainly go with the odds.  What would you do?

--- about the author ---

Nathan is a landlord and property investor who founded Rentec Direct which provides free software for landlords.  Because of the importance of thorough screening for prospective tenants, we have integrated tenant screening directly into the software so in just a few clicks a complete and comprehensive background check including previous evictions can be done on any new tenants.

Wouldn't it be nice if your computer would be so kind as to give you this message "Your Computer Is About To Crash.  Backup Now!".  Unfortunatly it won't, and as a result many of us will be left with a busted computer and a loss of data.

It happens every minute of every day.  An unsuspecting PC or Mac user all of a sudden gets an inoperable computer, and all their data goes with it.  Why does this happen so often?  There are various reasons, but it usually boils down to the hard drive.  The hard drive is a bunch of platters stored in a small box inside the case of your computer.  These platters are always spinning at 7200RPM while your computer is active.  This spinning causes a lot of heat, and wear on the bearings of the device.  The useful lifespan of a hard drive is 3-5 years, with newer drives being closer to 3 because manufacturing methods continue to get cheaper.

So is your current computer older than 3 years?  If so, you have an imminent failure approaching. The good news is there is something you can do about it today.  Backup!  If you think your company or your IT administrator is doing it for you, think again!  Most backups are incomplete or done incorrectly.  Don't trust your data to someone else or you may end up re-doing every template, every email, every picture you've ever created yourself prior to today.  Backing up is really easy to do.  Here's a few methods:

1. Flash Drive - These keychain devices are sold everywhere in amounts up to 64GB.  Backing up to one of these drive which cost from $5-$50 could save you hundreds of hours of work in the future.
2. DVD / CD - Most computers nowdays come with DVD/CD writer drives.  These discs hold a finite amount of storage, but for many is enough to get a complete backup.  You can have many levels of backups becuase both CD-R and DVD-R dicss are just pennies apeice.
3. Networked Computer - Do you have a fileserver or other computer networked in your home/office?  You can use your own network to backup your files from your computer to another computer.  Be sure the other computer is trusted before doing this.
4. Tape - I'm somewhat suprised they are still selling these as the technology is so old.  You can buy a tape drive for your computer and backup to tape at any interval you choose.  This is great for permanent archival; however, probably my least favorite of the available options.
5. Online Backup - There are now tons of online backup solutions available.   They give you an application to download which will automatically, using your internet connection, copy the data you specify offsite for storage.  This is an excellent solution if you have a broadband internet connection and less than around 10GB of data to backup.  Dont' use this for music or movies.
6. Use Online Applications - One of the simplest ways to become more portable and become worry-free about backups is to use online applications instead of local ones.  Online apps such as Google Docs and Rentec Direct run via your web browser and are running on a powerful server in a data center somewhere.  They automatically do the backups and are responsible for the data.  The added benefit besides data security is you can access it from anywhere in the world at any time.

Whichever of these methods you choose, or if you create your own, my primary concern is that everyone backup!  Another very important and often overlooked component of backups is verifying if they work.  Sometimes, backups are not restorable and a backup does you no good if it can't be restored.  Follow these steps to make sure your backups are working for you.

1. Restore - Restore your backup periodically to make sure the files restored from it are everything your intending to backup and to ensure that the files are not corrupt.  Open a few documents to make sure they are what they seem.
2. Verify - Verify the backups are running automatically and completely.  A lot of us use Outlook for email and if Outlook is left open your backup program cannot back it up.  Your backup program needs to be smart enough to shut down Outlook prior to starting it's backup otherwise your email is not being backed up.
3. Security - Your backups are sensitive.  Make sure they are not available to any 3rd party that you don't want seeing that data.  Also, in a worst case scenario (fire, meteor, etc), make sure your backups are stored off-site.

I woke up this morning thinking about how important this topic is and decided to write this short article.  If it saves just a single person from losing their data and thereby saving hundreds, maybe thousands of hours of work in the future; then my time was well spent!

--- about the author ---

Rentec Direct provides property management software free to landlords and property managers and it includes automated online backups. Because of the importance of thorough screening for prospective tenants, we have integrated tenant screening directly into the software so in just a few clicks a complete and comprehensive background check including previous evictions can be done on any new tenants.