In recent years, e-commerce has become an integral part of our society. Every day, people do their grocery shopping, retail, banking, and investing (think crypto) in online spaces. Real estate has not escaped the demand for e-commerce options. The best thinkers in property management and technology have come together to imagine what renting could be like if it was facilitated on the cloud. And they have delivered: Online rent collection is one way to take your rental business online; online leasing is another.

Online leasing may seem counterintuitive to you at first. Why would you want to sign such an important document with a tenant without sitting across from them? What about collecting fees and deposits? How will you know if your tenant was truly the person who signed the document?

However, as you will see, online leasing actually solves-and improves on-many of the most common challenges landlords associate with leasing.

From security to convenience and automation, online leasing is one of the best aspects of modern property management. Here's how to leverage it in your rental business.

What is an Online Lease?

An online lease is just like a traditional one: It's a document that signifies the legal relationship between you and your tenant. However, online leases do so in a fully digital format. You can store your online lease on an electronic agreement company like DocuSign or HelloSign, or you might store it directly through your property management software's online leasing feature.

Like paper leases, online leases have the same key pieces of information:

• The names of all tenants and cosigners

• The lease start and end dates

• The rental rate and any additional fees, such as the security deposit or pet deposit

• The grace period for rent payment, if applicable

• The unit's occupancy limit

• The lease terms, such as rules about pets or smoking

• Procedures for maintenance and repairs

• Early termination clause

• Terms of Landlord entry

• Your pet policy

These basics are part of any lease, regardless of their form. The digital format does not release you from the responsibility to write thorough rental agreements, nor does it excuse your tenants from carefully reading your lease terms.

How Do They Work?

Although online leases contain the same information as traditional ones, they do not function in quite the same way. Online leasing allows considerable automation and security that traditional leases simply can't offer. For instance, sharing a lease online simply means sending it to your tenant via email, where they can access a shared, virtual lease document. Your software will track changes to this document and automatically notify you when a tenant or co-signer has signed it. This helps you speed up the leasing process and eliminates the need to print, make copies, or file these documents.

Additionally, digital signatures, or e-signatures, work slightly differently than "wet" signatures or pen-and-paper ones. Digital signatures are encrypted, meaning your document has a private key that can only be decrypted by the signer's public key. The decryption only works through this mutually authenticating system, meaning that you can be sure your documents are as secure as possible and only signed by the people whose names are on the agreement.

And because online leases are stored on the cloud, both you and your tenant can view a copy whenever you need to refer back to it.

Leveraging Online Leases

Now that you know what they are and how they work, what else can you do with online leases? This section discusses five different ways you can leverage the unique features of online leases.

Custom Fields

Custom fields allow landlords to designate areas that should be filled with a specific type of information. Whether it's text boxes, date fields, checkboxes, or another custom field, you can use these to create your lease exactly the way you want it. Templates with custom fields are more efficient because they allow you to use autofill or recurring fields, which automatically update different information throughout a lease and limit the time you spend clicking and typing. Finally, you can also use data validation to verify that the information a tenant enters is of the kind you want - for example if they need to enter a phone number for an employer reference, data validation will reject anything but a series of numbers in telephone format.

Templates

Lease templates are a huge advantage of online leasing. A state-specific online lease template is pre-formatted with important fields, so you don't have to worry about organization or remembering to include certain state-mandated disclosures. These templates are available on many property management software platforms, which store them for your convenience in case you need to revise or reuse a rental agreement template you've previously used. Depending on how much storage is available and its cost, you can usually store multiple leases on the platform and keep these valuable documents for the future.

Digital Signatures

As previously mentioned, you cannot fully take advantage of online leases without eSignatures. To give a little more detail, digital signatures use Personal Key Infrastructure (PKI), which generates two different keys to uniquely identify a lease signer: a public and private key. If Person A signs a lease with their private key, Person B can validate their signature by using the public key Person A provides to decrypt the signature. This method of encryption is simple, efficient, and highly secure. Digital signatures also allow you to collect the email address, IP address (location), and timestamp of the signer, allowing you to keep track of exact information about the signing that would be impossible to verify with a paper lease.

Tracking

It's important to track of each lease so that you know which ones need signing, which are awaiting your approval, and which are currently active or expiring soon. That's where online leases come in: with an online lease, it's possible to keep track of all of this automatically. Rather than keeping an Excel spreadsheet or paper record of each lease's status, all the details are stored on your software platform. You can't lose them, forget about them, or get dates confused.

Conclusion

So far, this article has neglected to mention one of the best benefits of online leasing: it allows you to complete the leasing process completely remote. From the comfort of your couch or on the go, you can finalize a lease with any new tenant. Nothing beats the flexibility, automaticity, and security of online leases, and leveraging them in your rental business is as simple as making a property management software account.