BiggerPockets

Electronic Rent Payments

One of the many challenges of investing in real estate is finding the time to manage and oversee your properties while still holding down a full time job. Of course hiring a property manager is an option, but for many investors with a small number of units it is not always cost effective. Investors with only a few properties can probably keep up with the management duties and maintain a full time job with little trouble, but for those with multiple properties this can be more difficult. In an effort to increase my customers satisfaction and reduce the amount of time I have to spend on property management duties I now take rent payments through my website with credit card, debit card, and e-check.

There are several companies that will provide the service for you just make sure you compare the cost based on the amount of business you do in a month. The tenant can either set up their payments for the whole year in advance and the money will be taken on the day they choose or they can go on line and make the payment each month. The rent then automatically goes into my business account and the tenant gets a confirmation email that it has been paid. Many of my tenants enjoy the convenience this service gives them especially here in Illinois during the winter months.

I love the service myself because it allows me to track rent payments received each month regardless of where I am physically and also allows me to pull up an electronic copy of when a particular tenant paid rent for the past year. This comes in handy when I am getting ready to renew a lease and I can show the tenant how many times they paid late over the past 12 months. It is also an easy way to see who always pays on time, or early, which allows me to send them a little gift to recognize their promptness. In addition it eliminates the over used excuses "the checks in the mail."

To increase the number of tenants who will use the automated system you can offer a discount off their rent because you don't have to have someone process their payment. You can also make it mandatory for all new tenants. Obviously, you could make exceptions for those who have no computer access. I'm not much of a computer guy, but excepting electronic payments have defiantly made my business a little easier. As I have heard many times, work smarter not harder. I continue to look at ways to automate my business and increase my cash flow which is becoming even more important in the current economy. No Excuses!

Comments

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  Bill Walston — over 1 year ago

  Excellent Shawn. I use a service like this for my tenant buyers. The service I use reports to all of the credit agencies, which in turn gives a boost to the T/B's credit report.

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  Shawn Parsh — over 1 year ago

  Bill, Having the tenant buyer's payment history go on to their credit report is a great idea. Not only does it help them re-establish their credit it also encourages them to pay their rent on time. I have always found it easier to have a third party involved so I don't have to be the bad guy. If there is another "company" that handles the payment collection and reporting it is out of my control. Thus, asking to pay rent late because of the latest life emergency is a waste because "I" don't make the decision. Great point Bill.

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  Erica Roberts — about 1 year ago

  There seems to be a lot of companies that offer this service - can you give any recommendations of the one you like or use?

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  Ben Z — 9 months ago

  I second Erica's question. Which companies are people using, what are the pro/cons of each, and what are your recommendations? Thanks to all, in advance.

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  James Mottorn II — 7 months ago

  I am a small investor so I do not qualify for a volume discount. Therefore I have been using erentpayment and it works great. Small transaction fee and completely automated.

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  Kenneth LaVoie — 5 months ago

  Many of our tenants don't have checking accounts but my bank allows them to come in and make direct deposits. The teller writes their name on the deposit slip, scans it, so I can login to my online banking and see that it was processed. Very handy. Saves them converting cash to money order then mailing it. They'd have to come to the bank anyway. Also, a "lesser known" electronic method: Paypal--if your tenant has a paypal account with enough $$$ in it OR attached to a checking account with enough money in it, they can paypal you rent for free. They have to do "send money" then select "personal" and then select an option like "living expenses." If they are using their checking account as funding source, it will proceed like an "echeck" and take 2-4 days to clear.

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  Kenneth LaVoie — 5 months ago

  Many of our tenants don't have checking accounts but my bank allows them to come in and make direct deposits. The teller writes their name on the deposit slip, scans it, so I can login to my online banking and see that it was processed. Very handy. Saves them converting cash to money order then mailing it. They'd have to come to the bank anyway. Also, a "lesser known" electronic method: Paypal--if your tenant has a paypal account with enough $$$ in it OR attached to a checking account with enough money in it, they can paypal you rent for free. They have to do "send money" then select "personal" and then select an option like "living expenses." If they are using their checking account as funding source, it will proceed like an "echeck" and take 2-4 days to clear.

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  Kenneth LaVoie — 5 months ago

  Many of our tenants don't have checking accounts but my bank allows them to come in and make direct deposits. The teller writes their name on the deposit slip, scans it, so I can login to my online banking and see that it was processed. Very handy. Saves them converting cash to money order then mailing it. They'd have to come to the bank anyway. Also, a "lesser known" electronic method: Paypal--if your tenant has a paypal account with enough $$$ in it OR attached to a checking account with enough money in it, they can paypal you rent for free. They have to do "send money" then select "personal" and then select an option like "living expenses." If they are using their checking account as funding source, it will proceed like an "echeck" and take 2-4 days to clear.