It’s the beginning of a new month which means it’s time to pay all of the bills on my rental properties. This includes multiple mortgages, multiple HOA dues and payments to owners of some of my lease option properties. So, how do I keep track of all this without going crazy?
First, I use online bill pay. If you’re still writing checks you are unnecessarily wasting a lot of time. Before I started paying my bills online I would sit down once a month for what seemed like hours to pay all the bills.
I Recommend this Rental Property Software
After I pay all of my bills online, I next record my HOA, mortgage and rent payments in Quicken rental property manager. This is the simplest property management software I have found. Plus, when tax time comes around, all you have to do is hit “print”, then hand your accountant the rental documents and he/she will take care of the rest. If you don’t have an accountant yet and you own multiple properties, ask for referrals from other investors you meet at your local real estate meetings. Or, you can use BiggerPockets.com (this website) to locate investors near you.
How do I keep track of all of these payments?
Well, since I’m pretty simple I use Google calendar. I use this calendar because I have to make certain HOA payments at different times of the month. I have a townhouse in Manassas, VA where the HOA dues must be paid by the 5th of the month or they’re considered late.
I have another townhouse in Manassas where the payments aren’t due until the 15th. And, I have a townhouse in Stafford, VA where the payments aren’t due until the 31st of the month. Obviously, I want to keep my money in my checking account as long as possible, so I make various payments at different times; the calendar helps me track it all.
How Do Your Tenants Pay Their Rent?
Now, besides using online bill pay, I also highly suggest you receive electronic rent payments. You can use companies such as PayLease or ClearNow, however, they’re not really necessary. You can just have your tenants use ACH direct deposit instead.
In fact, I now require my tenants to use direct deposit. But I do have tenants that have been with me for years who I still allow to pay by check. And guess what? Last month one of my tenant’s checks got lost in the mail. I know it got lost because this is an honest tenant who has always paid on time. Also, several years ago I had a tenant lose two checks in a row in the mail and I found out there was a new mailman in the area (you really have no idea how many pieces of mail get lost every year).
Anyway, every time you’re doing a real estate activity I hope you’re asking yourself, “Is this the highest and best use of my time and does this make my business less complicated.” Online bill pay, an online calendar and getting your tenants to use direct deposit are “yes” answers to the above questions.
By the way, you can also setup automatic bill payments; that way you never have to worry about late fees (a stupid and unnecessary waste of your hard earned money).
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- Web 2.0 + Rental Property Management = RentYield.com
Article Author: Jason HansonJason has written 185 articles for us.
Visit Jason's Website: http://www.PrimoCoach.com
Jason R. Hanson is the founder of National Real Estate Investor Month and the author of “How to Build a Real Estate Empire”. Jason specializes in purchasing properties “subject-to” and has purchased millions of dollars worth of property using none of his own cash or credit.
Joshua Dorkin
{ 9 comments… read them below or add one }
Have you had any blowback from potential tenants in mandating that they pay the rent via direct deposit?
Instead of using 3 programs (Quicken, Google Calendar, Bank Direct Deposit), you can use Rentmatic (www.rentmatic.com), which allows you to store property information, create a rent roll and processes tenant’s ACH payments. It is easier because you are able to see which tenants have paid in your rent roll/deposit history, rather than having direct deposits that don’t synch with your rent roll.
Are you a satisfied user of this program, or do you work for them, Christine?
I will say up front that I am a Quicken competitor. There are many other products (not just mine) that are far more sophisticated than QRP. I would strongly recommend that anyone considering QRP find a way to check it out before buying (there is no free demo AFAIK).
That’s it. I’m finally convinced. I have been putting this off but your article has really encouraged me to go ahead and get started with on line bill pay. I can see that it would save me hours every month and then make income tax so much easier.
Tell me more about ACH, I talked to my bank and they had some electronic bank draft program that I had to pay for and I had to manage on a constant basis. Didn’t seem very worthwhile to me. What is ACH?
We prefer QuickBooks as you can use it to remind you for your bills, pay online bills and collect ACH.
Bills: create and memorize your bills, and track bills dues, date, amount and to whom.
Calender: When you enter the bills – there will be reminders for which bills are due when.
Online bill pay: Pay bills right within QuickBooks. Check with your bank whether it will let you connect QuickBooks to their online bank to pay the bills. Some banks to charge free. We use TDBank – is Free!
ACH: QuickBooks does it again – just started this new ACH service.
And it handles more – tenant statement, budgets, reports etc.
You seem to have a pretty solid method going on here, I’d like to know more about the software you use for online payments, and also if any tenants had a problem with this?
How I collect rents:
1. I setup a deposit only account at my bank that maintains a zero balance.
2. I gave the tenant a set of payment slips that includes the Bank routing and account number.
3. The tenant can go into any bank branch and deposit the rent directly into my “deposit only” account.
4. The bank setup a daily sweep for me that moves all money from the “deposit only” account into my LLC account automatically.
Bonus, there is a 24 Hour branch of the bank inside the 24 hr Walmart within 2 miles of my rentals.
Rent is late after midnight on the 3rd day, so the tenant has no excuse and there are no “lost checks”.
Robin