"Hack" of the Week - 10/6/14 -How to NOT Chase Tenants for their Rent
Landlords, you will love this "Hack" of the Week.
As a landlord myself, one of the things I love the most is walking in my bank with many rent checks on hand and depositing them. If other investors love looking at houses and driving around neighborhoods...to me...what gets me inspired is making those monthly trips to my bank. Depositing rent checks is my favorite real estate activity. Tweet that Brandon Turner!
However, when the rent checks don't come in on time and I have to make that phone call to that tenant to remind him to send me his check...let's just say, that's my least favorite real estate activity. I hate chasing rent checks.
You want to solve that problem in a hurry?
Here's the "Hack" of the week: PRINT your tenant's rent check from your printer and deposit it in your bank account. How do you do this exactly?
Step 1. Get a Check Authorization Form signed by your tenants
You can tell your tenants for their convenience, they don't even need to send you a rent check. But you need them to give you a check authorization. Below is a screen shot of a sample check authorization: (you can then have the tenant attach a voided check)
Step 2. Get a Check Writer software and some blank checks. Below is a product review on the top 10 check writer software you can use:
Step 3. Every first of the month, print the checks and deposit them in your bank!
Of course getting the tenant's rent to be automatically debited from the tenant's bank account to your account is the most convenient way. Some tenants can also pay you via Paypal or other online payment system.
However, I like printing the checks for three reasons.
1. Other than the cost of the check writer software and the blank checks, printing checks is pretty cheap. Paypal is too expensive. The other online payment systems are more expensive than the few cents it takes for you to print those checks.
2. I have paper trail that my tenants can use to prove they are paying rents on time (they have images of their checks that I printed and deposited as proof). This is good specially when I am doing rent to own and my tenants are getting bank financing.
3. I like feeling and smelling the checks in my hand and actually getting off my behind and depositing those checks. To me, making money is a mental game. Me bringing those checks to my bank and depositing them makes me feel good and I attract more money as a result. Try it. It's weird but it works.
Of course, even though you print the check, it does not mean it will never bounce. We have tenants who tell us NOT to deposit their rent check as of yet because their salary has not come in yet. We have some who didn't realize their rent is due and they have not funded their accounts (and of course the check bounce). There's no fool proof payment system I guess but being able to print your tenants' check is a heck of a lot better than calling the tenants to remind them to mail the rent already.
No more chasing the rent. Just print it, deposit and GO!