If I own a small multifamily (2, 3, or 4 units) and I occupy one of them, what is the best way to collect rent from tenants?
Since it's so small should I just knock on their door, or is there a better (and less intrusive) way of doing this?
Hey @Kyle Spinale
There are many ways to collect the rent! You can knock on the door, you can have them send you a check each month, you can have them setup bill pay on through their bank online, you can have them Venmo you money each month, you can use cozy.com, or you can pay for a platform like Buildium which uses ACH.
Just a note if you manage third party rentals you’ll need to have a platform that uses ACH due to Trust/laws that restrict other types of transfers. If just managing for yourself you can use really any thing that you think of to get them money and out it into your account.
I'm trying to think of a similar way. I'd prefer online payments vs collecting a check.
Electronic or give them a business account with deposit slips that they deposit into themselves at a local bank. Don't take checks in the mail, cash, or knock on doors. Just because you live next door doesn't mean this isn't a business. Comcast doesn't come to your door, you shouldn't go to theirs :)
My recommendation is to always manage your properties like a business. First off, you shouldn't be the one knocking on their door. They should be knocking on your door to give you the rent checks. You are a business-owner so I would recommend having a formal process set up for your tenants.
If you do want them to just drop off checks, I'd recommend setting up a physical mailbox outside your unit for them to drop rent checks in. If you'd prefer to start scaling up now, you can set up a PO Box for them to mail all their checks too... or you can use a property management software and start accepting electronic payments.
Just always take care to remember that while they might be your "neighbors" and you might become friends with them, you ARE running a business and you need to treat the collection of rent with professionalism, otherwise it can lead to problems down the road.
I would send the tenants a bill and have them mail it back to you at a P.O. Box. Having them come over to give it to you or worse, give you some story of why they can't pay could create an uncomfortable moment for you.
The bill serves as a constant reminder for them that they need to pay you.
I will look into all of the options @Peter Mckernan . Thank you for all of the resources. Are there any that you have personal experience with?
@Matt Lefebvre , thank you for the helpful advice. I think the number one thing is maintaining a business relationship with the tenants and making sure that they understand that. If you act professional, they will (should) take you as a professional.
@Kyle Spinale I use buildium which works really good, Appfolio is another that works great. Appfolio is a little more expensive than Buildium, but they both do the same thing. It comes down to preference and affordability.
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