Investor · Minneapolis, MN · Member since 2013 · 59 posts · 11 votes
I'm a landlord pondering electronic rent payment... I love automation in business and this seems to be a no-brainer but I understand many landlords have not adopted it. There are lots of options, so it's a little confusing with all of them...
Here are a few quick questions:
1) If you personally don't use electronic rent collection, why not (or why not yet?)
2) If you use electronic rent collection, which do you use and why?
3) What features do you like?
4) What would you change or add to the service you use (or would use if it had this feature) if you could?
Bonus question: What else would you (or do you already) automate in your landlording and/or real estate business if you could?
@Justin Hennig,
I am older and understand the younger generation is hooked on automation and technology, thus avoiding work - yes I said it.
Ding Ding Ding!!!!
I want to avoid doing work that are superfluous non value added tasks like going to the bank to make deposits, going to a rental to collect rent, or checking in with the residents if the payment isn't in on time.
Exactly. It has nothing to do with avoiding work.
That's like saying that driving a car is LAZY, and one should only ride horses and buggies as they did 100 years ago.
Technology is here, and there are PLENTY of ways to stay connected to your tenants, including birthday cards, Gift Cards for when they pay early each month, Xmas cards, etc.
Don't cut off the nose, to spite the face. Welcome to productivity and results in the 21st century.
I just had an offer accepted on my first rental property and am thinking of requiring Dwolla. They provide electronic bank to bank transfer for only 25 cents per transaction. Dwolla also allows for reoccurring payments.
I've only just signed the paperwork for my first property, which will be my own residence with rooommates to cover the expenses until I move out and start renting it (possibly within a year). Since I'll be collecting rent from roommates, I'll probably not set up anything special -- just let them give the money to me however it's convenient.
However, as I start accumulating rental properties and renting to true tenants, I do plan on giving them the option to pay online. I plan on making a website to automate most of my real estate functions at that point anyways -- marketing, maintenance requests, payment. I figure, as a software developer, I should be able to hack up a rudimentary system pretty quickly.
If there's not a system out there already, I'm open to providing whatever I end up creating to other investors, too.
I'd imagine it'd be a good idea to allow options -- online payment or by snail-mail -- for people like @Account Closed mentions. Although it probably depends on your market (if you're trying to attract young professionals, for example, you might not even allow the mail option, since I imagine very few of them would even care)
All of my rentals are paid via "Re-Occurring Electronic Fund Transfer" on the first of each month. I use erentpayment.com, they charge $3 for this service per transaction. The tenant receives an email to set this up and is secure for both the landlord and tenant.
It is a requirement of the lease that "re-occurring electronic payments must be set up". I tell them that before they fill an application out. It also insures they have a bank account.
@Oliver Trojahn that's definitely the ideal situation, in my opinion. When I get this investing thing rolling I'm hoping to automate as much of it away as possible.
Of course, like I said before, I imagine it depends heavily on your market. If you're marketing to middle-class or young professionals who use a computer and own a bank account, that's perfect. However, a lot of people on here seem to have tenants who are mostly lower-class and have neither a bank account nor a computer.
I even remember, when I sold insurance door-to-door, I met many seemingly successful people who didn't have bank accounts -- not because they didn't have the money, but because they just didn't want to have a bank account!
All of my rentals are paid via "Re-Occurring Electronic Fund Transfer" on the first of each month. I use erentpayment.com, they charge $3 for this service per transaction. The tenant receives an email to set this up and is secure for both the landlord and tenant.
It is a requirement of the lease that "re-occurring electronic payments must be set up". I tell them that before they fill an application out. It also insures they have a bank account.
Wouldn't do it any other way.
We also use ERentPayment.com. Great site. Great customer service the one time I had a question.
Not an option for my tenants. If they want to rent with me, they will pay through this service.
2) williampaid.com. It was 100% free for tenant and landlord and seemed simple.
3) its free.
4) I am confused as a landlord on the tenant sign up process. Your tenants must search for their landlord. There does not seem to be a way that I can email a link to a tenant to pay me. This seems like someone else can create a landlord account as my name, and start stealing my rent checks!
I am not sure if I will continue to use them.
Edit: Also, Tenants set their own rent amount. I wish there was a way to block partial payments.
I am older and understand the younger generation is hooked on automation and technology, thus avoiding work - yes I said it.
However, more of your time may improve your success.
For your consideration. I have many years of collecting money ... since the 1960s. I have always found people prefer to pay people with whom they have a personal and emotional connection. I maintain a monthly email connection with all of my payers that goes beyond the collection of money. For example, a few days ago it snowed in Colorado. This bit of information was sent to my payers.
Sometimes I bring up the subject of barbequing - a favorite subject of mine.
Another way to look at automation vs. a personal connection is to consider your own feelings. How enthusiastic are you to send money to pay a credit card? You are nothing but another number to them. Now, how would you feel sending a payment to the landlord that comes by every now and then just to say HI and ask how the kids are doing - no inspection, just a friendly visit?
I would bet the landlord is paid more timely and eagerly in my example. I also would bet the property receives better care.
Another consideration, I am well known by just about every person who works at the bank where I do business. Bank employees look forward to me coming in and shooting the breeze. This little bit of my time (politician call this working the crowd) can increase my profitability in many, many ways.
Just another way to look at the real estate business. Too often, some forget this is primarily a people business. Without the people, you have no buyers or tenants and nothing to do. Moreover, if the tenant feels like they are paying a cold person, the property will suffer and so will your profitability.
Anybody use Dwolla as Josh Matthews suggested? Seems like there's a consensus thumbs up for erentpayment.com, but Dwolla only costs 25c per transaction. I guess you could build the $3 erentpayment fee into the rent and not worry about it, but it would save $33 per unit to use Dwolla if it works well.
Thanks for the automation suggestion, I think it's one I'll adopt immediately, and I LOVE the recurring idea and I think erentpayment has the option to build in a late payment automatically if the payment is made late.
I have required my tenants to deposit rent directly into my checking account over the last 2 years. It has worked extremely well. They don't have to worry about a check getting lost and I rarely have to worry about bounced check. Even the most irresponsible tenants won't deposit a check from an account that doesn't have any money.
I use both erentpayment (which costs $3.00 per transaction) and Intuit Payment which is only .50 cents per transaction. Erentpayment had by far the best customer service but Intuit I cheaper. I can recommend both.
I use both erentpayment (which costs $3.00 per transaction) and Intuit Payment which is only .50 cents per transaction. Erentpayment has by far the best customer service but Intuit is cheaper. I can recommend both.
My tenants drop rent off at my house. They can see that I don't live in a mansion and my house doesn't look really any fancier than theirs. (At least on the outside.)
I am older and understand the younger generation is hooked on automation and technology, thus avoiding work - yes I said it.
Ding Ding Ding!!!!
I want to avoid doing work that are superfluous non value added tasks like going to the bank to make deposits, going to a rental to collect rent, or checking in with the residents if the payment isn't in on time.
The students in our single family drop off rent at the property manager usually cash or check but the property manager is about 2 blocks from the house. Some of the tenants at our 5 unit are older and all prefer checks which they want to hand to someone. I am going to have to change that as we won't be at the property much once major projects are done. I don't think they would adjust well to electronics. I asked for an email and half don't have one. erent systems seemed like a good idea to me but it does depend on your tenant population.
2) It takes 4 business days or more to transfer ACH the deposit to me. With normal checks, my bank will "cash" them for me the very same day.
I have used online rent collection before. The fees and waiting time made it more of a hassle. If I had a multiplex, I would do it... otherwise, not necessary for me.
@Justin Hennig,
I am older and understand the younger generation is hooked on automation and technology, thus avoiding work - yes I said it.
Ding Ding Ding!!!!
I want to avoid doing work that are superfluous non value added tasks like going to the bank to make deposits, going to a rental to collect rent, or checking in with the residents if the payment isn't in on time.
Exactly. It has nothing to do with avoiding work.
That's like saying that driving a car is LAZY, and one should only ride horses and buggies as they did 100 years ago.
Technology is here, and there are PLENTY of ways to stay connected to your tenants, including birthday cards, Gift Cards for when they pay early each month, Xmas cards, etc.
Don't cut off the nose, to spite the face. Welcome to productivity and results in the 21st century.
I use www.erentpayment.com as well, as others have said, great customer service. My husband and I have multiple rental properties, and as they accumulated, several of the rents were the same. The tenants were depositing directly into our business account, but then we didn't know who did and didn't pay the rent.
If a new tenant's rent is different than anyone else's, I'll give them the option of directly depositing at the bank. If not, they have no choice but to use the online rent payment system. Yes, it does take up to 4 days to actually have the funds credited to my account, but I get an email notification when the transaction occurs and I know who paid what when.
How do I put this gently. I'm armed from the 1st of the month until about the 10th when the final CASH payment rolls in. I doubt any of my tenants have a computer, let alone a bank account to transfer funds via one of these services. They all seem to have a smart phone. I do have a new tenant who actually has a bank account and mails his check to me promptly on the 1st of the month. He is a rare bird in my world. Meeting up with my tenants gives me the opportunity to look at each property every month and assess what is going on. The low end is a different world.
I started about a year ago having tenants deposit into a checking account in my name but it is not attached to any other account. The renters can deposit cash or check to that account. They can do it electronically or in person. I tell them this when we sign the lease. It is not an option. I have them put their name on the deposit slip and they keep it for their records. I absolutely love it! Way better for me and tenant. No more waiting on checks in the mail or meeting to get rents. Would never go back to the old way.