Ways to collect rent

[Gisell Garcia]

Hello,

I am new to the real estate world and about to rent out our SFH. I was wondering how you guys collect your rent? I was thinking of setting up Zelle and/or Venmo but not sure if that's a good idea. Are there any reliable software that you guys use for this? Thank you!

[Kenny Dahill]

@Gisell Garcia@Miguel Angel, anyways I've built our own rent collection software, I'm still realistic and understand why landlords choose Venmo/Zelle.  Let's break this down, shall we?

Peer-to-Peer:  Popular apps that allow anybody to pay each other.  i.e. Zelle and Venmo

-  Pro's:  Super simple.  They have literally millions of users and transactions to perfect their processes and features.  And it's convenient for life if you use your personal bank account, you can still have one app for rentals and paying friends.

-  Con's:  Nothing about the software per say, but about the landlord experience.  These apps don't know what type of payment is being sent, when rent was actually due, etc.  Therefore, it can't add automatic late fees, send email reminders or track per property.  If you're okay with not having any of those, then hey, they're an amazing free option that your tenants will like.

Landlord Software:  Software and platforms designed specifically for landlords and typically have more than just rent collection.

-  Pro's:  Additional functionalities, such as tracking maintenance, automated bookkeeping, screening reports, etc.  They provide essentially all the tools under one roof for you.  As well, these platforms are designed to acknowledge the different payment types and dates.  Thus allowing you to set automatic late fees in case the tenants doesn't pay before the end of grace period.  Note, there's typically email reminders sent to the tenants as well.

-  Con's:  Fees.  Yes, these platforms need revenue to survive and typically the easiest way is charging a monthly membership or per transaction fee.  User Experience not nearly as easy.  Again, I'm realistic and while I love our platform and our competitors, nobody comes close to the level of simplicity that Zelle or Venmo has.  Usually landlords don't care but some tenants prefer a basic app like Zelle/Venmo.

Full transparency: I've used Venmo and Zelle in the past to collect rents.  They worked great.  For 1-2 units, they suffice.  For me, I wanted to portray my real estate investments as more professional and that was the main reason I switched to using landlord software for rent collections.  The larger your portfolio grows, the better systems are.  You can definitely integrate Zelle/Venmo into your systems but there's easier ways.