Do you hate it when you have to chase your rent from your tenants?

28 Replies

Good one!  Thanks for sharing Account Closed 

That's a pretty good one.  It's always good to make it as easy as possible, and the biggest improvement I've made is going all electronic in terms of collecting rent.  (I use Buildium.)  

That being said, I think all the tricks in the world won't do you any good unless the tenants know to prioritize paying rent first.  I used to hate doing it, but I now vigorously enforce late fees, and I send out a notice to vacate (pay or quit) on the fourth, even if they have called in advance and said they will pay late.   (I obviously don't file right away or anything.)  My notice is pretty scary, and if tenant tries to short  the late fee (which they will sometimes do), I promptly follow up and let them know that rent is not considered fully paid.  It may seem mean, but it's the only way to train some of them.

@John Chapman  , I totally agree with you. Tenants are like employees. You have to train them to follow your rules. Otherwise, they will train you and you won't like it. 

Thanks for sharing Buildium. I will check it out.

That's pretty clever! All my tenants pay via Chase QuickPay. It's convenient and doesn't have any fees. But I do miss that "new check smell." Thanks Account Closed 

I do direct deposit with all my tenants! That has prevented 95% of all the hassles you are describing. 

John I am the same way. I am on top of my tenants. While I am always professional, I am very strict and have specific rules. This has made it very easy. My tenants knows the expectations and consequences.

I have tenants make the deposit into my checking account and I also have a few that use Chase Quick pay which was already mentioned. Quick pay is a great feature and is effortless!

I still have 1 tenant who mails me a check monthly, however my Bank offers a feature that allows you to take a picture of the check for deposit sio I no longer have to huff it to teh bank to make the deposit.

Gotta love technology!

best regards,

Chris

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Clever. Thanks for sharing. 

I use https://www.erentpayment.com. Similar concept where the tenant pre-authorizes the recurring payment, and it happens electronically. It's just a $3 transaction fee, which I think is well worth the convenience. I think quite a few others on this board use it as well. There are other solutions out there similar in nature that I explored initially, but this is the one I opted for based mostly on its price. I've been really happy with it

This is a clever idea and having the paper trail is nice. 

My thought is that any "direct deposit" or like-kind service should be able to provide both the tenant and landlord a receipt every time the rent was take out of the tenant's bank account and deposited into landlord's bank account. If that is the case, wouldn't that be the paper trail as well? 

I am a big fan of direct deposit. What are some of the best direct deposit services out there?

Originally posted by @Derek Martin:

That's pretty clever! All my tenants pay via Chase QuickPay. It's convenient and doesn't have any fees. But I do miss that "new check smell." Thanks @Wendell De Guzman 

 You're very welcome Derek!

Originally posted by @Elizabeth C.:

I do direct deposit with all my tenants! That has prevented 95% of all the hassles you are describing. 

John I am the same way. I am on top of my tenants. While I am always professional, I am very strict and have specific rules. This has made it very easy. My tenants knows the expectations and consequences.

 Nice. We have the exact experience. Once we implement Check Authorization, non payment of rent and lates dropped to less than 10% also. We also couple our Check Authorization by sending our tenants an invoice so they will be reminded that the rent is due and will be withdrawn from their bank account.

I haven't tried this but have the idea to give incentives to renters to pay on time consistently. One example I thought of was to start the rent 50$ higher than it would be and give a $10 discount on rent each month that it was paid on time up to 5 consecutive months and as long as they kept it up the rent would stay to $50 less than they started but if they miss just one deadline for rent then the full $50 would come back on top of the normal rent and they would start over again, pay on time for 5 consecutive months for $10/mth.

Or another idea was to give a credit. People who pay on time for each 4 months straight get 1 credit for paying late without fees and the fee could be something high like $100.

Any thoughts? Anyone try something like this out before or heard of incentives similar to this?

Originally posted by @Arvin Daeizadeh:

I haven't tried this but have the idea to give incentives to renters to pay on time consistently. One example I thought of was to start the rent 50$ higher than it would be and give a $10 discount on rent each month that it was paid on time up to 5 consecutive months and as long as they kept it up the rent would stay to $50 less than they started but if they miss just one deadline for rent then the full $50 would come back on top of the normal rent and they would start over again, pay on time for 5 consecutive months for $10/mth.

Or another idea was to give a credit. People who pay on time for each 4 months straight get 1 credit for paying late without fees and the fee could be something high like $100.

Any thoughts? Anyone try something like this out before or heard of incentives similar to this?

Sounds complicated. More work on your part too. Also, could make evictions for non-payment of rent more difficult.

There are easier ways to encourage on time rent payments.... clearly state the terms in your rental agreement, discuss the importance of timely rent at the time of move in, make paying rent easy, establish and enforce reasonable late fees, follow up on stragglers by offering to them a move out plan, use "pay rent or quit" notices appropriately, reward tenants who pay on time by letting them know you appreciate it... tell them in person, send a thank you note, or periodically surprise them with a thank you gift.

We tell our tenants they can give us the entire lease term of checks, postdated to the 1st of each month they are due. Most of our tenants do that, works great.

I don't chase them.  I give them multiple options to pay (electronic, mail, or drop off at my secure box) and if they don't pay then they get a 3 day notice on the 6th and an eviction filed after that.  I can't babysit them all.  They know when the rent is due and they need to make sure they pay it, that's not my job.  

I have them deposit the check in my checking account. I send out a bill every month by the 17th, detailing how much they should pay, my account number, due date and simple instructions. I check my account on the third. If the money is not there they are in trouble.
This works particularly well in roommate situations. I differentiate the properties by slightly different rent amounts (eg 1795 vs 1796) and told all my tenants to deposit entire rent amount at once.

I think a lot of this is dependent on the demographic or socioeconomic status of renters. I think middle class renters don't, or shouldn't, need much encouragement as their finances should be much better off. I find that my current renters who are middle class don't have issues with having the money rather than just forgetting or being careless at times.

I think that with low income renters the challenge is their personal finances and just not having the money to pay rather than just forgetting so that is why I thought of an incentive with money or rent discount. I think that even if you were to set up a check draft authorization or get post dated checks you still will have late rent for those renters who just don't have the money in their accounts. On the other hand it should work great for middle income people who just are careless/forgetful. 

Does anyone have different experiences or things that work with different income status renters?

@Nazz Wang  

That is a very good idea with the different rent amounts to know who paid since they are all depositing at the same time in the same account. I do that and also have them send me a pic of the receipt or the screen shot of the transfer. This way the date, name, and amount are connected together for me to verify who paid when.

@Arvin Daeizadeh  

Great idea! You are right on. Thanks for sharing that idea. This is the way I have always done it and had never had any problems. The only thing is any commercial big bank where this is convenient also has expensive other financial services. So I always transfers money to my other better bank for my own banking. An extra step but Wells Fargo is everywhere. 

I haven't stream lined my rent collection and after reading this I definitely have to!  

This is how my tenants pay:

1st house.             Tenant drops off check at my house ( I have to arrange for my wife or I to be there and she's friendly and likes to talk, so it takes longer then it should.)

2nd house.            Tenant mails check (potential of being lost in the mail)

3rd/4th house.       Pick up rent at their residence (Have to contact them to make sure their there)

5th house.             Mailed to me via their bank (probably the easiest)

@Nazz Wang  You're welcome, glad it was helpful!

@Peter Dascoulias II  That is the main problem with being the point person for collecting rent. There is always the potential excuse that they couldn't pay on time since they couldn't connect with you. Taking yourself out of the equation and automating is great option and of course necessary to scale. If you are using a big bank then use their infrastructure to your advantage! They are everywhere, ATMs are 24/7, and have staff paid to serve them as if they are your own customers!

Good thing about a bounced check is that unlike paying rent writing a bad check is a crime.

I've had success getting the police to collect on bad checks.

I don't know if it applies to the o.p.'so method but a regular check it will work.

Account Closed 

We have all but three of our tenants on electronic payment - either direct deposit or Interac e-Transfer (a Canadian thing, but VISA has a similar service now).  No paper, no hassle, no going out in the snow when its -35 ...  just sit at home - or anywhere - and deposit the e-Transfers ;-)

Among the three hold outs - two are still using post-dated cheques and the old codger insists on paying in cash ... so we have given him a deposit only bank card and he takes his rent into the bank himself.

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