How do you collect rent?

Question

Currently, I'm using a property manager for one property.  They just direct deposit each month into my checking account.  I am buying another property and will most likely not be using a property manager for it.  What ways you collect rent electronically?  I haven't talked to the current tenant yet to see how they pay right now, maybe that's how I should start?

Watson Smith · Answer

I probably use the worse possible method to collect rents.  I have 11 tenants and 2 of them deposit it in my account, 1 sends a check monthly on the first and the other 8 I go and collect it in person.

Unlike many landlords I enjoy going in person.  Every month I shake their hand and go in the house like family.  A little small chat to see how the families doing and they normally ask how my wife is.  If their cooking I might grab a bite to eat as well.  I might even sit on the porch and drink a beer.  Time consuming - Yes - But I have very low turn over.  I've NEVER had to advertise vacancies and I have a waiting list of people calling often.  They need to see you as a person and not a mythical creature they send a check too. Most low income families never had a landlord like this... Their use to slum lords who churn and burn. I wouldn't use this method if I was renting to a more high income client.

Since I'm still small I can do this... Though later in life as my holdings grow this won't be feasible.  Its a great way to see your properties, check up on the neighborhood and make an impact on someone's life.  While this is a business you still have to enforce your rules... But good service pays dividends in the long run.

Robert M. · Answer

I have 6 units and the one year leases states and requires the following;

Direct deposit into my checking account so it shows in my account before the full price due date ( 1st of month). $50 off if deposit always before 1st ( miss one month and early pay discount disappears for balance of lease) . Net on due date and $50 late fee if not showing in my account by EOB on the 1st. I post 5 day notice on 2nd of month and start eviction ( after I give them one chance to explain delay as I have everyone's e-mail and phone and we communicate openly when needed).

They can;

electronically deposit

Walk to one of my bank branches and deposit

Use Paypal

use any system they wish

Works pretty well.

No one likes to lose $50 monthly early pay discount, I advertise my early pay amount when looking for tenants.

Steven Wiltz · Answer

Any atm of your bank. Go talk to your bank for specifics. I know BofA does it, and I've heard wells Fargo.

Mike F. · Answer

I just use Cozy, the rent gets deposited into our bank account month in month out...

Steven Wiltz · Answer

I wouldn't use PayPal ; it can be disputed, hanging up your rent. Make it easy for you first, tenants maybe.

I use deposit-only debit cards into my business checking. Each tenant gets a card printed with their address, and every card's pin is 1234. Tenants can only deposit, and only at an atm. No tellers, no balances, no withdrawals. And late night, weekends, or holidays don't matter. Wish I'd done this years ago.

Jeff B. · Answer

lookup popmoney.com - - cash from their account flows to your account with a 3-day holding period (but it's free to both parties).  When you provide the R/T+Acnt numbers, give your email or phone number and you notice when the transfer is initiated.

Robert M. · Answer

@Justin Nero I would say B properties $1300 to $2000 per month

Ben Moores · Answer

Are they able to deposit at any ATM or specifically a branch of your own bank?

Justin Nero · Answer

That sounds like a really good idea.I never heard of the $50 off before and sounds like a great way to advertise and encourage rent discipline. Here it is common practice for a grace period until the 5th. You post a 5 day notice if they are late one day? Are your properties A,B,C class?

Steven Wiltz · Answer

yup. Ask your bank.

How do you collect rent?

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