El Paso, TX · Member since 2016 · 71 posts · 22 votes
We recently bought a 5 unit property in an older historic area that is seeing some growth. We got a good deal and the rents have been kept artificially low which allows plenty room for more cash flow. Only problem is that the current tenants don't have bank accounts and generally pay by check or money order. That means we have to show up several times at the beginning of the month to collect.
What are you guys doing to avoid having to physically collect rent payments? A couple of the tenants in this particular building aren't very savvy with the internet either.
There is something called the MAIL. It amazes me how much we, as landlords, try to "cater" to our tenants.
When I rent my homes out, I do a credit check and I screen the applicants inside and out. And I chose people who are 'COLLECTIBLE', but also 'RESPONSIBLE ADULTS'. Therefore, this entails, them being capable of stopping off at a post office or a mail box at their line of work, or somewhere, and mail their rent.
If a Tenant expects me to knock on the door and collect their rent, they aren't anyone I want as a tenant. My time is too valuable, and I'm too busy, much busier then they are!
If they don't have the rent in my office on or before the first of the month, their rent is late, and I send them that Notice To Quit on the very first day rent is late.
Am I too tough? Nope, I just expect people to pay their bills on time, and since I chose applicants who paid their bills on time, I hold them to the same standards as anyone else.
You hit the nail on the head! That's exactly the case and I didn't think to take certain bill paying habits into consideration. Being in a border town definitely requires cultural knowledge especially in business situations. Thanks so much for reminding me of that. There is a local bank a couple blocks away that we're going to set up a deposit only account in. This property is just outside of downtown so the nearest walmart is on the other side of town.
With those of you giving deposit slips, or online- how can you enforce full months rent only? Here in WI at least, a partial payment will allow a tenant to stay and void an eviction process if it's in the works.
What I did do for my tenants is I gave them 11 addressed envelopes. Literally they just have to write a check, insert into envelope and drop it in the mail.
Ditto...ordered labels with our box address printed and put them on a year's supply of envelopes for each tenant. That way no issues with address mistakes or bad handwriting! They do have to provide their own stamps though!
PayNearMe is awesome for tenants who do not have bank accounts, which is pretty much all but one of my tenants. They go to their nearest 7-Eleven, pay the money using the PayNearMe slip you provide them, and you get an instantaneous email or text stating your tenant has paid their rent. It's good to see when they actually paid. You can set it up to where the slip is unusable unless the full rent amount for that month is paid. My tenants love it. No more money orders to mail. It's win / win.
PayNearMe is awesome for tenants who do not have bank accounts, which is pretty much all but one of my tenants. They go to their nearest 7-Eleven, pay the money using the PayNearMe slip you provide them, and you get an instantaneous email or text stating your tenant has paid their rent. It's good to see when they actually paid. You can set it up to where the slip is unusable unless the full rent amount for that month is paid. My tenants love it. No more money orders to mail. It's win / win.
I've never heard of something like this before. Just checked their site and the service sounds great. It really seems to help out tenants barred by banking limitations (such as the ever-increasing overdraft fees and account minimums). Thanks for your suggestion!
My personal experience with Cozy.co is that a pain in the rear to set up on my end, the tenant I tried it with couldn't get it set up properly on their end, it's slow, and so I gave up on the whole thing.
Intuit has several mechanisms for tenants to pay online via their checkbook. It's really simple and has worked well so far, but it does come with a small charge.
You hit the nail on the head! That's exactly the case and I didn't think to take certain bill paying habits into consideration. Being in a border town definitely requires cultural knowledge especially in business situations. Thanks so much for reminding me of that. There is a local bank a couple blocks away that we're going to set up a deposit only account in. This property is just outside of downtown so the nearest walmart is on the other side of town.
Perfect! They can just walk. Just provide them with the deposit slips and where they need to go, and they should be fine. If you can give them written instructions in Spanish, that would be helpful, if you don't speak Spanish. Even the poor in Mexico get good Catholic educations, from what I saw, so reading and writing wouldn't be an issue. In fact, they have such beautiful handwriting! I went to Catholic school and they made us practice, practice, practice penmanship way back when. Not so much anymore in the U.S., but still going strong in Mexico from what I saw.
I had tenants in So Cal that were cash payers. I gave them my bank account number and they deposited cash into my account by the 5th. They were my tenants for 18 years, never missed a payment even during the recession, and continue to live there even though I 1031 exchanged that property. Hope this helps. BTW they were Mexican and were wonderful people.
I was wondering if anyone have used the same bank transfer function, for example BoA. You can transfer money to another customer if you give the account number or you can setup a phone number that links to your account number. (in fact can send across different bank also) I was just wondering if that is a better alternative to paying by check. It's not as strong of a paper trail but it should all show up as account statements.
I see a lot of people mentioning Chase Quickpay, Venmo, Paypal and other transfer solutions. Those solutions work OK for person-to-person payments, but for rental payments they can be very dangerous. These solutions generally always favor the payer if there's a dispute. It works fine and well until a tenant charges back 6 months worth of rent.
My recommendation is to use ACH and always have a signed authorization form from your renter stating they authorize you to withdraw from their account. Anything less may not protect you when or if they issue a chargeback request to their bank (or the intermediary like Chase, Venmo, or Paypal).
For tenants that do not have a bank account. Do you really trust a tenant who cannot open a bank account to be responsible enough to pay rent? My experience that if somebody doesn't have a bank account is they are either here illegally or they have so many collections on their record they fear opening one will get garnished.