Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
16y
I have around 40 homes in a spread out area of TX. I have a mgmt acct at a bank with 20 some branches. The tenants seem to like it and deposit their rents directly. I've had zero problems with it in 2 plus years. They don't have to worry about mail, I have no office, it gives them a couple extra days not requiring mail time and I can verify their rent rapidly. Rich
Loveland, CO · Member since 2008 · 1k+ posts · 123 votes
16y
Go for it. But if you're like Rich and me make sure every tenant's rent is different. That way you're not worrying about whose "$850 got deposited, look for the $853 or $856.
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
16y
Frank- good point. I have NINE rents that are each $975 per month. I ask them to put street # on bottom. If one forgets, I have to figure out who it is. It has happened. Rich
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
16y
Mike0h- You've stated this before. I've been doing this a LOOOONNNNGGGGGG time with Zero concerns or problems. I don't have to show up with a gun to collect rents, however my tenants are not gangbangers living in scary areas..
Different strokes for different folks. We'll continue to disagree on this method and just let BP members decide which way they'll pursue. Rich
Investor · Westminster, CO · Member since 2009 · 1k+ posts · 1k+ votes
16y
Section 8, straight into the bank, got them TODAY.
Management companies, two send me checks and two directly deposit into my account. The management companies have a "Pay Rent" button on their website and the tenants can pay on the management website. You can also set up a website to have rent paid and the tenants never know your bank account number. Although MikeOH's tenants may not own a computer or have internet access. But I hand it to MikeOH, someone has to own that kind of rental just like someone has to own the $10,000 a month rent, rentals. As Rich stated, different strokes! We are all making MONEY.
I will admit that I was reluctant to use "Bill Pay" with my bank, but since I have, the time and money I have saved is tremendous. The benefits are many. If the check receiver does not cash the check in 90 days, the money is put back into my account, which has happened a couple of times. I can schedule my payments to coincide with my deposits, etc...
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
16y
I will try the direct deposit with my new tenants, the bank is next door 30 yards away.
Also I assume the long year propertie manager there, so I have no fears therefore.
You can set up a separate savings account that only receives rent. Move the money out as soon as you get it. Then there is nothing in there to steal.
I've got yo point out that you give your bank account number to strangers nearly every day. Every time you write a check to anybody, you are giving them your account number.
Lots of those clerks in stores are somebody's low income tenant. A lot of those people processing your web orders on your credit cards are prisoners in the penal system.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
16y
I'm glad I found this thread. Today is the first of the month, and my newest tenants' rent did not arrive in the mail. I'm in NJ and they're in FL. When I contacted them, they said they must have misunderstood - although they knew the rent was due on the 1st, they thought they had until the 3rd to mail it to NJ.
WHAT?? I explained that 3 days after the rent is due, it's considered late, with a $50 late fee. I just now gave them the account number of one of my business accounts, which never has a balance in it. The money goes in and is immediately moved elsewhere.
The bank assured me it was safe, and since I can monitor it online at any time, I'm giving it a shot.
SFR Investor · Orange County, CA · Member since 2009 · 1k+ posts · 1k+ votes
16y
My condo tenant set up automatic bill pay with her credit union, which mails the rent to my Resident Agent, who then forwards it to me. Our SFR tenant mails a check to my PM who then DD's into my business account. Neither tenant has my home address, mailing address, or bank info.
Investor · Westminster, CO · Member since 2009 · 1k+ posts · 1k+ votes
16y
Mitch
That is correct, NONE of my tenants have my home address. All of my mail sent to my home is to a USPS Post Office Box. All deeds are mailed to my PO box. If a tenant really wanted to find me, they would need to use the County Recorders office to find my home address. But then again, a tenant has never wanted to find my home address.
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
16y
You can use Clearnow for this. They will process everything for a small fee.
If you are worried about them having your account number set up a mirror set of transfer accounts. The transfer accounts can automatically sweep money into their mirror project accounts. The project accounts can then sweep to an overall operating account for the entity.
This allows you to track each project separately and give access to your accountant fairly easily.
SFR Investor · Orange County, CA · Member since 2009 · 1k+ posts · 1k+ votes
16y
Originally posted by Uwe S.:
Okay, but my question is how does direct deposit work in the US? Thanks.
In a nutshell, the payee fills out a form with their banking info (bank name, account number, routing number, etc.) and gives it to the payor. The payor then makes the deposit directly into the payee's account via the Automated Clearing House (ACH). I'm not sure how exactly the payor makes the transfer since I haven't been on that side of the equation. Besides, I prefer receiving! :mrgreen:
Property Manager · Atlanta, GA · Member since 2008 · 51 posts · 61 votes
16y
If you allow your tenants to direct deposit. what do you do when you file eviction on them for non-payment? If you get eviction judgment for rent, late fee and court costs for filing dispo, the tenant then deposits something less than this total in your bank account then you are screwed since you accepted partial payment. In my state accepting partial payment voids the dispossary so you are now out the court costs that you cannot recover and you have to file dispo again for the balance of the money owed.
SFR Investor · Orange County, CA · Member since 2009 · 1k+ posts · 1k+ votes
16y
Originally posted by Jennifer Minge:
If you get eviction judgment for rent, late fee and court costs for filing dispo, the tenant then deposits something less than this total in your bank account then you are screwed since you accepted partial payment.
Very good point!!! At least with a check, e.g., auto bill pay, you have the option of not depositing the check.
SFR Investor · Orange County, CA · Member since 2009 · 1k+ posts · 1k+ votes
16y
Originally posted by Uwe S.:
Thanks Micth for your reply of my inquire.
You're welcome Uwe.
BTW, I asked my property manager how the "send" portion of a DD works. He said a "business specialist" at his bank set up the process for him. Once he has all his payee accounts entered, he simply selects their name, puts in the dollar amount, and the ACH takes care of the rest.
Here's even a cut and paste of what his bank's confirmation page looks like (just like web bill pay):
Schedule ACH Payment - Step 4 of 4
Â
ACH Payment Scheduled!Â
Your payment to Mitch Kronowit (...9XXX) has been successfully scheduled. Payments to this Payee will be processed within 1 business days. Your payment transaction number is 406XXXXXX. To check on the payment’s status, see ACH payment activity.
Â
 Pay To Pay From Send On Deliver By Delivery Method Amount Transaction Number
Â
Owners
Â
Mitch Kronowit (...9XXX) BUSINESS FREE CHK (...5XXX) 7/1/2010 7/2/201 $1,XXX.00 4069XXXXX
Â
Â
Â
Total payments:
$1,XXX.00
Rental Property Investor · Charlotte NC Fort Mill SC Lake Wylie SC, SC · Member since 2009 · 174 posts · 103 votes
16y
I was a little confused when I first read this thread because, to me, 'direct deposit' means the deposit happens electronically--no one actually physically goes to the bank or whatnot. I do not like the idea of giving tenants deposit slips to my accounts at all. I also don't like tenants trying to deposit to my account with just my name--this leaves too much room for error. Also, I'm constantly having to check my account for the deposit. No fun.
Forgive me, but I'm going to sound like a commercial for a moment: I have used true, direct-draft rent payment with ClearNow for several years now, and it's fantastic! It costs $14.95/mo and includes one rent draft; each additional draft is $2. The tenant never sees your account information, and you won't see the tenant's information unless they have you submit their application. Tenants love it because they don't have to think about the rent at all, and the company has begun to participate in credit reporting, which helps tenants build their credit. Each month, I get an email that says the rent deposit was made, with a full breakdown of each tenant and the rental amount and fees involved. The tenant cannot change the amount to be drafted--you set that. The tenant can put a temporary hold on rent drafts, but you are notified immediately by email. Tenants are comfortable with the measure of control they have, and it's a fantastic help for me.
No, I don't work for ClearNow. I do get a break on fees for one month if I refer someone to them, but I don't care about a break on the fee--it's a great way to collect your rent hassle-free.
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
16y
My impulse for this direct deposit is for the 8 unit in Cleveland and maybe the new 6 unit.
PM can receive rents and deposit these direct in bank account (only 30 yard away from building) so no tenant has bank account data.
Actual PM receive rents, then he need 5 days for transfer a little bit too long. But this is old standard with him.