rent collection system based on least likely to loose my rent?

5 Replies

Some here may have read the Erentpayments blow up thread here.

https://www.biggerpockets.com/forums/52/topics/499...

I'm suggesting discussing a better / best rent processor be its own thread.  Other threads here focused on cheapest,,, today cheap no longer interests me.  LOL

To how to choose a new processor that for me now places at the TOP of the criteria list:

- lease likely to loose the rent taken from the tenants bank,,, but doesn't make it to my bank.?   (the erent scenario)

More discussion:

- I need a list of the B-I-G-E-S-T rent processors by transactions and by dollar volume?

- How do I ask for their insurance policy for such events?

- How do I ask them to show their disaster plan should an erent event happen?

- What is their cash flight time, min, typical and max?

- who owns the company if its owned by a larger co. What will they do in the case of a huge blow up and cash short fall?

- At this point you noticed I didn't even ask about fees. IMHO at $10k loss I've discovered that it doesn't mater what a service costs, its what it will cost you in the event of a failure. I care more about avoiding the loss then focusing on transaction fee comparison.

The rent collection processors can seize this once in a life time op and offer a service with a fee based guarrantee of no lost funds (an insurance premium in effect), I'd pay that fee and not even ask how much. I'm not in the least interested in free, I want zero losses,,, and a distant second fast xfer time (sub 3 day)!

IMHO Erent has foist a new litmus test on rent collection services:

- How will the providor prevent any lost funds?

- When (not if) there's a system failure how fast will I get the stuck funds?

- Do they have plan B (deep pockets / reserves)?

- Do they have plan C an effective insurance to cover losses even if there's fraud somewhere in the cash path? This a bigger issue than we all would have guesses in my view.

Answers to my questions?   What have you done and why?

The fall out from abruptly turning off the erent accounts forcing tenants to write checks, ACH, paypal, bill pay has been chaos for both the tenants and our attempting to track rent rolls with many different paths rent is now coming in for Nov...

I take applications and do credit check / screening via service I won't name (the owner is in the same REIA as I'm in and am glad to support their company) and they are working on integrating a 3rd party $$ xfer processor. At first they where working with a processor that could do same day xfer best case,,, that fell through. Now they are working on another big name that offers the same 3 day xfer. BUT a big plus vs erent (and others ??) no lumping of rents together into one ACH into my account. Each rent payment will come through separately and with notes who is the payer. This will be a big improvement over erent when they bring this to market in a few months.

Mean time I'm committed to doing manual rent collections until this service is up and available.

I could immediately choose one of the rent collection services but IMHO there's been no good analysis of a list of choices, pros / cons here on BP.  Other sites have done some comparisons but none that are in depth on BP (that I found).

Good luck folks!

@Curt Smith   Forget "processors".  Talk to your regular bank about the business services they offer.  Many of them have accounts that allow you to do the kinds of transactions you need to do.

Originally posted by @Curt Smith :

Some here may have read the Erentpayments blow up thread here.

https://www.biggerpockets.com/forums/52/topics/499...

I'm suggesting discussing a better / best rent processor be its own thread.  Other threads here focused on cheapest,,, today cheap no longer interests me.  LOL

To how to choose a new processor that for me now places at the TOP of the criteria list:

- lease likely to loose the rent taken from the tenants bank,,, but doesn't make it to my bank.?   (the erent scenario)

More discussion:

- I need a list of the B-I-G-E-S-T rent processors by transactions and by dollar volume?

- How do I ask for their insurance policy for such events?

- How do I ask them to show their disaster plan should an erent event happen?

- What is their cash flight time, min, typical and max?

- who owns the company if its owned by a larger co. What will they do in the case of a huge blow up and cash short fall?

- At this point you noticed I didn't even ask about fees. IMHO at $10k loss I've discovered that it doesn't mater what a service costs, its what it will cost you in the event of a failure. I care more about avoiding the loss then focusing on transaction fee comparison.

The rent collection processors can seize this once in a life time op and offer a service with a fee based guarrantee of no lost funds (an insurance premium in effect), I'd pay that fee and not even ask how much. I'm not in the least interested in free, I want zero losses,,, and a distant second fast xfer time (sub 3 day)!

IMHO Erent has foist a new litmus test on rent collection services:

- How will the providor prevent any lost funds?

- When (not if) there's a system failure how fast will I get the stuck funds?

- Do they have plan B (deep pockets / reserves)?

- Do they have plan C an effective insurance to cover losses even if there's fraud somewhere in the cash path? This a bigger issue than we all would have guesses in my view.

Answers to my questions?   What have you done and why?

 Personally I would think about a money sending system used by actual banks, not some company created to collect rent

Zelle?

Hi guys, have you checked into zelle (etc) at your bank?  These are not available to business accounts. Yup True!  Only personal accounts.

I have 38 tenants spread all over GA, no one bank branch serves them all.  Further they have day jobs and can't walk into a bank branch to make a direct deposit.  

Wells fargo has a deposit only card for business (only) accounts which I've sent several un-banked tenants.  The deposit card allows them to make ATM deposits 24x7.   But this still requires them to get into a car to pay rent.

Paypal, only when you say "its a friend" never say its a business will xfer free.  IE its not really a business service....

Unless you've run a larger (38 rentals is larger than small) rental business, with a range of un-banked, small town tenants no bank account, tenants with banks but varied banks, some with banks but no check books but can do bill pay you won't understand the scope of this problem.

Try to do rent rolls with 38 folks all paying via DIFFERENT channels, means, times, etc is a nightmare and very error prone and labor intensive.   Funneling all rents through one 3rd party processor, who offers reports etc is the only way to reduce labor and hassle in collecting rent from a diverse group of tenants. 

Folks with 5 rentals that are all near by need to feel lucky that their tenants just drop off checks on the 1st to their door step (etc)!   LOL

OBTW folks who don't run a rental business also don't realize that being paid with money orders is a nightmare too.  You can't loose them and our smart phone bank apps won't deposit them via the phone.  Money orders have to be run to the bank deposit window.  Never deposit money orders via the ATM machine...  So many problems in collecting rent that never get talked about in my view.

Originally posted by @Curt Smith :

Hi guys, have you checked into zelle (etc) at your bank?  These are not available to business accounts. Yup True!  Only personal accounts.

I have 38 tenants spread all over GA, no one bank branch serves them all.  Further they have day jobs and can't walk into a bank branch to make a direct deposit.  

Wells fargo has a deposit only card for business (only) accounts which I've sent several un-banked tenants.  The deposit card allows them to make ATM deposits 24x7.   But this still requires them to get into a car to pay rent.

Paypal, only when you say "its a friend" never say its a business will xfer free.  IE its not really a business service....

Unless you've run a larger (38 rentals is larger than small) rental business, with a range of un-banked, small town tenants no bank account, tenants with banks but varied banks, some with banks but no check books but can do bill pay you won't understand the scope of this problem.

Try to do rent rolls with 38 folks all paying via DIFFERENT channels, means, times, etc is a nightmare and very error prone and labor intensive.   Funneling all rents through one 3rd party processor, who offers reports etc is the only way to reduce labor and hassle in collecting rent from a diverse group of tenants. 

Folks with 5 rentals that are all near by need to feel lucky that their tenants just drop off checks on the 1st to their door step (etc)!   LOL

OBTW folks who don't run a rental business also don't realize that being paid with money orders is a nightmare too.  You can't loose them and our smart phone bank apps won't deposit them via the phone.  Money orders have to be run to the bank deposit window.  Never deposit money orders via the ATM machine...  So many problems in collecting rent that never get talked about in my view.

 We pay our employees with zelle from  a business account 

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