Cash in an envelope, a thick sheaf of well-used bills given in return for a handwritten receipt. No, it won't scale, and it's no fun to deposit, but the firm, full, heavy feel of the envelope in my hand...oh yeah, it just does something for me...
Etransfer from bank is usually my go to. As I scale up, I would find a digital solution with low processing fees. It's 2018 and no reason why you can't leverage technology to streamline processes and enhance productivity.
Btw the cool thing about ACH is it hits your account as soon as the next day AND there are no fees for the tenant and minimal for LL.
I am surprised more folks dont do it - you do need a business account and your business must be approved for x amount of a LOC just to cover rent if something were to happen. But honestly it is so easy and timely :)
@Jess White I use Cash App or Zele. Tenant can make payment using these apps only if they have funds in their account. If they used Zele, then money deposits in my account instantly where as for Cash app, it’s next day. Using it for over two years and very pleased with it. I also collect in cash from two of my older tenants who are not so tech savvy and I don’t take personal check, so either money order or cash. I then deposit it to my business account or to replenish petty cash. Excess funds go to LLC account eventually.
@Jess White there’s nothing better than cash but it’s just not possible for me to collect cash every month. Some of my tenants use Cozy which i encourage on an auto payment. it automaticly adds a late fee if they are late, I make it available for everyone but not everyone uses it. Some have used Venmo, but most make deposits at my bank into the respective properties account.
Cash in an envelope, a thick sheaf of well-used bills given in return for a handwritten receipt. No, it won't scale, and it's no fun to deposit, but the firm, full, heavy feel of the envelope in my hand...oh yeah, it just does something for me...
I have the majority of my tenants snail mail me rent checks. Some of them pay with money orders. I have one tenant that pays cash, so I pick it up. I deposit the checks by scanning them with my bank’s app, which cuts down on trips to the bank.
I started sending all of my tenants an invoice around the 20th of every month. I use quickbooks it allows you to automate the invoices, it will create a new invoice for each tenant every month. I include a self-addressed stamped envelope so all the tenant needs to do is put their check or money order in the envelop and send it back. I use a PO box for them to send the rent to.
I see many people are using a auto-payment method so the tenant and deposit the rent directly in an account. One issue with doing it that way is if you start an eviction all the tenant needs to do is deposit $1 in your account and it will stop the eviction. This is because you accepted rent after starting the eviction. If you use this method make sure you can turn off one of the tenants if you start eviction on them.
@Jess White
Surprised no one has mentioned Zelle. Hits account day of, direct to account, no charge. It’s been great. And if I’m feeling generous, I can remind a tenant by sending them a request. As mentioned, tenants agree in lease. All they need is your associated email address. Only drawback is you must work with a major bank to receive, but I dont think to send.
I started sending all of my tenants an invoice around the 20th of every month. I use quickbooks it allows you to automate the invoices, it will create a new invoice for each tenant every month. I include a self-addressed stamped envelope so all the tenant needs to do is put their check or money order in the envelop and send it back. I use a PO box for them to send the rent to.
I see many people are using a auto-payment method so the tenant and deposit the rent directly in an account. One issue with doing it that way is if you start an eviction all the tenant needs to do is deposit $1 in your account and it will stop the eviction. This is because you accepted rent after starting the eviction. If you use this method make sure you can turn off one of the tenants if you start eviction on them.
In terms of 'what is best', it will depend on what software you use to account for tenant payments after you collect them. If you're not using Property Management software, PLEASE consider getting something.
A low-cost option is one offered by National Tenant Network. I PROMISE your time is better spent driving around collecting rents, filling out deposit slips, and bringing them to the bank. Their software will integrate with your website and the accounting is done automatically when they make their payments, and it hits your bank account in the next day (or so). I have 250 units under ownership / management, and receiving payments is SO much easier than when I owned 92 units under the old-school way. So yes, it's far more scalable, and way more effective too.
i prefer cold hard cash. My experience easier to hide come tax time. All my best tenants pay cash. my personal feeling $800 in cash is real money, when other tenants deposit straight into a account doesnt feel the same. I use all cash rents for gas and groceries.
For all if you taking money via Venmo or people depositing into your bank account — do you not use property management software?
If I was to have a bunch of tenants just deposit slip money to my bank account or PayPal me I’d then have to spend a ton of time taking that payment data and recording it manually to everyone’s ledger.
No thanks. That doesn’t scale.
For anyone just starting, get property management software with built in intergrated payment options and use it. You’ll be happy you did.
@Jess White We have an account set up at a local bank with plenty of branches in the area.
The tenants are given an account number to go make the deposit. The account is set for cash only - no checks. The tenant can note their name or address on the deposit. They are also supposed to text me a photo of the receipt.