Winchester, VA · Member since 2015 · 57 posts · 9 votes
Hi, we are new real estate investors. We just purchased our first property. The tenants are accustomed to paying their rent to the old owner in cash. This will not work for us. We would like them to use some form of electronic payment either direct deposit or Cozy.co. One of the tenants would like to mail us money orders. Her concern is that she is a new renter and she would like to be able to keep track of her payments. What arguments would you use to persuade her to use electronic payments?
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
7y
Not only does cozy keep track of rental payments, it gives tenants the option of reporting them to the credit bureaus, thus building the credit score for a new renter. That should help convince her.
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
7y
@Elford Stephens. If these are middle class or above tenants this is probably fine, but if it’s lower class or lower income tenants this probably won’t work.
I would never accept cash but a money order should be acceptable. Obviously it’s nicer pay online but that’s not always possible.
If that’s not possible I suggest just having a local
I use this as an additional screening method. My potential tenant MUST have a bank account and allow an ACH from my bank. If they don't have a bank account they don;t qualify. Why? Because 1- I don't chase money. 2- If they don;t have a bank account it is almost always because they bounced checks and haven't paid the bank back yet. 3- If they don't have a bank account they probably are more transient and leave in the middle of the night.
Screen well, then you don;t have to worry about evictions. I'm am doing only my second eviction in 18 years of someone I put into my houses. Yes I have evicted several tenants that I inherited when buying a property but I knew that going in and accounted for that in the price.
Most landlords chase money all the time and don;t value the cost of their time. I tell my tenants that if they bounce the ACH they have 48 hours to track me down and get me a cashier check or the eviction letter goes out and then there is n turning back. I don;t chase them. I tell them I don;t pay people to live in my properties so I am the fist bill they should pay before cars, utilities, etc. Or they won't have to worry about it because they will be living in their car. Just business. If they believe your they don;t test you! Just like your kids but you better be willing to make an example out of one to prove to the others. It only took me once and I use that story with each new renter as they sign their doc's.
Randy,
I am attempting emulate your payment principles in my business. I understand that screening tenants is important I will hope to be very scrutinizing
I highly recommend cozy and putting it in the lease. Cozy has several advantages as it can report payment to credit agency building your tenant credit score. Also, great functionality to store/share documents with your tenants like leases, move in lead paint addendum etc. it has one of the best tools that I have found to create a system.
I have decided to talk to this tenant about it tomorrow.
Raleigh, NC · Member since 2017 · 347 posts · 94 votes
7y
@Mindy Jensen if they do that, paypal takes a cut. To avoid the fee, they have to do a "friend to friend" transfer which voids any recourse they have for disputing the charge