Do I have a problem tenant or am I just being paranoid?

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Do I have a problem tenant or am I just being paranoid?

Suzanne O'Brien

Rental Property Investor · Jersey Shore, NJ · Member since 2014 · 5 posts · 1 vote

Hi All! I'm new to being a landlord. Used a realtor friend of my husbands and picked a tenant that came recommended by the realtor. He did fill out an application provide all of the necessary paperwork and reference. He was really quick to secure the rental since there was a lot of competition and gave us the deposit and first months rent in November. My husband and I talked to him in Dec about ACH payments and that we wanted rent electronically, he said he would look into in on his side with his bank. I heard from him twice regarding that, he initiated the communication, but it was like, I forgot and I didn't have a chance to do this yet. He moved in Feb 1. By mid Feb I decided to use Cozy and communicated this to him, although he was very rushed/busy. I invited him and he responded via email that he would set it up. He still has not set it up. I send a new invitation every 3 days. Are these signs of problems to come or am I just being paranoid? What are my options if I don't receive the rent? It is written in the contract that there will be a late fee after the 5th, however I don't want to deal with him every month trying to mail a check or telling me he has some problem. Any tips or advice in a similar situation would be greatly appreciated!

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Russell BrazilBusiness Member

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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

7y

As a business owner, you want to make it easy for your tenants to pay you rent how they want to pay. You need to accept as many forms of payment as possible. Check, venmo, paypal, cozy, google pay etc. If you try to force a particular form of payment on a tenant, you will just set yourself up for failure or frustration.

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7y
As a business owner, you want to make it easy for your tenants to pay you rent how they want to pay. You need to accept as many forms of payment as possible. Check, venmo, paypal, cozy, google pay etc. If you try to force a particular form of payment on a tenant, you will just set yourself up for failure or frustration.
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Kelly N.
Investor · SE, MI · Member since 2013 · 1k+ posts · 461 votes
7y
My guess is that he will set up his Cozy account when he pays rent. If he hasn't paid on the 5th, add the late fee and send a pay or quit notice, following the rules for your location precisely.
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Jason G.Pro Member
Rental Property Investor · Long Island, NY · Member since 2015 · 434 posts · 495 votes
7y
Originally posted by @Suzanne O'Brien:

Hi All! I'm new to being a landlord. Used a realtor friend of my husbands and picked a tenant that came recommended by the realtor. He did fill out an application provide all of the necessary paperwork and reference. He was really quick to secure the rental since there was a lot of competition and gave us the deposit and first months rent in November. My husband and I talked to him in Dec about ACH payments and that we wanted rent electronically, he said he would look into in on his side with his bank. I heard from him twice regarding that, he initiated the communication, but it was like, I forgot and I didn't have a chance to do this yet. He moved in Feb 1. By mid Feb I decided to use Cozy and communicated this to him, although he was very rushed/busy. I invited him and he responded via email that he would set it up. He still has not set it up. I send a new invitation every 3 days. Are these signs of problems to come or am I just being paranoid? What are my options if I don't receive the rent? It is written in the contract that there will be a late fee after the 5th, however I don't want to deal with him every month trying to mail a check or telling me he has some problem. Any tips or advice in a similar situation would be greatly appreciated!
You are operating a business and the terms have been set in the lease. Don't negotiate with the tenant. If the rent isn't received send the tenant a notice that the rent is late and a late fee is now owed. If they still do not pay, then you give them notice to pay or quit, and after that file for eviction.
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
7y
@Suzanne O'Brien, the rent isn't late (yet) so don't worry over a problem that hasn't occurred.
I agree with @Russell Brazil see if there is an easier way for him to get you your rent. Zelle is another option.
Anything short of him mailing you a check should be OK.
At the end of the day you would like your rent payment in your bank account without a lot of fees.
Most of my tenants go to one of my banks branches and deposit right into my account. They don't get charged, I don't get charged and they get a receipt. I can look online an see who has paid because they put their name on the deposit slip. Many of the big banks wont accept cash from someone that doesn't own the account, but the other banks still do.
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Chuck H.
Rental Property Investor · Houston, TX · Member since 2017 · 40 posts · 20 votes
7y
I wouldn't force electronic payment. Some people just don't like it. Imagine going into a restaurant and the waitress demanding you pay her in nickels every 5 minutes. Then getting paranoid half way through the meal that you're not going to pay. Accept check, money order, or ACH.
2 Reply
Shane H.
Investor · Spokane Valley, WA · Member since 2014 · 175 posts · 94 votes
7y
It is perfectly normal to have an added sense of worry with any new tenant. But in this case I wouldn't sweat it so much. Yes, you may prefer Cozy over other forms of payment. But ultimately that is a preference and as long as he pays then you shouldn't fret over it too much. Perhaps after he pays a few months you could over a $5 monthly discount to use Cozy if it's that important to you.
Now if he tries to use Cozy as an excuse for being late, then i'd likely say tough cookie. Or if you do grant a late fee waiver, let him know it is a one time courtesy only and not due to the payment method confusion. I'm sure you gave him multiple methods to pay rent, so not being able to get one method to work is not an acceptable excuse to not utilize ANY method to pay.
Good luck, i'm sure it'll turn out just fine =)
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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
7y
No reason to be paranoid. You are simply in the beginning of your tenant training program.
You have given sufficient warning, he knows rent is due on the 1st. Leave it to him to figure out. If you do not receive his rent by midnight on the 1st you immediately issue the pay or quit notice first thing in the morning on the 2nd. If not received by the 5th you apply the late fee and proceed to evict if necessary.
New tenants need to be trained. The last thing you want to do is cut them any slack early into the lease. Issue the pay or quit notice immediately and wait for him to contact you to discuss the issue.
If you want things done your way never waver, lay down the law early.
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Account Closed
Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
7y
Problem tenant? Easy now. Give the guy a chance to screw it up before you jump to that conclusion. Also, as far as problems go, this is not much of a problem in my view.
I agree with Russell and Thomas. Best to be flexible and also best to set the expectation and stick to it. The trick is deciding where to draw your lines. I've found I've needed to draw my lines with what makes sense, not necessarily where I personally prefer to have them drawn! This is a people business. People are messy.
You're fine for now. Get back when they don't pay. Or they damage the property. Or they don't pay, damage the property and won't leave.
Some landlords who charge late fees love tenants that pay late - lol. I do not charge late fees and hate when tenants pay late. Maybe I should change me instead of thinking I can change others?
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Brian Ellis
Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
7y
Cozy takes about a week before the bank accounts are linked through ACH, keep that in mind
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Carey Nelson
Rental Property Investor · Seattle, WA · Member since 2018 · 4 posts · 6 votes
7y
Hi Suzanne
If I have a new tenant that is not paying on time for their first rent payment I call them to find out why and remind them of the late fees that will be assessed. That way I can assess whether it's a sketchy answer or a legitimate problem. It's important to keep communication open and clarify expectations. A tenant may not be specifically planning to burn you on paying rent but may have decided it's not their top priority that month and a few days late will be OK. A personal phone call from the landlord can help them get their priorities straight. Remember that they agreed to your lease terms in order to rent your property and you are simply enforcing the lease you both agreed to. In seven years of being a landlord with multiple properties I've only received late rent from one tenant twice and It's not because I'm an intimidating guy. If he does pay late and continues to pay late you can issue a pay or vacate notice and then file for eviction. Don't get too far ahead of things though. Just set the tone early on that it's not acceptable and follow the terms of your lease to deal with the situation. Friendly but firm is all it should take.
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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
7y
"Cozy takes about a week before the bank accounts are linked"
That is something that the tenants need to keep in mind. The money must be in the landlords account by the end of day on the 1st. If not it is late and a pay or quit is issued.
If you want good tenants they require strict training. Otherwise they train you.
1 Reply
Brendon Grover
Real Estate Agent · PA · Member since 2017 · 63 posts · 28 votes
7y
Just starting out I wouldn't create more problems by being picky on how you will accept rent. At the end of the month the most important thing is the cash flow you receive from the property right? Being more lenient on the forms of payment is ideal but ultimately what you say is required. One question to clear the air with your tenant may be to reach out to them and ask what method would be easier for them to catch up on rent until you begin the regular scheme.
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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
7y
"I can assess whether it's a sketchy answer or a legitimate problem. It's important to keep communication open and clarify expectations."
The message that is sent to the tenant is always that the reason, sketchy or legitimate, does not allow them to pay their rent late. All reasons are only excuses. My new tenants are made clear of this when I screen.
When dealing with new inherited tenants a tenant will be very quick to give a excuse. My approach is always to stop them before they have a chance to explain and tell them that their personal life is none of my business. I expect cash by the end of the day. I make it clear going forward that late rent is never tolerated and I do not keep tenants that pay late.
Not surprisingly late rent payment is never a problem for me.
1 Reply
Josue Vargas
Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes
7y
Is it in the lease/contract the methods of rent payments to you? If not, and you are receiving payment per the terms (not late), then I don't see how you can obligate him to adhere to your preferred methods. From the description in your post, it might be true that he is very busy. I get why you want to use Cozy and all the electronic means. He might as well think that "this landlord keeps bugging me while I'm in compliance with the terms and I don't have time for this stuff".
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Josue Vargas
Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes
7y
Originally posted by @Thomas S.:

"Cozy takes about a week before the bank accounts are linked"
That is something that the tenants need to keep in mind. The money must be in the landlords account by the end of day on the 1st. If not it is late and a pay or quit is issued.
If you want good tenants they require strict training. Otherwise they train you.
Isn't Cozy send confirmation/receipt of the payment made on the day it was actually done? One thing is having funds available vs in transit. Yes it will take few days, but the transfer have been initiated. I think is not different from other electronic means/methods.
1 Reply
Wendy Lavana
Rental Property Investor · Miami/Jacksonville Fl · Member since 2014 · 75 posts · 41 votes
7y
No sense worrying about something that hasn't yet happened. He'll probably set up his account with Cozy when he goes about paying rent. If he hasn't paid by the due date, post a 3 DAY NOTICE and proceed as required. In the mean time it doesn't hurt to read up on the eviction process in your state/county, you want to make sure you post the correct notice, with the correct information and so forth. When dealing with the courts and savvy tenants, the devil is in the details.
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Jill F.
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
7y
My lease specifies the requirement for online rent payment. Most people like it. The rest do come around and comply. I cheerfully accept complaints with a shrug; online is convenient for me-- in Buildium all the accounting entries are automatic. It's great. I'm about to set up paynearme so the whiners can go pay cash at 7-11 (for $3.99 instead of $.50) now that Buildium has it integrated into accounting package.
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Megan Galane
Investor · Clearwater, FL · Member since 2015 · 2 posts · 0 votes
7y
@Suzanne O'Brien give him a call and let him know you want to make sure he has it all set up so you can start off on a great start. I find email is a hard form of communication with tenants.
I learned with my first rental that tenants are very used to numb landlords and when I show I care that they have it all handled they appreciate it so much! My tenants thank me for living in my house. It’s a great relationship by just smiling on the phone and making sure they understand what I want and using clear (nice) communication from the start.
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Michinori Kaneko
Rental Property Investor · NY · Member since 2018 · 571 posts · 332 votes
7y
i think receiving checks are better than not receiving anything. You can deposit checks via your smart phone nowadays with your banks application, so its not that much of a hassle. Remember, tenants are your customers, and without a customer you have no business. Wouldn't you have a paying tenant than one that doesn't pay just because you want a little convenience in how they pay?
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Michinori Kaneko
Rental Property Investor · NY · Member since 2018 · 571 posts · 332 votes
7y
also, if it bother you so much, maybe you can actually visit him/her. you can speak directly, and even show them how to setup the application on their phone and how to send payments. this way you can have a good direct relationship and maybe even get what you want.
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
7y
@Suzanne O'Brien as the old saying goes, just because you are paranoid doesn't mean people aren't following you....
When it comes to on-time rent payment, even after 15 years, I am intense with tenants about it. Most my tenants are on Cozy. One is clinging to checks despite many attempts to convert him. That will be fixed at next lease renewal. Cozy can take a few days to set up, but keep in mind Cozy will show "pending" for the invite even if they are in the process of setting it up.
There is a balance between stalking your tenant and sending friendly reminders. I had an identical situation, with a new tenant that moved in February 1 and had paid February rent. I told them in January to setup Cozy for March payment. I sent three reminders through February, each time being told "I will work on it". They finally got it setup a couple days ago and payments are coming out for March. Ultimately people are busy and since rent wasn't due until the 1st, it was not high on their priority list.
The nice thing about Cozy is you can register off line payments and add late fees. Off line payments are great for if they pay by check. Late fee is nice for if the payment registers after the 5th. You can add the late fee on and it will show on their account until paid. Late fees are a good motivation to pay on time.
Also on Cozy keep in mind there is "rent started" and "rent received". Started is when it comes out of their account and received is when the landlord gets it. If you don't pay for fast receipt, it can take a few days to receive. We use the "rent started" date for payment date, but others use "rent received". If you are going to use the received date, the tenant needs make the payment a week ahead to make sure it is received by the first. They need to be told that, because tenants assume the day the money leaves their account is the day you get it, like every other online bill pay.
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Suzanne O'Brien
OP
Rental Property Investor · Jersey Shore, NJ · Member since 2014 · 5 posts · 1 vote
7y
Thank you for all the great feedback! He did accept the cozy invitation last night, but has not added a payment account yet. @Russell Brazil alternate methods were discussed, he said he would look into it but almost 2 months passed with no feedback, so I decided to use cozy. @John Underwood that is an option I would be ok with as well and we did discuss this but my preference is electronic so there is no excuse regarding banks being closed or being too busy to get there.
@Jason G. right, since the lease specifically said ACH he should have brought it up at that point if it was a problem.
As @Carey Nelson said I feel it’s just not a priority for him right now. @Account Closed, thanks I need to keep in mind that I can’t expect everyone to do what I would do if I was the tenant.
I'm sure we will work it out after this first month. Obviously the cozy payment is not going to go through by Tuesday at this point so if he doesn't contact me today to figure out another means of payment I will call him tomorrow to remind him of the late fee.
Thanks everyone!
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Christopher Lombardi
Developer · Point Pleasant Beach, NJ · Member since 2015 · 303 posts · 216 votes
7y
@Suzanne O'Brien, i would always recommend a late fee after the 5th as well as a daily late fee from the 5th on. This way if they can't get it to you by the fifth they dont feel like they have all the time in the world to get it in. As for your options, I wouldn't worry yet. See what happens this month and if he pays rent by check. If not, let him know on the 4th that he has one more day before the late fee is applied. If he doesnt pay by the fifth, put a 3 day notice to quit on his door basically saying he has 3 days to move out or pay rent and late fee or you will file eviction. If 3 days go by, go to the courthouse to file. With that said, see what happens this first month. There are lots of people who just aren't computer people and would rather pay by check. Good luck to you.
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Matthew Irish-JonesBusiness Member
Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
7y
@Suzanne O'Brien
We lay out as many forms of rent as possible for our tenants. Ease of payment is crucial for them and for us.
Although I would prefer all tenants pay electronically, some tenants want to write a check, others don’t trust computers or whatever.
I would figure out 3/4 ways of paying rent that is acceptable before hand, print them out with directions and give it to your tenant. We do this in addition to the lease, as collecting rent is pretty much the most important thing to establish right off the bat.
I also highlight the benefits of the form of rent I prefer to try to get the tenant to see what option makes both our lives easiest.
Either way this is a separate form that is delivered and gone over in detail at move in date so we don’t have any confusion.
Even if you have already started your relationship it is not too late to print up a form and go deliver it to him.
Then everybody is clear on how they can and cannot pay rent.
Good luck
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Tobias Ortega
Member since 2019 · 5 posts · 1 vote
7y
I agree with having multiple forms of payment. Technology can add convenience to our lives, but not everyone embraces it. I, personally, check my business and investments regularly on my phone (more often than I care to admit) but I pay my utilities with a check in the mail. As long as the tenant pays is the bottom line.
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