Hello BiggerPockets !!
I am looking for and getting into my first real deal through leveraging my primary residence to buy a small multi family property. I am wondering about the payments when getting my first tenants. Should I set up a new Venmo or cashapp account specifically for my RE investments? Or is my personal account acceptable? Also considering going forward and having many properties in the coming years, is it a sustainable source to get payments through with many properties or should I use something like rentredi or Cozy to limit confusion with my records? Any other apps or suggestions would be greatly appreciated!
Thanks and I’m looking forward to some feedback!
Here's what I do:
Each multifamily building I have has its own bank account. It's written into the lease that tenants must deposit their rents into that particular account (either by online bank transfer or by walking in a check/cash); I do not collect rents directly, nor would I if anyone asked. Systems don't work if there are any exceptions. Each tenant living in a building has their own unique rent amount, so even if they do not leave a notation with the rent payment, I know whom paid the rent based on the amount alone. I get an email alert each time a deposit is made.
I prefer not to use any third-party vendors (Zelle, etc.) because firstly, that creates another link in the chain that can break down between the tenant's deposit and my bank account. There are a few threads here on BP where the vendor has a system crash or technical glitch and transfers are delayed. In a perfect situation, the payment will still be delayed (even if by hours) using this additional system.
And secondly, many of these vendors have "clawback" provisions where, in their terms of service, you give them permission to go back into your account - even weeks after the fact - and reverse a deposit that was made by your tenant. You can search BP for these unfortunate threads, too - where the landlord is left without his/her rent. Oftentimes, the terms of service you agree to gives you very little, if any, due process. Beware!
My system is simple, allows for tenants to pay through multiple means, and does not cost me anything extra.
Great!! Thanks so much for your response. I will be going to my bank tomorrow to have them make other accounts for the tenants.