Best Practice For Collecting Rent
Hello BiggerPockets,
I have a question in regards to collecting rent... I own a handful of rentals and find myself wasting time between the 1st-5th of every month collecting and depositing rent. We've always had the tenants mail or drop off rent checks to my real estate office which has been "okay" but I still find myself wasting an hour each month dealing with mobile deposits or driving to the bank. Any recommendations to make this process more streamlined?
You may wish to consider going to an online rent collection system. I use Rentec Direct. Each tenant has an online portal on the Internet. The tenant logs on and initiates an electronic funds transfer from their bank account to my bank account. Funds clear within 6 or 7 days after the tenant initiates the transfer. It has worked well for me for quite some time.
There are several companies that assist landlords in receiving rent by electronic funds transfer. Just search BiggerPockets. Find the one that works best for your.
@Kevin Howard I recommend testing out some property management software companies to see which one would be the best fit for your rental business.
Ever since I've been using a property management software to manage my rentals, it's been so much easier. My tenants have auto-pay set up, so there's little for them to worry about and I see fewer late payments on my end. Plus no more wasting time at the bank, so that's been good too.
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#2 Managing Your Property Contributor
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You can also have the tenants deposit the rent at your bank instead of your dropping at your office.
We charge a $10 Processing Fee for mailed rent, $3 if paid at the bank and $0 if paid online - encouraging the preferred behavior:)
Awesome! Thank you for the responses :)
I like cozy
Very easy IMO
Originally posted by @Drew Sygit:You can also have the tenants deposit the rent at your bank instead of your dropping at your office.
We charge a $10 Processing Fee for mailed rent, $3 if paid at the bank and $0 if paid online - encouraging the preferred behavior:)
How do you deal with people making partial payments at your bank?
Oh man, don't waste your time doing all of that! Get them all set up on Cozy.com/Apartments.com it's so simple! I'd (physical) mail and email them now that you'll be making this change in 30 (or 60) days and then charge them an additional $25 for tenants who still insist on sending checks. Good luck!
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#2 Managing Your Property Contributor
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@Michael Plante If eviction issue, we just return the funds ASAP. Otherwise, not really a problem in Michigan.
CashApp. Simple, only takes a debit card to sign up, and clears faster than Cozy.
Transition all of them to cozy.co and have them set up a direct deposit. Give them an incentive to set it up online like a $50 discount to the 1st online payment
@Kevin Howard I began using Innago (I noticed they just started advertising on BP) awhile ago and really like it. It sends them an auto email on the first of the month with a big "Pay Now" button, and a reminder on the 5th (option) if late. Its on auto pilot.
Since it hasn't been mentioned I use TenantCloud, and have like how it streamlines maintenance request and allowed me to track appliances. I had used Cozy years ago, but moved to TC and haven't looked back.
We currently use Zillow. It's sometimes a bit clunky, and takes a few days to process through the bank using their system, but is free and tracks the payments pretty well. 5 doors for us. Expanding to 17 total soon, so we'll see if we need to upgrade as well.
@Kevin Howard I own 3 multi families and use Venmo. It’s a great tool and you don’t have to spend any time at banks. Quick and easy.
@Kevin Howard we offer online payments, have a few dropboxes located at our multifamily properties, and then implementing strict late fees. I don't do any in person pickups so I wait until the 2nd to pick up all of it at one time and make one trip to the bank. Only ever had to charge one tenant late fees so far.
You have to go online. Huge Time Saver. We go through Apartments.com
I also use cozy, its very tenant friendly !
@Kevin Howard check out some software for property manegement and rent collection. In 2021 there really is no reason for anyone to be stepping foot into a brick and mortar Bank
@Kevin Howard
I used to do the manual checks, hut I started traveling more so this became problematic. Now I include in my lease rhat all payments are electronic via either cash app or venmo. Much better as I do not have to wait to get home to deposit checks.