Hello My Oklahoma Investor,
What system have you guys been using to collect rent from tenants? I am putting my Lease together and I am not sure if I give my personal address, create a PO BOX or use an online tool. Any advice will be very much appreciated.
Online makes it easier for many tenants to pay, and easier for you. PO Box is a good idea too. I would definitely not use your personal address, though.
I use Venmo. It is so easy and free.
I personally do not want any tenants knowing my home address. I'd opt for the PO BOX, but after we had a "lost" letter once, we have tried to avoid having tenants mail checks.
If they are handy with simple technology - use Venmo or CashApp or direct bank to bank transfers (I'd set a separate bank account up for the property). We currently utilize these technologies and it's very convenient and easy for everyone involved.
I have collected rent on some properties in person on the 1st of the month, but it's time consuming and inconvenient to set up collection times. I would avoid this.
Another option, create the second bank account - and have them deposit a check (or cash) directly into the account each month.
I 2nd venmo @John Kunick I just started it with my new tenant, I love it! Venmo saves me so much time.
A friend of mine has a checking account that their tenant deposits into, the account is only for the rent, it's not connected with anything else.
The management company I work for utilizes a payment software, rent cafe. The renter sets it up with their routing and check number, and they can set it for automatic payments. The money is then transferred to my ownership.
I have started using Cozy for online payments, its a bit slow on the transfer, approximately 5-7 days before it transfers into your account. Definitely dont give out your personal address...ever.
So, I will modify my original post about Venmo. First, I strongly encourage my tenants to use Venmo and to pay their rent that way. I get a cash register sound on my iPhone when someone pays me via Venmo. I love it! I then just hit "Transfer to Bank" and it literally is there within 24 hours. I also use Venmo to pay some contractors and have had contractors sign up for Venmo and they love the ease of use and instant payment capabilities.
When do I not use Venmo? If I have a new tenant that I am wanting to monitor them for the first few months, I will make arrangements to pick up their rent. I don't let them bring me the rent unless we meet at a neutral site. But, most of the time I ask to pick up the rent at the property so I can do a quick inspection and just check in with them. Once a few months go by and I feel confident that they are meeting/exceeding expectations, then I ask them to start paying with Venmo.
I do have a couple of tenants who are not tech savvy so I don't require them to pay with Venmo. But, I do make them either meet me and collect rent or I give them a deposit slip and ask them to deposit their rent into my bank and communicate with me when that is done. I do have a separate account set up for all of my rental properties.
BTW, funny story. My wife and I were on nice tropical beach in January just reading books, sipping adult beverages and enjoying our vacation. In the span of about ten minutes, I got the cash register sound three times when three tenants paid rent. My wife wasn't sure what the sound was for so when I explained it to her, she was impressed and just said "this is the life... We get to sit on a beach and get paid!"
WOW, Thanks a lot for the feedback everyone!!!
@John Kunick Great suggestion, a vetting period for new tenants, I didn't think of that. Venmo discourages utilizing the app for selling items to strangers, as the transaction can be cancelled thus allowing the scammer to get the item and never pay. Although with a rental you know where to find them, lol. Venmo customer service isn't great either, just playing Devil's Advocate. I still use it and haven't had a problem yet, but there are articles on alternatives. I get a txt when I receive funds, it's great!
@Steve Hodgdon do you also use erentpayment for your Tenant screening?
@Dylan B. Do you use Cozy for Tenant screening?
The payment method should be stated in the Lease right? This is what I am planning to use. Should I give my tenant options such as:
2.RENT. The monthly rent for the term hereof is the sum of $[________] payable in full on the 1st day of each month of the term. Rent may be paid:
(a) Electronically from your bank account by ACH transfer through xxxxxxxxxxxx. Landlord’s email address for xxxxxxxx transfers is ______________;
b) By depositing a check directly into the Bank of #$$##$ account XXXXXXX Routing number
I second @Dylan B. for Cozy. We use it for rent collection and tenant screening. Its easy and the tenants really enjoy the ease of online payments (both using check or credit/debit card). They have recently started offering renters' insurance as well, although I'm not as familiar with it.
If you can get them to use online from the onset it's much better. I bank with Chase and use Chase Quickpay. It is part of a larger network of national banks and its free to send and accept payments. Very easy to use if they already have online accounts with other banks.
@Eve Oliver Re tenant screening... We also lend money so we're able to get credit reports and TLO.
A tip some may not know, many courts have a separate online data base for unlawful detainer actions. Sometimes with civil, but Orange County CA has a different list. Delays in updating credit and public record data put the credit bureaus 3 months behind.
@Steve Hodgdon Thanks very good information. For Oklahoma, I believe we can check if someone has any type of unlawful record at OSCN.
WE have found SimpleScreening.com to be very helpful. We have tenant fill out application (eight pages) and pay $40 (what it costs to do Simplescreening.com background and credit check. IF they are not willing to pay $40 then that tells me they are not that interested. This acts as a good filter. Eve, anything that you can find on OSCN will show up on SS plus lots more. SS is much more comprehensive.
Can someone explain Cozy and erentpayment? I'm not familiar.
@Eve Oliver have the tenants set up automatic bill pay with their bank. They the bank mails you a check on their behalf. The only "gotcha" is that mail times are usually about 5 days. So, if you have good tenants that occasionally run tight on cash and they get paid on the 1st you may have to adjust your grace period slightly.
If you rent in low income areas -- where tenants often don't use bank accounts -- try a service like Pay Near Me that lets them pay you from 7/11 (or the like) with a cash deposit.
If you are close to your properties, why not stop by and pick up the rent? This allows you a great opportunity to quickly check on the properties and connect with the tenants to ensure everything is running smoothly. I have a few properties that I live 15-20 miles from, and typically just make a route once a month to collect on them.
Most online tools are going to charge you a % or transaction fee for their services.