Nuts & Bolts: Collecting Rent

I look forward to the first of the month every month. "Rent is due" is no longer a term that I dread, but look forward to with the glee of a child on Christmas Eve. How a landlord, property manager, owner collects rent can set the tone for future late payments, evictions, and even repair requests.

The vehicle by which you collect rent will tell a tenant much about you. From driving over and getting cash to mailing a check, by the end of this post, I hope that you will either agree with my preferred method of collection or be more confident about your current method. 

     1) On Site Collection

The advantage is that you have an opportunity to visit the property and check out part of the property. You have an opportunity for a positive face-to-face interaction with the tenant that can reduce issues in the future. Rent is paid and you have cash on hand.

The dangers associated with this method of collection is enough for me to steer away from it. If others catch on that you are transporting cash or checks, you might be in for a confrontation that will not end well. 

2) Mailing (Drop off) a Check

This is the most common way to collect rent for most property management companies. Easiest for the landlord, while fairly convenient for tenants, this method can lead to headaches of lost checks, accusations of late payments, and bounced checks. You also now have to take your precious time to deposit the checks, electronically or at a bank. 

Having tenants use money orders helps to alleviate some of these issues, but leads to the tenants doing even more work every month. Some of these money orders (ie. Moneygram from Walmart) cannot be deposited electronically using a banking app.

3) Online Deposits

I have read about many companies that will handle collections for owners. However, banks have gotten with the times and partnered with one of these companies (Zelle). Due to this fairly recent change, for a majority of my tech competent tenants, I have them email their rent each month. It goes directly to my bank account! I also ask them to text me using a Google number (free!) that is forwarded to my phone. Instant, easy, and safe for both tenants and landlords. No banking information is shared either direction. 

I obviously prefer the convenience and safety of receiving my rent by email. I still have a tenant who mails a money order to my PO box every month. The tenant is not tech savvy and I don't feel they would be up for the change. Why fix something that isn't broken. I could request rent from them electronically using their email. I could basically bill them every month. Once I get tired of going to my PO box and then the bank, I might ask them to email rent to me.

Look for my next post about using this same service for conveniently paying for repairs.