All Forum Posts by: Nathan Miller

Yikes, that's awful and all too common when the homeowner isn't doing their own inspections.  Section-8 (if they do the inspections at all) simply makes sure the house is habitable.  Smoke alarms, functioning water, etc.  They aren't looking out for the homeowner, they are chartered by the state to look out for the renter (ironically, paid for by the landlord and other taxpayers).

Hopefully he can prove the damages happened after July 2014 so he can get reimbursed from Section 8 by the Housing Choice Landlord Guarantee Program.  Not so long ago Oregon laws changed which were not good for landlords, but the one potentially good thing out of them was this Guarantee Program.  Hopefully this landlord gets some of those funds.

https://www.oregon.gov/ohcs/pdfs/factsheets/factsheet-housing-choice-landlord-guarantee.pdf

Generally it's spelled out in the purchase contract when you get possession of the property.  If it's only a verbal agreement now, get it in writing for them to sign at the title company when the deal closes.

So yes, the math can work both ways.  It's 3.5% cost of the total rent transaction, or as @Scott Weaner was indicating, it is 14% reduction of net profit if you accept a $1000 payment by credit card.  I actually prefer looking at it the way Scott demonstrates it because it's a more realistic view of the hit you take on your profit which is much more applicable in a rent situation being as the bulk of the rent payment has expenses associated with it (mortgage, taxes, etc).

In working with thousands of landlords, it is extremely rare (like nearly 0% rare) to see a landlord pay the transaction fee though.  I see most landlords accepting ACH for the bulk of their electronic payments, and setting CC as an optional feature that the tenants can use in a pinch, but the tenant pays a convenience fee to cover the merchant costs.

As far as to the original question of using Square.  Square is a merchant account like most; however, it is designed for point of sale systems and is going to be highly consumer (renter) biased if a chargeback were to occur.  I would recommend setting up a merchant account that works with a lot of landlords rather than a lot of coffee shops.   Ideally use the merchant account that works with your property management software so when your tenant logs in to check their balance, they can just pay right there.  Also a merchant provider familiar with landlords is more likely to fight with you (rather than against you) in the event of a chargeback.  I doubt you would get that experience with Square.  They are made for coffee shops. :)

Some accountants do require Quickbooks, but most don't.  Most accountants want a balance sheet and P&L, which you can get out of other financial applications.  Quickbooks doesn't provide all the things that attract tenants to your property either like ACH payments, online portal, online maintenance tracking, etc.  Competing against landlords that do provide these can be tough if you are stuck in the QB feature-set.  More important in some locations than others of course.

If you use a landlord specific program, it should also provide the exact reports necessary for your CPA to do their job.

@Andrew Fredrickson - You have the big bases covered.  Some others to consider are apartments.com, rent.com, homes.com, realtor.com, and houserental.com.  

If you are using property management software to manage your rentals, you can probably enter your listing information once and it'll then automatically publish to all these sites - then remove it automatically when you fill the vacancy.  A huge time saver.

Darrin - absolutely yes.  If the tenant has your number and knows they can call you, they will call any day on any hour.  When I did my own management, I was sure to make it ultra clear to the tenants what constituted an emergency and what did not.  Basically fire, flood or blood = emergency.  Everything else can wait until a business day/hour.

Even with strict policies in place, tenants will still try.  Later on, I got a google voice number and just used the DND feature a lot. :)  Now I use property management and they handle it all for me.

Hi @Brent Kiger - I've never heard of Rentigo and I've been directly in this industry for almost 10 years.  Maybe they are a startup.  But you might want to check out the list of software solutions that BP provides here.  A lot of these solutions provide free trials so you an check them out risk free.

https://www.biggerpockets.com/rei/online-property-management-software-cloud/

I'm with @Roy N. and everybody else on this one.  As nice as it might be to get a year of rent up-front, now they have paid and you have accepted them for the next 12 months.  This means no option of eviction if something goes terribly wrong within that time frame.  Or at least a very difficult eviction.

There's also the possibility that the money is not legit and they just need to not have the money in their possession right now.

If you are considering accepting it, you might want to write up an agreement that states that this is considered a security deposit payment so it's not considered prepaid rent.  Check with your local laws though.

Save yourself the trouble and keep this one month-to-month I'd say.

@Cassidy Burns - ACH is the way most landlords collect rent.  It's inexpensive (from free to $0.50/transaction) which is FAR less than the cost of processing a paper check, money order, or cash.  It's also the method that banks use to collect mortgage and car payments, so it's widely accepted and bulletproof technology.

Ideally your ACH solution is built into your property management software, so all the accounting magic just happens.  If you aren't using software, there are also many standalone ACH solutions available today.

That's crazy...  and should be illegal!  It probably is.