How to Organize Your Rental Property Payments To Make Your Life Easier

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It’s the beginning of a new month which means it’s time to pay all of the bills on my rental properties. This includes multiple mortgages, multiple HOA dues and payments to owners of some of my lease option properties. So, how do I keep track of all this without going crazy?

First, I use online bill pay. If you’re still writing checks you are unnecessarily wasting a lot of time. Before I started paying my bills online I would sit down once a month for what seemed like hours to pay all the bills.

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I Recommend this Rental Property Software

After I pay all of my bills online, I next record my HOA, mortgage and rent payments in Quicken rental property manager. This is the simplest property management software I have found. Plus, when tax time comes around, all you have to do is hit “print”, then hand your accountant the rental documents and he/she will take care of the rest. If you don’t have an accountant yet and you own multiple properties, ask for referrals from other investors you meet at your local real estate meetings. Or, you can use BiggerPockets.com (this website) to locate investors near you.

How do I keep track of all of these payments?
Well, since I’m pretty simple I use Google calendar. I use this calendar because I have to make certain HOA payments at different times of the month. I have a townhouse in Manassas, VA where the HOA dues must be paid by the 5th of the month or they’re considered late.

I have another townhouse in Manassas where the payments aren’t due until the 15th. And, I have a townhouse in Stafford, VA where the payments aren’t due until the 31st of the month. Obviously, I want to keep my money in my checking account as long as possible, so I make various payments at different times; the calendar helps me track it all.

How Do Your Tenants Pay Their Rent?

Now, besides using online bill pay, I also highly suggest you receive electronic rent payments. You can use companies such as PayLease or ClearNow, however, they’re not really necessary. You can just have your tenants use ACH direct deposit instead.

In fact, I now require my tenants to use direct deposit. But I do have tenants that have been with me for years who I still allow to pay by check. And guess what? Last month one of my tenant’s checks got lost in the mail. I know it got lost because this is an honest tenant who has always paid on time. Also, several years ago I had a tenant lose two checks in a row in the mail and I found out there was a new mailman in the area (you really have no idea how many pieces of mail get lost every year).

Anyway, every time you’re doing a real estate activity I hope you’re asking yourself, “Is this the highest and best use of my time and does this make my business less complicated.” Online bill pay, an online calendar and getting your tenants to use direct deposit are “yes” answers to the above questions.

By the way, you can also setup automatic bill payments; that way you never have to worry about late fees (a stupid and unnecessary waste of your hard earned money).

About Author

Jason R. Hanson is the founder of National Real Estate Investor Month and the author of “How to Build a Real Estate Empire”. Jason specializes in purchasing properties “subject-to” and has purchased millions of dollars worth of property using none of his own cash or credit.

16 Comments

  1. Instead of using 3 programs (Quicken, Google Calendar, Bank Direct Deposit), you can use Rentmatic (www.rentmatic.com), which allows you to store property information, create a rent roll and processes tenant’s ACH payments. It is easier because you are able to see which tenants have paid in your rent roll/deposit history, rather than having direct deposits that don’t synch with your rent roll.

  2. I will say up front that I am a Quicken competitor. There are many other products (not just mine) that are far more sophisticated than QRP. I would strongly recommend that anyone considering QRP find a way to check it out before buying (there is no free demo AFAIK).

  3. That’s it. I’m finally convinced. I have been putting this off but your article has really encouraged me to go ahead and get started with on line bill pay. I can see that it would save me hours every month and then make income tax so much easier.

  4. We prefer QuickBooks as you can use it to remind you for your bills, pay online bills and collect ACH.

    Bills: create and memorize your bills, and track bills dues, date, amount and to whom.

    Calender: When you enter the bills – there will be reminders for which bills are due when.

    Online bill pay: Pay bills right within QuickBooks. Check with your bank whether it will let you connect QuickBooks to their online bank to pay the bills. Some banks to charge free. We use TDBank – is Free!

    ACH: QuickBooks does it again – just started this new ACH service.

    And it handles more – tenant statement, budgets, reports etc.

  5. How I collect rents:
    1. I setup a deposit only account at my bank that maintains a zero balance.
    2. I gave the tenant a set of payment slips that includes the Bank routing and account number.
    3. The tenant can go into any bank branch and deposit the rent directly into my “deposit only” account.
    4. The bank setup a daily sweep for me that moves all money from the “deposit only” account into my LLC account automatically.

    Bonus, there is a 24 Hour branch of the bank inside the 24 hr Walmart within 2 miles of my rentals.

    Rent is late after midnight on the 3rd day, so the tenant has no excuse and there are no “lost checks”.

    Robin

    • I was just wondering if anyone who uses an online payment system can share what they write into their leases. I’ve asked a few people associated with these systems, and they’re not willing to offer anything solid with respect to verbiage. (Understandable, though not very helpful…).

      • Hi Sara, It was mainly to make me feel better about protecting the account number. I didn’t want to be giving out my corporate checking account number to my tenants. The “zero balance” account does not allow any withdrawals or checks. The only way to get money out of it is when it’s swept nightly to my corp account. All my tenants have been fine with it. No one has ever asked to pay online or by transfer.

        • Dumb question. If it’s automatically put in, how do you know which tenant put it in….if you have multiple units with the same rent amount?

        • Hi Jen, My bank scans all deposit slips, so I see the property address on the deposit slip when the tenant remembers to use it. If they don’t use a preprinted one, I ask them to add the house number in the comment. I don’t have a lot of rentals, so I’ve never had an issue knowing who pays when.

  6. Quicken property manager software is not a good choice for property management software. I’ve suffered with it for three years and now will finally switch at the first of the year. I thought it would be great and help me with preparing my taxes but it just no worth it.

    I’m convinced it was created by accountant types and no one in product management ever owned a property. The reports are terrible and there is no way to print out a tenant payment history. You are also very limited on notes you can put for each property or tenants. I’ve used several applications in the past and this is the worst. Stay away.

  7. Leveraging tools to automate the rental collection and payment process is definitely useful especially when multiple properties are involved. There appears to be many online payment solutions available online. Has there been a comparison or evaluation been made to compare against the various solutions that are available?

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