When it comes to collecting rent on your properties there are practices that will make the process smoother and reduce the risk of issues. So without further ado…..
The Dos and Don’ts of Collecting Rent
The Don’ts of Collecting Rent:
Collecting Cash in Person
There are several reasons this is a no-no.
- Carrying a large sum of cash on you at a predictable time makes you a target for theft.
- It’s an inefficient use of time to go door to door collecting funds.
- There is no third-party record of the transaction taking place.
The above points speak for themselves—why waste time, resources, and possibly your safety when you do not have to?
Tenants Dropping Cash off at Your Home
Personally, I do not want my tenants knowing where I live. They may be great people, but you never know what people will do if things go south. The last thing we want is an angry tenant showing up at the front door of our home. Or worse, vandalizing our home out of anger.
The Dos of Collecting Rent:
The way technology is today online payments are the easiest and most efficient way to collect rent. There are various online options available:
Cozy.co (https://cozy.co/) – This service accepts online payments for you. Tenants can setup automated payments that get withdrawn from their bank account or use a debit or credit card to make payments.
This service is free for landlords and free for tenants using ACH payment directly from their bank account. Otherwise there is 2.75% fee on payments done with a credit or debit card.
For a nominal fee Cozy also offer other services like background checks, credit reports, etc. to help screen tenants.
PayNearMe (http://paynearme.com/en/) – This is a great service for tenants that want to pay in cash while still allowing the payment to be an online transaction for the landlord.
Basically PayNearMe provides unique barcodes to supply your tenants. The tenant takes their cash and the barcode to a 7-11 (or any other approved retailer) to make the payment and receive a receipt.
PayNearMe then sends you an email or text that payment has been received.
The service does not cost the landlord anything to use after an initial setup fee. It does though cost the tenant a small transaction fee to make the payment.
The old fashioned mailing the rent check still works, but be sure you secure a P.O. Box to have rent checks mailed to. By doing this you don’t have to give out your home address, and you can just go to the post office to pick up all of you rent payments.
The only negative to this method is tenants can always give you the classic “the check is in the mail” excuse when you have not received it in time. Other than that, this is a traditional method that has worked for many landlords in the past.
In the end it’s a matter of preference, but we now live in a time where you can automate rent collection as opposed to chasing down your dollars.
Remember, it won’t matter how you are collecting rent if you did not BUY RIGHT to begin with. Make sure the financials work on a property. Download the property calculator now!