Rent Collection Problem - Posted by David

import · April 29, 1999, 9:47am

Posted by Dirk Roach on May 02, 1999 at 08:34:51:

Which you can then transfer the funds at a date (Which you keep to yourself) via the internet. Many banks and credit union are online.
It seems to me if I had a “Rent account” that this would work. Also if it were me I would charge an additional 15 dollar “processing fee” for tennets to have the privialedge of doing that.
Also why not set up an automatic withdraw from their account into yours, your seperate “rent colleted account”. I know that many companies do this (phone company, insurance, auto payments etc).
Also I wouldn’t play this opprotunity as a punishment, but rather as a modern convience.
As for depositing money into someones account being difficult, it certainly isn’t if you set it up before hand. I know that Direct Deposit is pretty popular now, and that is done pretty much everywhere.
Personally I do not think that this would go over that well with all of my mobile home buyers, as many do not even have bank accounts and use money orders. But if I were renting a mid to upscale property why not?
Also a thought comes to mind is your stance with your tennets mindset. If you come across looking like a professional company, I’m sure that your local deadbeat is going to think that you also have a legal department and a floor of lawyers ready at a drop of a hat. Not a bad image to have in rentals, I should think.
It seems to me that if I were a “con-man or a dead beat” I would target or at least feel that I could get away with more with some small mom and pop opperation.
In my mobile homes I do play it small on the sale side of it, but once I have them in I think that many are amazed at the “size” of the company. Heck they really think twice after that first late letter from the “legal or collections” department. lol. However in reality that “department” is just little old me.
Just some thoughts,
Dirk

import · April 29, 1999, 9:47am

Posted by David on April 29, 1999 at 09:47:14:

In the area that I own most of my rentals, the tenants do not have checking accounts. All they want to do is pay in cash. I have tried getting them to get money orders, but they always seem to forget or say they don’t have the time. If I drive out to each house, they are happy to give me the cash, but it takes so much of my time.

A friend mentioned giving them each a deposit slip for my account and have them directly deposit it themselves, but how will I know who has deposited their rent and who hasn’t ( we own over 20 properties ).

Any suggestions or ideas?

import · April 29, 1999, 8:32pm

Re: Successfully done this for 10 years in 4 towns - Posted by Millie I.

Posted by Millie I. on April 29, 1999 at 20:32:40:

David,

JohnBoy just described my system that I created for myself and have used with zero problem for 10 years in 4 towns. I have posted the details several times before on this newgroup. Here it goes again:

I own apartment buildings and SFR in 4 towns. My Rent- Receiving-Account is at a bank that has branches in all 4 towns. It is just a regular pass book. It is set up at the bank as a rent account. Anybody can deposit money in it, but “only my signature plus the branch manager signature together” will withdrawals or transfers be authorized. The bank managers and most of the bankers and tellers at all branches know me by sight. No one can get into the account alone, not even me.

I designed a Rent-Deposit-Form that has all the rent payment instructions, bank hours and addresses, my rent account number, and blanks where tenants can fill in their names, addresses, month & amount of payment. The tenants fill the form each month, and take it to the banches closests to them. The teller ( familiar with the procedure) will deposit the rent into my rent-account, stamp and date the payment, and return the form to the tenant as a rent receipt. The regular bank deposit slip is mailed to me.

When I sign leases with tenants the first time, each tenant is assigned a two digit number, which is added in the cents portion of their rents. So tenant #13 paying $500, will now pay $500.13 for rent. Tenant #23 paying $800 will pay $800.23 for rent. When I call the bank computer to verify which tenant paid rent, all I will get is deposit amounts, example $450.03, $650.17, etc. That way I will know that tenant #3 and #17 had paid rent. I give the tenants 15 copies of the form when I sign the lease.

It is a little complicated to set up, but I have had no problem for the last 10 years, not even once. Once the tenants get used to it, they love the privacy and convenience. I save time because I don’t have to worry about good tenants. I concentrate my efforts to deal with delinquent tenants only. Only Cash or money orders for exact amount is accepted at the bank. Never accept personal checks, it will eliminate a lot of troubles that you don’t need.

Email me if you need extra help,
Millie I.

import · April 29, 1999, 8:07pm

Re: Rent Collection Problem - Posted by Ken

Posted by Ken on April 29, 1999 at 20:07:02:

I always enjoy going rent collecting. Heck, it’s my favorite day of the month, and I’m running to better than 40 units.

It’s also quite nice to be able to visit each tenant at least once a month and get in to make sure everything is going OK (read, keeping the place decent). And I wont mention that there are benefits to some people to receiving payment in cash.

Do you have a trustworthy tenant at the property who could act as a semi-manager and make just one stop each month?

import · April 29, 1999, 6:08pm

Re: Rent Collection Problem - Posted by PBoone

Posted by PBoone on April 29, 1999 at 18:08:39:

I understand the desire to have the money, but as long as you are willing to pick up the rent the tenant will continue to pay when you show up. When YOU really decide not to be a delivery pick up service the tenant will change the behavior. Here are a couple of ideas

Charge for pick up of rents ie 10 or 20 bucks per pick up.
write a Certified letter to each tenant letting them know the NEW process of mailing rents and DO NOT BACK DOWN send 72 hour notices or evict if needed.
Pat

import · April 29, 1999, 3:48pm

DO NOT DO THAT!! - Posted by Jim IL

Posted by Jim IL on April 29, 1999 at 15:48:40:

Do NOT give them your account deposit slip!
As a former Cop and Private Investigator, I can tell you this is the quickest and easiest way to lose your money, privacy and sanity.
With one of your acount deposit slips someone could debit your account, transfer funds, and find out all kinds of info in you. If it is a checking account, they could also order checks from a check printer and write off your account all day long. I know this is illegal, and they would eventually get caught, but, in the meantime, your out money, and time to chase down the funds and perpetrator.
Now I know, you may say, “but my tenants are not like that!”.
But, what if they lose one, throw it away in the trash or someone else takes it from them?
A better idea may be to give them a “Payment book” with slips listing the due date, amount to be paid, and a late fee if after such and such date. And of course, a "method of payment accepted, listing a P.O. box or address for mailing and the words, “payable by money order or check”.
You can make them your self or have a print shop do it cheap enough.
The other benefit is that your tenants who a chronic late payers may include your late fee without question or hassle.(which is an increase in your cash flow)
Just my $.02,
Jim IL

import · April 29, 1999, 2:31pm

Difficult Problem - Posted by Sean

Posted by Sean on April 29, 1999 at 14:31:15:

But I think you’re on the right track. You say you own 20 different properties; are they multi-unit properties? If so, you should probably open a different checking account for each property.

You can have them make those deposits directly into your account and drop the deposit receipt off to you as proof of payment. Maybe through a small slot as mentioned previously.

I don’t like the idea of people dropping money unattended through a slot. All it takes is one determined guy with a crowbar or ammonium nitrate and you could be out a month’s worth of rent.

import · April 29, 1999, 11:04am

Re: Rent Collection Problem - Posted by Brandi_TX

Posted by Brandi_TX on April 29, 1999 at 11:04:38:

When your tenants renew their lease or when you get new tenants, state in your lease how rents are to be paid (ie NO CASH). Make sure you are firm with this, make no exceptions. Also state in your lease that a late fee will apply for every day the rent is unpaid.

Visit www.mrlandlord.com

It is a wonderful resource for landlords, Good Luck.

Brandi

import · April 29, 1999, 10:39am

Re: Rent Collection Problem - Posted by Tom, NE

Posted by Tom, NE on April 29, 1999 at 10:39:32:

Could you set up a drop box somewhere?
Put a mail slot in your front door, then they can dorp off the rent right at your door.
I have a storage building at my four-plex and was thinking about this but since I only have the 4-units it’s not that big of a problem for me, yet.

import · April 29, 1999, 10:10am

Re: Rent Collection Problem - Posted by JohnBoy

Posted by JohnBoy on April 29, 1999 at 10:10:28:

You can make each rent amount different. Add a penny to each tenants rent to create an ID that will tell you who’s deposit belongs to which tenant.

Tenant A Rent: $400.01

Tenant B Rent: $400.02

Tenant C Rent: $400.03

Then you can call the banks 800# and listen to what dollar amounts has been deposited to your account. Then you can identify each tenant that has paid by the dollar amount of their deposit.

import · April 30, 1999, 8:18am

Re: Successfully done this for 10 years in 4 towns - Posted by Carmen

Posted by Carmen on April 30, 1999 at 08:18:34:

That’s great that this works for you. I can see setting up this kind of system - if I were dealing only with lower-income tenants, people who are used to paying all their bills with cash and money orders. I can’t see tenants in $120+K homes doing this, or even $700+/month apartments. Many of these would be professional people, and like me, may feel insulted and put out by these rules (I’ve only written a couple of money orders in my life, and don’t ever recall paying cash for a bill! And with ATMs, checks, and on-line access to my accounts, I can’t remember the last time I actually set foot inside a bank.)

Of course, then you can say, they don’t need to rent from me … which is fair. Perhaps losing a few people who balk at this is worth the hassle-free system!

import · April 30, 1999, 12:48pm

Listen to Jim IL, as VersaCheck Pro is only $49.99 to print checks… - Posted by raelynn mitchell

Posted by raelynn mitchell on April 30, 1999 at 12:48:36:

of any size, including business and personal checking accounts. It is VERY easy to use and to set up checking accounts to print on VersaCheck’s own check paper, which runs only $20 at Staples, Office Max, and Office Depot. By the way, Deluxe Checks will sell you blank check paper if you ask them for it.

My point here is, nowadays it is VERY easy for the criminally minded to use technology designed to make life more convenient in order to rip people off quickly and with very little effort.

This software is very nice if you hate to pay the bank their high fees for your checks, and comes out even cheaper than ordering checks from those other sources like Checks In The Mail and Current. But a police officer friend pointed out the dangers a while back and explained that there is even a clipboard that can save a digital signature written on a regular sheet of paper in such a way that it can later be uploaded to a computer and saved as a bitmap that can be used with this software to digitally sign a check with the person’s actual signature. Also, any $100 scanner could do the same, although it might not be as clear as the digital clipboard.

Be very careful.

import · April 29, 1999, 7:20pm

Re: DO NOT DO THAT!! - Posted by JohnBoy

Posted by JohnBoy on April 29, 1999 at 19:20:58:

I don’t think it would be quite that easy. If someone was to order new checks using the information based off the deposit slip, guess what? Those new checks they printed will never clear the bank. Why? Because if the moron was copying routing number from your deposit slip it’s not going to match the routing number on your checks. They are completely different numbers. Look at one of your checks and compare the routing number to the numbers on your deposit slip. They will be completely different numbers.

If what your saying is true, then it would be foolish to pay anything by writing checks. All it would take is one dishonest employee working for a company somewhere that you paid by check and they could get all the info off of your check including the correct routing number. My point is, if I’m going to have to worry about a handful of tenants figuring out a way to bleed my account then it would be even dumber to pay anything by check including your bills. The odds are 1000 times greater that someone out there would snatch an actual check you wrote somewhere and copy all the information from that including a copy of your signature, which is not on a deposit slip.

import · May 1, 1999, 12:48am

Re: Successfully done this for 10 years in 4 towns - Posted by Rich_PA

Posted by Rich_PA on May 01, 1999 at 24:48:39:

Some of my renters have been doctors, and currently I have software professionals renting some of my places, at $995/month. They ALL make direct deposits into my acct. I’ve never had a problem, and combining it with “discount rent”, among other things (see my post below, “DO THAT!”), I have NEVER had a late rent. (Not all of my renters are professionals… some were minimum wagers, etc.) Some of them have auto-deposits from their banks into my credit union (again, a credit union is far superior to a bank), so they don’t have to write out a check, or go to the bank, etc.

Rich_PA

import · May 1, 1999, 12:48am

Re: Successfully done this for 10 years in 4 towns - Posted by Rich_PA

Posted by Rich_PA on May 01, 1999 at 24:48:39:

Some of my renters have been doctors, and currently I have software professionals renting some of my places, at $995/month. They ALL make direct deposits into my acct. I’ve never had a problem, and combining it with “discount rent”, among other things (see my post below, “DO THAT!”), I have NEVER had a late rent. (Not all of my renters are professionals… some were minimum wagers, etc.) Some of them have auto-deposits from their banks into my credit union (again, a credit union is far superior to a bank), so they don’t have to write out a check, or go to the bank, etc.

Rich_PA

import · April 29, 1999, 11:50pm

Not always… - Posted by Brandi_TX

Posted by Brandi_TX on April 29, 1999 at 23:50:19:

JohnBoy,

I am not sure what to attribute the difference to, but having different numbers on your checks and deposit slips might be a state thing. I checked both of my accts and sure enough, the deposit slip and the checks have the same routing ##'s. Maybe Texas banks aren’t as paranoid??

Brandi

import · April 29, 1999, 7:43pm

Re: DO NOT DO THAT!! - Posted by Carmen

Posted by Carmen on April 29, 1999 at 19:43:14:

You may be right, but I would still agree with Jim. Not to be paranoid, but the less my tenants (or anybody else) knows about me the better. That goes even for my corp (I would never give out personal info, anyways). There are too many strange people out there who will do things you never thought possible.

Also, I found out that it was very difficult for me to deposit funds into even my father’s account, so I can imagine doing it in a “stranger’s”. Maybe it’s because I’m in S. Florida, but I was told by my bank (which is also my dad’s bank) that they discouraged this non-account-owner type of direct deposit because of problems they were having with money laundering. They would not do it in the drive-throughs - I had to come into the bank personally and show ID. Apparently $$ was being deposited into innocent people’s accounts, then withdrawn with check cards, ATM cards, or checks written on it, so that the $$ would not be traceable. I always thought that, anytime anyone wanted to put $$$ in my account, it would be a GOOD thing! Go figure. In any case, I don’t know if they are still being that strict, or if it was a temporary thing, but it happens.

import · April 29, 1999, 8:42pm

Re: DO THAT!! - Posted by Rich_PA

Posted by Rich_PA on April 29, 1999 at 20:42:19:

All my tenants are required to pay their rents directly into my bank (now credit union, much better!), Each rent amount is different so I know who payed; No one has ever been late because I use Milin’s method of discount rent (an excellent book, ~“buying and renting rental properties”, by MILIN), I use his rental agreement with some clauses I’ve added over the years (and now some from mrlandlord.com). I’ve never had a problem with my tenants directly depositing into my acct, either in person or by mailing the payment. I give them an 8 1/2 x 11 sheet onto which I’ve copied 3 or 4 of my deposit slips. And I’m not worried about them stealing from my acct; it would be FAR more likely that it would happen from one of my checks. The bank did screw up twice, didn’t give me the CASH deposits, although the tenants had receipts. ALWAYS make the tenants KEEP the receipts!! I no longer use that bank.