what is the best method of collecting rent. i have heard of direct deposit from tenants account to the landlords works ver well. (minimum contact) is this a good way to go or is the a better one. and how hard is this to set up. thanks
Collecting rent is not a one size fits all. Some tenants don’t even have accounts that they can draft from and if they did it would always bounce. I do have some tenants making direct deposits into my accounts. I open a new bank account for each of my properties and deposit their rent checks in to each. (That way if they bounce it only ties up that one account) When the check clears I transfer the funds to my main account to pay mortgages etc.
Washington Mutual gives you as many free checking accounts as you want. I have also gotten a deposit card from them to use at an ATM. It is just like a debit card without the Visa logo. It can only be used to make deposits. It can’t check balances, can’t transfer balances and can’t withdraw money. If my house is at 6258 Main St, I make the PIN 6258. That makes it easy to remember. I have good success with some of my more sophisticated tenants. It gives them freedom to not have to time the post office. They can make a deposit at 11:59:59PM on the first of the month and it will be credited as on time. If they mail their rent, if the check is not in the mail by the 20th of the month, it is probably going to be late. They can also make a payment from anywhere in the USA that has a Washington Mutual ATM machine.
Johnny,
I believe in being a hands-on landlord. I pickup all rents in-person. That way, I get a chance to see every property every month. While I’m at the property picking up the rent, I do a quick safety inspection. I spend about 2 minutes walking through the house to see if everything is ok. It gives me a good heads-up if things are starting to go wrong.
Mike
Like propertymanager, I’m hands on. For my “three families”, I have a rent box (actually a locked mailbox) in the lobby for tenants to leave me the rent. By making myself picking it up, I get to see the state of the property.
About 10 years ago, 3 months in a row, the wife was busy, I went by myself to pick up the rent checks, and heard running water. I knocked on everyone’s door, to make sure no one was home, as everyone was at work during the day. I looked around found nothing amiss the first two months. On the thrid month, I found a damp spot on the garage floor, and called a plumber.
Turned out the main pipe. about 50 years old, coming in the building thru the garage floor sprung a leak, and was running water all this time, perhaps longer. And this was a year before the city installed water meters, and we were charged a flat rate. Otherwise, we might have discovered the problem much earlier from the water bills.
By the time the plumber got to it, chopped up the cement, water was coming out like a geyser, and we found it washed away quite a bit of the subsoil below. Had it gone on much longer, the structural integrity of the building could be endangered.
Had I waited for the checks to come to my mailbox, the building might have collapsed on me. As to the tenants, no one notiiced a thing.