Hi everyone, I’m new to investment property and I would like to ask a very newbie question. So I’m living in Seattle and I have a 3bd/3ba townhome, I’m planning to rent the rooms out/rent it to a family because I’ll be moving to California for a while. I don’t have a physical address that I will be staying at in California yet so I can’t ask them to mail me the check. Is there alternatives so that they can send me money while I’m in California? I have a Bank Of America account I know there is a charge of wiring money($20?), what’s the best way/cheapest way to receive my rent? Thank you everyone!
There are some online rent collection services available. You can search for them. One example is clearnow. You could also set up a separate B of A acct just for rent and give your tenants a deposit card where they could deposit the money directly into that acct from an ATM.
thank you. and in the second case, do they also have access to withdraw the money?
No. My understanding is that you can get them a card where they can only make deposits. Bluemoon06 was doing this for his rentals. That’s where I heard about it. I haven’t personally tried the online clearinghouse companies either. I just know they’re an option. Most of our tenants don’t have checking accts so we just have them mail money orders. I’m also not sure if the local bank we use will let us get multiple deposit cards like that.
You are correct justin0419 that is the way I get my rents. I give them a deposit card. It is like an ATM card with no Visa logo. When you put the card in an ATM machine and put in their PIN they get a menu that allows them to deposit cash or check? You can’t check balances, you can’t transfer, or withdraw you can’t do anything but deposit cash or checks. This means I don’t have to go to my post office box looking for checks, tenants can’t say the check is lost in the mail or that they were out of town taking the family on a vacation to Disney because even in Orlando there is a Chase bank on every corner for them to make a deposit. I give them a card and the PIN number is their address. So if the rent house address is 5623 Elm Street their PIN is 5623 they have no PIN to remember. All I do is check my bank account balance from my computer and start seeing deposits coming in all day. I never have to go to the bank to deposit checks.
that’s a great idea. How much does it cost? If I have a few tenants in my house, will I be able to get a few deposit cards from the bank? Do you open a account just for this? if so, what kind of account does it call? thank you!!
My regular business accounts are at Chase and if you have a business account you can get as many deposit cards as you would like for free. I think the all the major banks (Bank of America, Citibank, etc) have the same thing. The account has a $15 monthly service charge but the cards don’t cost anything. The accounts used to be free and I had a business account for each of my houses and that is how I kept straight which house had paid. But when Chase started getting that $15 every month, I thought that was pretty steep (I was paying a couple hundred dollars a month) just to collect rent so I closed them all and now only have the main business account. You can go online and see the deposit if you need to check who it is from to make sure everybody paid. The ATM gives the tenant a receipt so they have their receipt and you have the online statement to see who paid. I have one tenant who pays in cash and so it only shows $1100 cash deposit. But I find that with rent increases etc all the amounts are different so that makes it pretty easy to see who is paying without going in to all the deposits. What I do monthly is since rents are due on the first and late fees don’t starts until the 5th, I don’t even look at the account until the 6th of the month. I log on and count the deposits. If they are all there and the amounts are ok, I don’t even look at who made which deposit. I then start paying mortgages. I sit in front of the tv in my daddy chair with my family watching the news. I get a cold beverage and put my PC on my lap, log on to the account, count the deposits if they are all there, I schedule the mortgage payments. The whole thing takes me about 20 minutes and my family time is not impacted at all. By the time I finish dinner is ready. No running to the post office, no running to the bank, no excuses about the check being in the mail. It works quite well.
Blue - my local banks can’t seem to do this. Too bad.
They cay I can give them the account number and the tenant can deposit directly.
I have a few tenants that deposit by using my account number. Anytime you write a check to someone youre giving them your account number. Anyone can deposit but only named people on the account can withdraw and get balance info.
Its safe and easy…good luck!
I only have 2 properties being rented out so I stick to the old school way of giving them my account number and they deposit the monthly rent into. I agree with Brandon, it is safe. And I like the hassle-free and uncomplicated way of it. Good luck!
You should checkout dwolla.com for collecting rent. It uses ach transfers so the cost is very low $0.25 / transaction.
Collecting rent will not be a big challenge it seems,but have you thought of other problems you might face for being away and how to handle them when they arise?
Great question. There is a problem if you have to walk up to the house and ask for the rent or if they mail a check. If you are not there you don’t get paid. This is why using one of the processes we have been talking about (deposit cards, deposit into your account and dwolla.com) They all allow the money to be deposited in your account even if you are sitting in a café on the south of France for 3 months.
Most banks have an auto-pay or bill pay program that will withdraw money from a persons account and send it to you or deposit it into your bank account! i have a few tenants set up on this kind of system and I have found that if it is easier for someone to pay their rent (ie an automated debit) they are more likely to pay without issues.