Ideas for automating rent collection and mortgage payment?

Question

I recently bought my first investment property (single family) and am looking to find an automated method for my tenants to pay their rent and also for me to pay my mortgage. I've read that PayPal charges unless it's to friends and family so I guess that's out. As of right now I told my tenants to just deposit cash directly into my bank account each month but I would prefer if they could automate it or at least somehow pay me online just to make it easier on them. I've discussed automating my mortgage payment with my bank and they apparently have no options to do so. There's got to be some type of service out there that allows people to simply transfer money from their account to someone else's account, right? Anyone have any suggestions or experience with this?

Thanks in advance,

Jason

Also, hooray for my first BP post! :)

Thanks in advance,

Jason

Also, hooray for my first BP post! :)

Soh Tanaka · Answer

Jason,

Congratulation on your first investment property! Regarding to the rent correction, I use ClearNow. Money gets taken out from the tenant's account automatically and will be deposited to my account automatically also. I love it, but it's a bit pricey ($15!) I'm in the process of changing all my tenants to Cozy, which is free! I hope this helps.

Soh

Jeff Bridges · Answer

I try to use online direct deposit website solutions that are geared to send automatic reminders to tenants  and deposit notifications to landlords. Cozy is a well reviewed free direct deposit solution that I would recommend you utilize. Intuit small business payments network also works well but is 50 cents per transaction and is a close 2nd. It does not have the email reminders and notifications for tenants like cozy. You will get notified via email however with Intuit but it has basic functionality.  Finally, if your tenant likes to pay cash/physical check or not as tech savvy with internet, you can issue them a deposit-only ATM card via Bank of america and they can deposit cash/checks themselves at any of their ATMs. You'll need to get a BofA business checking account which is free, but has minimum monthly balance requirements. More info on how that works on the link below.

With your mortgage, I recommend you use the online billpay feature associated with your checking account using your personal login. every bank has this feature. You enter your biller address details and set it up to be a recurring monthly payment, and it will mail a check from your account at no cost to you. I set this up with as many of my recurring static  bills as possible so I can automate the business. For those bills that are non-static, you have to setup the auto-bill pay at that companies website portal, like a utility bill for example, so that it can auto-deduct the precise amount of the bill for that month... your checking account billpay feature wouldn't be able to know that non-static amount, but its perfect for your mortgage. Billpay will usually send you a notification of payment so you can remember what is being paid in case you forgot.

More about the bank of america Deposit Card:

https://briankondas.wordpress.com/tag/free-bank-of...

Cozy:

https://cozy.co/

Intuit payments:

https://ipn.intuit.com/login/home

Kelly N. · Answer

We use Intuit Payment Network for rent payments online, love it!  $.50/transaction is a great deal.

As far as automated mortgage payments, I have set up automatic payments to be sent out by our bank (Chase) each month- one for each mortgage coming out of the account specified for each one.  I have been paying our home mortgage this way for years, and it is a free service from our bank.  I pay online for just about everything else, and only write actual checks to pay taxes, the occasional contractor, and to refund security deposits.  I can also set up automatic transfers from my main business account to the individual property accounts, but prefer to do this manually every month so that I can adjust it accordingly.

Jason Mcdaniel · Answer

Ok awesome! Thanks again for all of the great info!  I will definitely be looking into some of the pay services after I purchase my first multifamily and have more tenants to manage.  For now I've decided to just do billpay at my bank (Regions) which I can automate to send a monthly check to the seller who is financing me.  I was just trying to get it straight into his account to help him out, but yeah the bottom line is that's on him.  And for the tenants I'm just going to have them deposit cash into my account each month.  I'm also going to look into other banks like Bank of America to see about simpler money transfer options.  I still think it's crazy that a huge bank like Regions can't just do a wire transfer to another bank account and instead can only send out a check to someone's address.  But oh well, accept the things I cannot change and change the things I can, right?

With much gratitude,

Jason

Rick S. · Answer

@Jason Mcdaniel I work for a rent payment service and may have an option for you to be able to receive and submit payments so I can send you a PM if you want more information.

Corey Cress · Answer

I have Bank of America and I can set up monthly deposits to outside accounts.  Your bank might have something similar in their online platform.  You can have your tenant set it up and you can set it up for your mortgage.  I have $150 going every month to my savings on the 5th, but I could easily send $150 to a friend every month.  Just needed his account number and address to set it up I believe.

Jeff Bridges · Answer

To be honest, its really his problem. He can't tell you how to pay your mortgage unless its specified in the promissory note as a stipulation. If he want's it direct deposited, that's on him to supply you with a service to be able to pay via his preferred method. There is no free process to do that, so why should you be eating that cost for his convenience when billpay works well and is free? When I setup a seller financing note for a seller financing deal, I used a mortgage servicer who manages payment collection of seller financed notes by accepting a check at a PO box and then direct deposits into the lenders account. Their website is sellerloans.com and they charge $15/month for this service. seller will need to set that up since its his loan. They have great customer support and no online accounts required to set everything up. The alternative is using IPN via link above to handle direct deposit only which is perfect for small business direct deposit payments like yours, you both setup accounts where the direct deposit will be done, and then arrange for the 50 cent fee per transaction be billed to the lender/seller, since that is for his convenience, not yours. they'll need to setup an online account as well, no way around that... Again, I'd put the onus on the seller to supply you with the direct deposit service and bear the cost for such service. This shouldn't be your headache since you are fulfilling the note terms by paying via check. Feel free to provide the suggestions above, but you should be under no obligation to pay for or setup the above services if utilitzed.

Jason Mcdaniel · Answer

Wow! Thank you guys for all of the great info!

I think an important piece of information that I left out was that my mortgage is with owner financing.  So the man that I bought the house from would like for me to make my monthly payment directly into his bank account the same way that I would like to have my tenants pay me.  With bill pay, at my bank at least, they can just send out a check once a month but there is no way to just send the money to another bank account.  That's where my biggest headache is coming in.  And I'd like to be able to set it up to go to his account without him having to do anything such as set up an account with a third party company.  Thanks again for everything!

Scott Schultz · Answer

My tenants to the lat my bank, an I have auto pay from my accounts to the appropriate loan, all at the same bank, its simple, for the tenant, and for me, I give them a deposit slip with the account name, property address, and last 4 of the account, I can log in and see they paid, and the bank even images the deposit slip, so I can verify, Be careful with services, I heard on The Dave Ramsey Show, a guy was using a service, and a tenant was paying with stolen checks electronically, because the landlord was in possession of stolen property (the money) it was confiscated, in his case 11 months worth, know the terms and conditions.

Jay Dewberry · Answer

Hi Jason. Perhaps this thread will help answer some questions for you. Outside of that, Bigger Pockets has a perks section . Even though the discounts are for Pros, it still offers a few suggestions for automating your tenants payments. One being Paylease, another is Rentbits, and finally PayNearMe. Hope that helps.

Ideas for automating rent collection and mortgage payment?

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