Just took over a property, how to collect rent?

Question

I just took over my first rental property, a 4-unit that was previously managed by a property management company where the tenants sent in their payments by mail or dropped it in their office drop box. I am having a hard time deciding how I should collect rent. Each unit is occupied, and each tenant's rent is different. After looking through the forums here are the options I have been considering, and what concerns me about them:

1) Electronic - this concerns me because 2 of the tenants are in their 70s and would never be able to figure this out. Nice people that have been in the apartment for 18 years, but not real tech-savvy

2) Drop-box- I thought about just putting a locking lockbox on the property for them to slip their rent into, but my concern is (maybe dumb) what if someone runs off with it or breaks into it?

3)Deposit slips - I have deposit slips from my bank with my LLC name typed on them and no account number. I could just have the tenants take these slips with their rent to my bank, but is that asking too much?

Sorry to blather on and seem a little scattered, just trying to figure out all of this on the fly. Thank you for taking the time to read this, and thank you in advance for helpful suggestions.

Jake Dotson · Answer

Account Closed I have no problem with money orders. I even plan on accepting cash from my tenants, as long as they contact me beforehand.

Bob B. · Answer

Wellsfargo will give you a card that is only good for deposits.I like the bank deposit idea. I het an email when a deposit is made. No more excuses.for checks lost in the mail, etc.

Jimmy Murray · Answer

I like the idea of the deposit slips. You would just have to have them send you a text when they made the deposit. On a side note. Your bank may have some type of card system you could set up and have a personalized card for each tenant.

Michaela G. · Answer

Every time you give a check to someone, you're giving them your account #. Subsequently, there's very little someone can do to your account with the account #.

Thomas S. · Answer

What ever you decide is not too much to ask of tenants in regards to rent payments. Determine what is most convenient for you, keeping in mind your state landlord tenant regulations, and inform them immediately.One option you should not ever consider is picking up the rent payments yourself. Landlords should never be at their tenants beck and call regarding rent payments. It is their responsibility to deliver the payment to you not your responsibility to pick up.Option #3 will be the best with a minor adjustment. Set up a special bank account for rent deposit and transfer the money to your LLC account as soon as you receive the payments.I have all my tenants provide me with post dated checks for the year simply because I am old school.

Jake Dotson · Answer

Thomas S. Thank you for the response! I agree, it should be convenient for me, and I shouldn't have to come to the tenants. I like the idea of the drop box as kind of a win-win scenario; it's easy for me to swing by on the 1st and 5th, and easy for tenants to pop into the common area and drop off. I also like the idea of setting up a deposit only account and transferring funds, I hadn't thought about that. I will have to talk with my bank tomorrow and see what they suggest. Thank you again!

Shaheed Crier · Answer

Ask them to get a preauthorized payment form from their bank if they can do that. That way on the 1st of the month (or whatever day you have for them) you can just pull it out of their account.

John Bower · Answer

I think a drop box on the property is a really good idea. Also, with you being on the property around the 1st of each month, it allows you the time to quickly check the property and make sure things are okay and that there aren't any major repairs that are needed. Also, I think if the tenants know that the "property manager" (I say property manager because I don't normally like my tenants knowing that I am the owner) is going to be on site, they are more likely to treat the building more kindly.

Curtis Bidwell · Answer

@Jake Dotson I just started using Cozy for all my tech-capable people (free for them and me). I will require it for all new tenants coming in. I have a few that will continue to mail in their checks because they don't have bank accounts. But I will never pick them up at their residence OR at a common area drop box that is not attached to an onsite office. I took over a building with a drop box and immediately discontinued it ... Way too risky for vandalism! Anybody with 30 seconds and a screw driver has access to your $!Tenants tend to do whatever you require of them. Some just take a couple months of 'training' to get them where you want them to be.

Jake Dotson · Answer

@Michaela G. I suppose that's true. I guess I just worry about people setting up 3rd party ACH payments with my account info (ex. utilities), but as you said people have that info all the time when I write checks. Maybe I'm just paranoid. Thank you for the response!