3 Questions of a new Landlord

[Nick Ferrari]

Hey Everyone!,

I just recently bought my first rental and i've got some basic questions.  Any help regarding below would be GREATLY appreciated.  THANK YOU!

1.)  What do you suggest regarding a pay schedule for tenant. 

A.) Should you give them the option of which day of the month is best for them so they can pay you timely?

OR

B.)  Pick a random day of the month say the first and stick with that date?

2.)  What do you suggest for methods of payment? Cash, Credit, Check, Direct Deposit?

A,)  I was thinking either Direct Deposit or Check

3.) What do you suggest for late fees?  I have a 5 day grace period i'm willing to give. But not sure whether or not I should go with a daily fee for each day or a one time charge for that fee.

Thank for the help guys much appreciated.

[Audrey Ezeh]

Originally posted by @Nick Ferrari:

Hey Everyone!,

I just recently bought my first rental and i've got some basic questions.  Any help regarding below would be GREATLY appreciated.  THANK YOU!

1.)  What do you suggest regarding a pay schedule for tenant. 

A.) Should you give them the option of which day of the month is best for them so they can pay you timely?

OR

B.)  Pick a random day of the month say the first and stick with that date?

2.)  What do you suggest for methods of payment? Cash, Credit, Check, Direct Deposit?

A,)  I was thinking either Direct Deposit or Check

3.) What do you suggest for late fees?  I have a 5 day grace period i'm willing to give. But not sure whether or not I should go with a daily fee for each day or a one time charge for that fee.

Thank for the help guys much appreciated.

 Hi Nick, congratulations on your first deal. 

I am fairly new to this also so I will tell you what I have picked up from much more experienced and smarter people.

1: Never accept cash...you are just asking to be robbed :) Money order, cashiers check, personal check etc. I wouldn't have them coming to your house to drop off rent either (I am buying from a couple who have their tenants come to their house to pay them rent). 

A few ways to go about it...

a: Online...there are lots of property management software that can easily handle this, many for free e.g cozy, tenant cloud, unit dash, verticalrent etc.

b: Pay into your bank account directly...ie they drive to your bank and deposit into your account. Some people say have a separate account and move the money out as soon as they deposit it. I've never heard anyone say a tenant was able to access they money after they deposited it so this may be overkill.

c: other services like 'pay near me,' dwolla etc

d: Mail the check...get ready for the occasional "my check got lost in the mail" excuse.

2: Make your rent due on the 1st without exceptions other than grace period. It may not matter right now that you have one property but when you keep adding units and everyone is on a different pay schedule, it becomes a headache to keep track of who is on time and who is late...everyone pays on the 1st, easy to see who is delinquent.

3: Get very familiar with your state landlord tenant laws ASAP. There very strict rules for what you can and cannot charge. In my area, I cannot charge more than 10% of rent in late fees. Seriously though, google that and download it (yes it is a beast to get through). Follow the rules to the letter. 

4: Get this book and read cover to  cover : https://www.amazon.com/Book-Managing-Rental-Proper...

and/or this one : https://www.amazon.com/Landlording-Autopilot-No-Br...

Congrats again and good luck.