Tenant monthly rental payments

[John Reel]

What are the best ways to have tenants pay rent. Is it best to ask for a personal check or pay on-line.

[James C.]

John, 

It all depends on how many properties you have and how you set up your accounts. 

The best way for a small number of properties is 3 accounts.  1) an escrow account for holding security deposits. 2) a deposit account  (savings or checking) where the tenants place there monthly rent. 3) an operating account where the money from account 2 is moved (sweep or manually moved) to pay the bills for the properties.

Two accounts can do the trick, but there is a bit more liability in my mind since your tenant has the account number for the operating account to deposit into.

For a small number of properties, this setup works well since you get an understanding of your cashflow and operating requirements in a very hands on way. 

From there as you grow, you can move on to one if the online platforms  (or not). At least when you do, you'll have an understanding of how the underlying process should work. 

Personally, I wouldn't be accepting personal checks from  tenants,  I would be having them deposit directly into my bank account.  It's 2018, not 1978, and online banking has been around for a while.  An exception might be for an elderly tenant, but I know plenty of 70+ folks who are excellent at working with computers and the Internet. 

Hope that helps. 

Good luck, 

Jim