How to collect rents electronically ?

[Richard Chang]

Hi everyone,

I was thinking that there should be a way for tenants to pay rents others than by mailing a check, money order to the landlord ( no property manager ).

What are some ways to do this ?

Also, how do you collect rents and deposit them if you are out of town / out of the country for a few months ?

LA Guy :)

:D :D

[Bryan Hancock]

I used to use Clearnow:

Clearnow

They were okay...but they aggravated me at some point and we ended up hiring property managers for all of our properties.

Hope that helps...

[Jon Holdman]

Some banks will issue deposit only ATM cards and have ATMs that will accept cash.

[Richard Chang]

Thanks Jon and Bryan,

That was quick ! :)

I will check out the ClearNow and the ATM Deposit Only option.

How much does a property manager charge just to collect rents ? if you are out of town ....

Thanks, LA Guy

[Joshua Dorkin]

Here's a directory of:

Online Rent Payment tools that might come in handy.

[Bryan Hancock]

It really varies by the location and property type, but 6-10% is typical for SFRs and full management. Some charge fees to go with those percentages too.

[Shari Posey]

We went out of town for 5 months and provided all our tenants with payment slips and they mailed the checks directly to our bank. We only have 4 rentals but they sent them mostly on time every month and we viewed it online on our trip. In fact, they are continuing to do it now that we are back and it's a breeze. Love it!

[Bill P.]

I currently have 2 different ways that my rent gets to me. 1) If you are close to a local bank that I set up a special account, then you can go to the bank and deposit via special deposit slips I printed....kinda like coupons and I can see the info on them by visiting online banking; 2) I you are far away from the bank (I have a couple rentals out of state), then I use Rentmatic.com to whisk the funds into my account. Hope this helps.

[Richard Chang]

Originally posted by Shari Posey:
We went out of town for 5 months and provided all our tenants with payment slips and they mailed the checks directly to our bank. We only have 4 rentals but they sent them mostly on time every month and we viewed it online on our trip. In fact, they are continuing to do it now that we are back and it's a breeze. Love it!

Hi Shari,

That seems to the easiest solution even when you are not out of town. :)

So, I gather there is very little risk in having the tenants know you property bank account number ?

Did you give them stamped deposit envelopes too as an incentive ?

Thanks, LA Guy :D

[Richard Chang]

Originally posted by trustpointcorp:
I currently have 2 different ways that my rent gets to me. 1) If you are close to a local bank that I set up a special account, then you can go to the bank and deposit via special deposit slips I printed....kinda like coupons and I can see the info on them by visiting online banking; 2) I you are far away from the bank (I have a couple rentals out of state), then I use Rentmatic.com to whisk the funds into my account. Hope this helps.

Hi trustpointcorp,

Interesting points !

So, if I create a new account at a local bank ( local to tenants ) then they can easily make deposits ( by mail / in person / electronically ) to that account.

May I ask what are those special deposit slips ?

Normally, I could "fill out" a deposit slip account number and let them deposit to that account ? But I wouldn't know which tenant paid the rent. ( no way to add a comment on the tenant/property for which the deposit was made ).

Security wise, the tenants would only see the "new bank account".

Thanks, LA Guy

[Richard Chang]

Hi all,

Thanks for everyone's help ! :)

I leaning toward a separate Deposit Only checking account with custom deposit slips.
Need to see if Wells Fargo does this ...

This link helps:

http://www.ehow.com/way_6154653_should-give-deposit-slips-renter_.html

...
. Property owners who are concerned with potential problems arising from a tenant copying information from deposit slips can simply elect to open a deposit-only account at their bank (some banks will even provide preprinted deposit slips with the renter's information).
...

Considerations
•Buy providing renting tenants with deposit slips, a property owner is implying a level of trust between the parties. Though the option does give both parties flexibility, it carries with it a common understanding that both parties agree to a mutual trust.

For incentives, offer a small end-of the-year discount (such as a percentage off a month's rent or partial deposit refund) or appreciation gift (like a gift card or small consumer electronics item such as a radio or phone) for making full and timely deposits of rents due each month during the year.

LA Guy

[Jarrett Finley]

I use the deposit only checking account. Easy all around....I only have 2 rentals though!

[Nate Worcester]

My wife and I use erentpayment.com
Super easy to set up. You can do it for your tenant or they can create their own profile. Allows for automatic or manual payments. You can also send payments back to your tenant like security deposits.

It costs $3 per transaction but we are happy to pay it if the tenant sets up an automatic transfer.

[Marie S.]

Originally posted by Nate Worcester:
My wife and I use erentpayment.com
Super easy to set up. You can do it for your tenant or they can create their own profile. Allows for automatic or manual payments. You can also send payments back to your tenant like security deposits.

It costs $3 per transaction but we are happy to pay it if the tenant sets up an automatic transfer.

I use them too. The owner is super easy to work with. If you payment issues, they will check with you first before charging any crazy fees. The only problem I have is that there is no option to pay with debit or credit card.

[J Richardson]

I also use erentpayment.com and as other have stated it's 3 dollars a transaction. I've been using it for about 2 years now and have zero complaints.
I make the tenants sign the automatic drafts and it helps also, so that people who try to use last months rent can't.

I had one tenant contact the company and try to get them to stop the last month's rent, so that I would use the security deposit instead and they told the tenants that only the property manager can make these changes, so it protected me from the tenant screwing up the place and leaving me without last months check.

You can also push money back to them, so I inspect a property and I don't come with a check and when a tenant leaves I go online and push money back to them.

[RJ Lancaster]

These are all great methods. You can also send paypal invoices.

[LINK REMOVED] Free rental listings

[Aly W.]

I have 2 out of state rentals, and I have a deposit only account for them. I gave them the deposit slips and they go to their local branch and pay the rent. Each has a different rent so it's easy to track so far. I will do the same for any future local tenants as well.

[Brad Z.]

i use erentpayment.com as well. great customer service and $3 a transaction is definately worth the convenience. They even gave me a link to embed in my website for the tenants.

[J S]

Hi, I'm new, 1st post - so here goes!

I have several properties in AZ, CA and NV. I have a (business) checking account at a major national bank specifically for rent deposits.

Each month when we mail our rent invoices we include a pre-printed deposit slip.

Most of my tenants have accounts with the same bank, or we encourage them to get one. That makes it easy for them to transfer their rent.

We ask them to call the office when they have made their deposit each month. I find they still forget 1/2 the time to call. But I can usually figure out who paid what. For the moment at least I have everyone "trained" to pay on time or to make prior arrangements if they need a few extra days due to pay dates or whatever.

Eventually, when we get another multi-family I will separate the bank accounts to reduce confusion at our end. Someday I would like to be "big enough" to take credit card payments and/or direct deposit.

I have heard there is a potential for eviction related issues if a tenant makes a partial payment into the account. But I have a clause in the lease that says partial payments will not be accepted. Anyone can deposit into anyone else's account, there is no way to stop that. I think so long as a partial payment was promptly returned it would hold in court. I really need to get a lawyers advice on this in each state, before I run into a problem.

[Randal McLeaird]

I was just talking to my bank about this the other day. I personally don't want to go collect rent or go to the bank to deposit checks if I can avoid it. I give my account info to the tenant and my bank recently told me I can buy pre-printed deposit slips with the tenant name and property address and just give it to the tenant. Now the tenant either mails the check to the bank as mentioned above, or they go to the bank to make the deposit for me.

Right now I have it set up so they call or text me when they put the money in so I can check it off as collected.

I can have one single account and then review all the deposits at the end of the year or I can create a different account for each property. I think the different accounts would be good for tax time but it could be a headache to log into each account or make transfers out of each account each month.

I know there are some property management software applications out there but they can get pretty expensive so it's not worth it if you have less than 50 or so properties.

[Kevin Kaczmarek]

Use Lockbox Service at your bank if they offer it. If not try ACH from your bank.

[Evan Huston]

I use William Paid:
www.williampaid.com

Tenants can pay with ACH direct deposit OR from a credit card. They can even split up the rent between both or multiple bank accounts if they want.

Only $1.75 per transaction at this time.

Can't beat it! If you want to pay the fees for your tenants, you can apply credits towards their accounts.

[Curtis Williams]

Hey Richard,

There are a few ways to take online payments:

Use a property management application like Propertyware that handles everything surrounding your properties. Probably not a great tool if you only have a few properties but their online payment is setup using an online interface hidden behind a login page.

I'm pretty sure that the use of Google Checkout or Paypal would be fitting for rental payments. Both of these applications allow you to place a "widget" on your website or if you don't have one, a login capability.

Using these sorts of tools eliminates the old school need for in-house applications that would require SSL certificates (expensive) to protect the payment process on your website.

[Aly W.]

Originally posted by Brad Z.:
i use erentpayment.com as well. great customer service and $3 a transaction is definately worth the convenience. They even gave me a link to embed in my website for the tenants.

I just started using them at the beginning of this month and they are awesome! Great customer service by Rick, who actually called my tenant for me to explain exactly how the system worked.

When a tenant accidentally made a double payment, Rick canceled it and made sure the tenant was updated. I now have 3 tenants using it and all future tenants will too. $3 a transaction is a great deal!