First Timer: Security Deposit, Rent in Cash, and more

[Hernan B.]

I am officially in the process of collecting rent for the first time ever. I have collected rent from one unit in the form of a money order and a second in cash. What is everyone's strategy to collecting rent in cash? Avoid it or collect it. It apparently costs less for the tenant since they need an additional $1.75 or so to get the money order and I was already at the building so I told them I would take the cash (because lets face it cash doesn't bounce), but i did not have a receipt. We agreed that I would write on a piece of paper that rent was paid in full and on time and I signed it. Do people usually have a receipt book in case of a situation like this? The third unit I called today and they said they will have it Monday, furthermore, they agreed to pay the late fee of $50. The fourth unit I cannot seem to get a hold of.

Basically, my plan is to upgrade each unit (4 unit building) and get better tenants. In order to do this I am I handing out 28 notice of month to month lease termination and to vacate or apply for tenancy. The first unit I did this to was the unit that paid in cash and said they would reapply but they would not pay another security deposit. I was told by the seller that there was no security deposit and I signed off that I would not receive any. I told the resident that his security deposit, if there was one, was in the hands of the previous owner and that was his responsibility. However, I am also a little reluctant to kick the resident out right away since they make up 50% of my units that paid on time. Should I hold off to kick them out until I remodel the other units and keep them on a month to month or will this bite me in the butt in a few months when I hand them the same notice? I still have the right to make them reapply and demand a security deposit once I get them on a new lease, correct?

How many tenants should I hand this notice out at a time? When I first bought the building I had a vision to kick them all out at the same time, then I felt two at a time, now I feel like I should just do one at a time starting with the late unit that I cannot get a hold of. How difficult is it going to be to get them out? In your experiences will this end up involving a lawyer? ...so many questions.

[Chris Weiler]

I am not a fan of cash payments for rent. Where's the proof if your tenant states they paid you and they haven't? I prefer a paper trail and insist on money orders. I would even go as far as driving the tenant myself to get a money order.