Originally posted by @Pete Harper:
Ok, I have a dilemma. How is the best way to collect rents if the majority of your tenants don’t have bank accounts. I know it is hard to believe in this day and age but there are a significant number of people who do not have a bank account. They are used to doing everything in cash. Most don’t have smartphones or other gadgets. All the latest Gee-wiz technology is foreign to them.
I’ve finally convinced everyone that I don’t take cash. Their solution is to buy a money order at the corner store. I tried getting them to mail in payments but it takes over a week to travel the two miles from the apartments to my PO Box. I know we’ve all heard the check is in the mail but in this case it is true. All local mail is sent 70 miles North to Dallas where it is processed and sent back to the same post office where it was sent. Finally a postmaster places the envelop in my PO Box. With the time lag we are well into the month before I can be sure rent was payed.
My current solution is to stop by and pick up rent in person. This works for four units but Isn’t going to scale to the 12 units I close on at the end of the month. What are my options? I don’t want people coming to my house, I don’t have an office. What are your thoughts on a lock-box on site? Any other suggestions?
Pete, I feel your pain with local mail delivery. It is exactly the same in my small town. They send our mail 70 miles west to be sorted, then they drive it back, past our town to the PO in the next town. A worker there brings it back to our PO, then it goes in our box. Such a great improvement over the old system. :-(
Here is my solution:
#1 - Rent is due in my hand on the 1st, late fee applies after 12 noon on the 5th. The only exception is Cozy. I consider that received when paid, even though it doesn't hit my bank account for several days. (I consider it an incentive for paying online.) I make a firm point of explaining this to the tenant at lease signing. If they want to mail a check or money order, send it a week early.
#2 - Our postmaster is sympathetic to our struggle with delayed local mail service. If the tenant takes the envelope in to the desk and asks, they will put it directly into our box instead of sending it off to be sorted. I asked the postmaster if this was a nuisance for them, because the last thing I need is for them to be annoyed at me. She assured me that they do this for a lot of tenants in town, and it was okay. We are a small town - about 2100 population.
I know that some allow/encourage tenants to deposit directly into their bank account, but I do not. The receipts our bank prints out have our account balance and my tenants don't need that information.
