All Forum Posts by: Paul Ronto

I agree with @Kathleen Leary , check your local regulations. The HUD guidelines say 2 per bedroom, but most local ordinances restrict that much further. Like here in my town, we have a You+2 rule, which basically says that more than 3 unrelated adults would be illegal, so although HUD says 2 per room, if I had a 4 bedroom house, I could not rent to 8, I am limited to 3 unrelated. Now if it's a family that doesn't matter, and if they are under 18, even if unrelated, they would be covered if their guardians lived there and there were no more than 3 unrelated adults.

Anyway, my point is to check your local guidelines. 

Also, like @David Dachtera said, be careful how you reject applicants. If you are worried about it, have them apply and if they don't meet your minimum criteria then you can reject without fear of a lawsuit, like if they don't qualify based on your credit criteria or income criteria. But rejecting because they have 3 people would likely be discrimination in the eyes of the FHA.

Remember, always set your acceptance criteria, publish it with your marketing materials, and stay consistent. Run actual screening reports and be sure to have a legit application process, all this is designed to help you find better tenants, and stay out of the courts. 

Let us know if you have more questions, we're here to help!

There are many ways to take payment, cash, check, money order, ACH, credit card, wire transfer so you just need to understand the pros and cons or each so you can make the best choice for you. 

Cash: Cash may seem great, it's real and doesn't bounce, however, it usually means you have to meet your renter in person to collect which can be a pain and it's hard to keep track of. You need a system that you manually enter amounts and dates and it's easily lost without any way to recover those funds. I would warn against cash.

Personal Check: This is the number one way tenants pay rent. It's easy for renters and landlords. They can be mailed and deposited from afar. The downside is bounced checks which cost you, the landlord, extra money and time to deal with. They can be canceled by the tenant at any point as well.

Money Orders/Cashiers Check: These are considered safer than personal checks because you need to use verified funds to purchase them, however, although it's harder they can still be canceled before you deposit them and they are a burden for the tenant to get and for you to electronically deposit through most bank apps, which means you have to take a trip to the bank.

ACH: This is a direct deposit from tenant to a landlords banking account, is usually free to both parties but can take 4-7 days to process. It's easy but not quick.

Credit Card: Easy for everyone usually involved but there tend to be steep charges to the person collecting, typically 2-4% of the total amount, so on a 2K rent, you could be paying out 80$ just to accept payment. Also, Credit cards are easy to reverse the charges on up to 120-180 down the road. So although you get payment today, if your tenant decides to charge back 6 months down the road because they are unhappy with you about something they can, and most large CC companies like Visa protect the end user over the person collecting the payment.

Wire Transfer: These are bank to bank transfers and are usually the safest way to transfer money, they are fast, almost immediately in most cases and cannot be easily reversed. However, they tend to cost 20-30$ per transfer.

Anyway, there's the quick rundown on a few of the most common payment methods. Our suggestion is to find an online payment system that helps you navigate these and track them in one place. I would urge you not to share your personal bank information with a tenant like an account and routing number as mentioned above, some online payment systems out there let you sign up and submit all your bank info, and then invite tenants to pay. They are connected to your account but never actually see or have access to your sensitive banking info. 

Also, the time in which you receive funds is crucial as well so as you shop around be sure to find a system that allows you to get your funds as quickly as possible without charging you or your tenant for quicker service. 

Hope this helps! Feel free to reach out directly if you have any other questions about collecting rent payments. 

@Priscilla Z. 2 days. Feel free to reach out directly if you have questions, I'd be happy to chat. 

@William C. no I am not an attorney, which is why I said I was not 100% sure since these can differ for every landlord based on how their LLC is set up or their state or local laws, so I cannot give legal advice, but from my experience and from what my attorney has told me about my LLCs is that if renters pay by check, the checks need to be made out to the LLC business name, not to me personally. If they send me a check made out to me, I return it and ask for another, it's laid out in their lease so I don't have a ton of issues with that, plus I'm collecting online now so that's a thing of the past. Now my tenants pay rent online which directly deposits their rent into my LLC's business bank account. If I were to use a service like venmo I would be very hesitant to have it be my personal account. I think it's safer to have these transactions go directly into your LLC's account. Not sure if you can set up a business Venmo or not, the service I use is simple and easy to set up so no need to investigate further really.

@Jehan Jaleel sorry my last comment was removed my moderators, I'll connect privately with you. 

Like Josh said, yes, you are still liable for your mortgage, and all bills. Your property manager may notify you of missed payments if they are collecting your rent, most do, some do not (depends how you have your agreement set up), but they may not notify you if your tenant just leaves, since they are probably not checking if your tenants are actually present. The only thing your PM usually checks is that rent is paid every month, or books subs when tenants call in with a problem. After your PM helps you find new tenants, they are mostly hands off unless issues arise. 

If you want to be more involved in your property a better solution is to manage it yourself. There are tools to help you do this easily, and then you'll be in direct contact with your renters without the middle man, plus you save on the management fees. Just a thought. 

@CJ Ashton I live in a college town, so part of it is because students leave the first week of may and tend to be gone all summer, so tenants are looking for new places to live the next school year in March and April. After the first week of May my audience is literally cut in half, if not more. But no tenants have ever had a problem with this, they usually know if they want to stay another year, or if they are graduating and leaving, or want to live in a different part of town close to the bars, or close to the mountains or whatever has become important to them over the past year. 

Also, people looking 4-5 months out have been good tenants for me, the people I pick up 2-3 weeks before a needed move have tended to be lousy tenants in my experience, they typically are late for rent and a bit disorganized. Just in my experience, again, lots of college kids here. 

There are free options out there that do most if not all of what the paid options do. With nine units, paying for an enterprise level software may not make sense for everyone. I manage a ton of properties and I still have no need for paid solutions. Just thought I'd add my 2 cents in. 

@David Mathews I say a letter is fine, or if you communicate with them regularly a phone call works too, with a followup email so it's in writing. One thing I would say is to be careful how you take payment, giving out account and routing numbers can be risky. There are free products out there to help you collect rent securely without having to give out your account info. 

Regardless, online rent collection is the way to go for sure, saves you time and money, as well as helps to keep all your billing and accounting straight. 

There are many ways to take payment, so you just need to understand the pros and cons or each so you can make the best choice for you.

ACH: This is a direct deposit from tenant to a landlords banking account, is usually free to both parties but can take 4-7 days to process. It's easy but not quick.

Credit Card: Easy for everyone usually involved but there tend to be steep charges to the person collecting, typically 2-4% of the total amount, so on a 2K rent, you could be paying out 80$ just to accept payment. Also, Credit cards are easy to reverse the charges on up to 120-180 down the road. So although you get payment today, if your tenant decides to charge back 6 months down the road because they are unhappy with you about something they can, and most large CC companies like Visa protect the end user over the person collecting the payment.

Wire Transfer: These are bank to bank transfers and are usually the safest way to transfer money, they are fast, almost immediately in most cases and cannot be easily reversed. However, they tend to cost 20-30$ per transfer.

Anyway, there's the quick rundown on a few of the most common payment methods. Our suggestion is to find an online payment system that helps you navigate these and track them in one place. I would urge you not to share your personal bank information with a tenant like an account and routing number as mentioned above, some online payment systems out there let you sign up and submit all your bank info, and then invite tenants to pay. They are connected to your account but never actually see or have access to your sensitive banking info.

Hope this helps! Feel free to reach out directly if you have any other questions about collecting rent payments. 

@Sean Haardt just wanted to reach out and let you know there are free options that do most if not all what you need. You're on the right path though, thinking ahead and getting your systems set up right from the start is really smart, it will save you a ton of headache in the long run!