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I prefer to get personal checks in the mail. If they don't arrive, I call the tenant to give them a chance to replace the check before the late fee kicks in. That's easy with a personal check. Just place a stop payment and issue another check. It's not so easy with a money order. Replacement of a MO is slow, so tenant might have to come up with additional money to get the rent paid on time.
Any tenant who ever gives me a bad check, though, must forever after pay with certified funds.
I have one tenant who pays with an automatic deposit into my bank. I had a tenant, in the past, who only paid with cash, so I had to drive out and meet him at his work to collect my rent. I'd just schedule a day of running errands for the day that his rent was due. I drive over, pick up his cash, and do my shopping.
I mail out rent invoices a week earlier that you tear off the bottom and tenant mails back with a check in a preaddressed envelope i provide with the invoice. When I get the stub with the rent check I stamp paid on the stub with a date and mail it back to them when the next invoice goes out as a rent receipt. Been working ok for me. I may offer the direct deposit route as well. But what I don't do is collect cash or go out of my way to go pick it up. Sticking to my laurels on having them follow the mail the rent route.
I was told that asking for tenants (and I'm reading all books) that the direct deposit route needs full account number (ours) and that's not a good idea due to security / safety issues with id and bank info.
If the tenant is tech savvy enough and willing they can use PayPal. As long as it's set up correctly there isn't a fee for the LL nor the Tenant (if it's linked to the Payee's Bank account that is - Debit & Credit cards are charged a fee for use). Also any bank info is cloaked through that type of account. I haven't use it yet, but I'm about to with the next tenant that I'm doing a background check on right now. She'll probably move in at the beginning of January if everything works out.
We have a little of everything. Most (90% probably) are either mailed to our office or hand delivered to our office. However, several who bank at our same bank do a bank transfer to our account, and one or two make deposits in person into our account.
We do not send out invoices or pick up checks from tenants. If we reach the point we have to try to collect in person, we go prepared to serve an eviction notice at the same time.
I'm very interested in getting into the paypal route, but haven't figured out how to get the money OUT of my paypal account yet without fees.
We also looked at taking credit cards, but the fees were cost prohibitive.
I'd really like to get into some form of 21st century acceptance method, but not one that is going to cost us $25-$50 per transaction in fees.
We have a little of everything. Most (90% probably) are either mailed to our office or hand delivered to our office. However, several who bank at our same bank do a bank transfer to our account, and one or two make deposits in person into our account.
We do not send out invoices or pick up checks from tenants. If we reach the point we have to try to collect in person, we go prepared to serve an eviction notice at the same time.
I'm very interested in getting into the paypal route, but haven't figured out how to get the money OUT of my paypal account yet without fees.
We also looked at taking credit cards, but the fees were cost prohibitive.
I'd really like to get into some form of 21st century acceptance method, but not one that is going to cost us $25-$50 per transaction in fees.
I didn't realize that you were only able to transfer up to $500 a month using PayPal back to your bank account? There is a method to remove the transfer limit, but they don't indicate anywhere if it cost anything to do it. I'll have to post back when I find out more. Incidentally though, the tenant can send money without a fee if they do it from a verified bank account using PayPal. There's even a place they can categorize it as "Living Expense".
I wouldn't do PayPal or credit cards. The tenant can challenge the charge and then PayPal takes the money back out of your account. Same with credit cards.
You could end up with a tenant moving out, challenging a couple of months rent and then you'd be fighting to get it back.
I've only got 1 tenant making an automatic payment and it goes into a separate account and the $ is removed immediately. But keep in mind, if you ever give the tenant a check for anything, he has your account number.
Last edited by oregonwoodsmoke; 12-05-2012 at 06:32 PM..
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