If you’re a new landlord or beginning property investor then chances are that you have more than a few questions, and rightly so. Property management is a complicated business, and if you don’t understand the rules, you could be facing a lawsuit. Here at SJA, we’re here to help you with all of your property management needs, from professional rental management to just helping you out with questions. Here’s an answer to one of the most common questions that we get.
How Do I Receive Rent Funds From Tenants?
If you’re starting out and you’ve never charged rent then you might not have any idea how to set up the rental payment process. Fortunately, there are a couple of different options that you can go with depending on what is convenient for you.
Some landlords like to have tenants drop the rent off once per month in the form of cash or a check, and sometimes even accept payment via credit card. This requires you to have an office that the tenant can visit, and requires you to set office hours for a week period around the time when the rent is due so that tenants can pick a time to drop the funds off. This is the most common method of rent collection for smaller rental facilities, but it is the least convenient for most landlords and tenants.
You can also ask tenants to send the check or payment to you via snail mail. This method is more convenient than drop offs because you don’t have to be around to collect it unless the tenant uses signed for mail. However, it is inconvenient for the tenant, and you run the risk of the post office loosing the money.
Online payments are probably the most convenient rent collection method for both tenants and landlords, but they are also the most difficult to set up. You can ask for online payments a couple of different ways. Some of the most popular transfer services include PayPal, PopMoney, Western Union, and Chase Bank Transfers. Your own bank may also have a bank transfer service that is unique to the bank. You can ask to set it up and then look for it under your online banking options.
PayPal is the safest online payment method because you don’t have to give the tenant your bank account number. However, it also has the highest fees. You can expect to pay between 3 and 8% off of each transfer you receive.
Direct Bank Transfers, such as PopMoney or a transfer service offered by your banks online banking service, is the best way to go in terms of fees. You do have to give the tenant your bank account number, or set up your email with PopMoney and ask tenants to use that.
If the Tenant is Late
If the Tenant is late with the payment then you have to contact them to ask for it. Keep in mind that if you want to evict the tenant for not paying then you will also have to ensure that they receive a written complaint of no payment. Consider calling the tenant first to see why they haven’t paid, and then make a decision based on that data.
With a Property Manager
If you’ve chosen to hire an Issaquah property management company then all you have to do is wait for them to send you the money. They’ll ensure that all of your tenants pay, and that you get your money on time every month.
Need any more help with receiving funds from your tenants? Contact us at Sterling Johnston to talk about how we can help you with managing your rental properties.