How would you know anyway? I am perfectly happy to collect my rents every month the way I always have from my tenants. My % of rent collection delinquency? Its none of your business. No I am not afraid to tell you. I just don’t want to.
This scenerio is too often the case. People do things the way they always have and cannot imagine that anyone else could know what might be a better way. Investors have rentals to make money. They are not in the business of providing free places for people to live.
So a long long time ago,the way we used to have to collect rent was to go to the property at a specified time. At my properties, tenants would put their checks in envelopes on their doors. But there were always about 25% of them who would not be there. So I would have to call them and go back to the property and try to collect again. On the 5th day late I would post a late notice, and a three day pay or vacate. I would usually get a phone call that the rent was there all along, it was just under the mat.. or some other lame excuse. Then we would fight over the late fees. Oh, and I am sure that if you are an investment property owner you have heard all of the excuses in the world. Like “I can’t pay my rent because my employer hasn’t paid me yet.” And then I find out that he hasn’t shown up for work for two weeks. I could go on with this thread, but I think you get the picture.
Now I am going to sing my usual song about the importance of tenant screening. Did you know that Experian is offering a way for all property managers and owners to report their tenants’ rent payments every month? It is a way to get good credit for paying rent ontime. Tenant screening will soon be able to show histories of tenants rent payments, like they show histories of your mortgage payments. So be good to yourself and screen every tenant over the age of 18 who will occupy the unit. Once that is done and you have your new tenant, it is time to consider automated rent collection.
Just think about this. For as little as $3 per month your tenant’s rent is collected on time, and deposited into your account and the accounting is done for you. You could never accomplish those tasks for that amount of money. The other consideration is that it is so convenient for the tenant to log into his account and make a rent payment. In our system, if a tenant does not have a computer, they can call in their rent payment by phone. No more checks to handle, no more deposit slips to fill out, no more trips to the bank and having to wait in line to make a deposit. Automated rent collection can literally save you days of time per month. How much is that worth to you.
But here is the really good news. When a property owner or manager uses automated rent collection the % of on time rent collection goes up to 99.5%. Statements are mailed or emailed to the tenant every month, so if you have variable charges to add, like utilities, they are added to the bill and the tenant can make a payment which collects that data and provides a receipt of all payments made. And if the tenant does not make the payment by the due date, a late notice is automatically sent to him. All of these records are in your history. So if you have to do an eviction, you have your data all in one place to support your efforts to get your rent payments.
Of course you have to have state compliant leases and they need to be enforceable. But that is a topic for another day. I do hope that each of you who reads this piece will see the amazing benefits that automated rent collection has for your future as a property owner or manager. We are always available to answer questions if you ever want to call. Check out our web site at https://smartpropertysystems.com.