Hey Youtube,
Today's question is "What are some of the best ways to go about collecting rent payments from tenants?"
When you're just starting out as a landlord, one of the biggest challenges can be how to go about collecting rent payments from tenants. Do you take cash, check, electronic deposit? The answer to all of the above is, Yes! But as we've discussed in earlier videos, you want to get systems and processes and place to help streamline your business and make things easier on yourself.
Now let's take a look at some of your options.
Cash is king! But taking cash can also become a liability. One problem is that it can be hard to track. Especially if you have investors in your business, losing track of the cashflow and prove to be very problematic.
Checks and money orders are along the same account. We still accept them but the goal is to get OFF of that system and have everything done digitally.
We're looking to get all of our payments received online. There are a variety of apps out there to choose from. Do the research and find out what works best for you. Having them pay online through your website is a great option. It's free for the tenants if they're doing an ACH, they also have the option to use a credit card and you can set it up where the fees are charged to the tenant as a convenience fee.
The goal is trying to get the rent payments into your account without putting in a ton of effort. Such as collecting checks or cash and takin those to the bank. Instead look for ways to scale. The biggest opportunity right now is tenants paying through your website using ACH.
Think in terms of the future and sustainability. it might be easy to handle collecting cash when you only have 3 units, but when happens when you grow your business to 30? Put systems in place that allow less effort on your part with the potential to scale to a huge level.
As always, please email us any real estate questions to HelpMe@DeRosaGroup.com and we will answer them on an upcoming episode!
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Matt & Liz, founders of DeRosa Group, were recently second-time guests on the BiggerPockets Podcast.
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