Successful landlords use various strategies to collect rent on time. Here are 12 different strategies.
1. Provide Envelopes
When I give keys to a new tenant, I give them 12 to15 small yellow envelopes with my business address printed on it. Each month, my tenants buy a money order and a 48 cent stamp, and mail it to me using the 6 x 9 yellow envelopes. These envelopes are a bright Canary Yellow for a reason – they are a constant “visual monthly reminder” for the tenants to use only to pay rent with. Plus, when the postal carrier delivers mail to my mailbox, I always pick out the yellow envelopes first.
2. Send Monthly Bills
I send out a monthly bill every month to my tenants with a self-addressed, stamped, return envelope. They tear off the bottom portion of this bill and mail it back to me in that envelope. Also, on that tear off portion of the bill, there is a place for them to write in any repairs/concerns they have. I keep these stubs on file. If it ever came about that they complained I didn’t fix things to either myself or a judge, I have proof that they have had the opportunity to tell me each month that there was a problem and neglected to do so.
3. Tenant Deposit Account
Select a popular bank (more branches the better) in your area, open a tenant deposit only account. (Tenants feel their money is more secure if they make a personal deposit and get a receipt). Now all you have to do is go on line and check if the tenant made their rent deposit. And … you can do this in your PAJAMAS!
4. Drop Box
I have a locked drop box at my multi-unit building. Give everyone the option of mailing to post office or dropping money order in drop box. I only have one person who mails. Everyone else drops theirs in the box. I just make one stop at the box and pick up the envelopes.
5. Automatic Withdrawal
Automatic rent withdrawal on the 1st from their checking account. So far – no problems. No more going to the post office or bank. I know by the second if they don’t have money. So far that hasn’t happened. If it does, three day notices will go out by the second.
6. Automatic Bank Drafts
Jeffrey (Mr. Landlord), taught me about automatic Bank Drafts. I will be forever grateful. I now get an email from the bank with routing codes. I will never argue with such a simple system.
7. Direct Deposits
I’ve been using ClearNow (directrentdeposit.com) for five years now and require tenants to participate with direct rent deposits as part of the lease agreement. Love it!!!
8. Separate Bank Accounts
Separate bank account for each unit and they deposit it right into the account each month. Works like a charm with properties in five states.
9. Post-Dated Checks
I get one year’s worth of monthly POST-DATED checks from each tenant. No chasing around. I deposit them the first Saturday of each month. So far it has been great (two years and counting).
10. Have money orders delivered to The UPS Store lockbox.
11. Designated Deposits
Locally, our bank will now do “Designated deposits”. The tenant tells the bank teller the Landlord’s name, the teller looks it up, makes the deposit and adds a memo to the deposit with the tenant’s house number. This shows on the deposit receipt to the tenant, and shows online for the landlord.
12. Custom Deposit Slips
I have custom deposit slips with a code for each rental unit on it. I give the deposit slips to the tenants; they then deposit the rent in the bank. I check the deposits on line which also gives me date and time stamps. IF THEY’RE LATE they pay late fee. I’ve rarely had a problem.
Bonus Tip: My tenants know that if the rent is not paid on time then they are getting a Pay or Quit notice and the eviction process starts. (No games). Stay on top of your tenants and notices…period!
Saying Thank You Can Add to Your Rental Profits!
A real estate investor recently remarked to me regarding landlording: “I do not enjoy the people! Very demanding and I never hear a thank you!” My response: “Just a thought. When was the last time YOU thanked one of your residents for being one of your valued customers.”
It seems to me that often landlords have the attitude that residents owe us something, when I believe the opposite is true. We do not show enough gratitude to residents for residing in our properties. And, then we are surprised that they end up moving after just one year. Customers/residents stay longer when they feel appreciated. Not only that, when people feel appreciated, they are far more likely to remain loyal to you and refer other residents to you.
Management tips provided by landlords on www.MrLandlord.com. To receive a free Rental Owner newsletter, call 1-800-950-2250 or visit their web site at www.mrlandlord.com where you can ask landlording questions and seek the advice of other rental owners 24 hours a day.