Don't Waste Gas Collecting Rent
As landlords, we do our best to keep expenses down. I think the majority of professional landlords have streamlined their operation enough to minimize the actual driving around to the properties for the undertaking of various tasks. One of those tasks for many landlords is, believe it or not, collecting rent in person. I am amazed at the amount of landlords I speak with who still pay a personal visit to the tenants every month to collect the rent.
In today's economy with rapidly rising gas prices, more and more people are seriously thinking about ways of saving gas, time and money.
If you are interested in running your rental operation as professionally as possible, please consider stopping the personal visits to collect the rent. (Of course, don't stop collecting your rent if going there is the only way you will get paid!) All I'm suggesting is that you set up your tenancies from the beginning with an efficient system for paying the rent. There are a few different ways I have seen this done successfully:
- My way. I supply the tenants with a Custom Payment Booklet along with enough pre-addressed envelopes to send to me each due date throughout the lease term. This method of rent collection works well for me, while at the same time, it limits the tenant's direct contact with me. It's not that I’m antisocial. It's just that I have found that you need to keep a professional arms length distance from your tenants if you want to maintain a professional relationship and continue to command the tenants' respect. I've experienced the art of rent collection in various forms and the payment slip accompanied payment sent to my post office box each month has proven to be my most successful method.
- Electronic Direct Deposit. In this new wondrous age of computers and high technology, many landlords are taking advantage of banking online. It is amazing what you can do with a computer! Now I'm happy to say, I'm saving gas by not running to the bank all the time to transfer money or make withdrawals. Many computer savy landlords are even collecting their rent electronically directly out of the tenant's bank account. They arrange scheduling the monthly payment from the tenant's bank into landlord's bank on a specific day each month. If the landlord checks his account online and notices the deposit has not been made, the tenant is liable for late fees and possibly other penalties.
- Pre-written Checks in Advance Believe it or not, I have seen this work well on a few different occasions. The landlord requires the tenant to give him a check for each month of the lease term in advance at the lease signing. Every check is dated for each month and signed. It has worked successfully and I have only seen it go bad once when a landlord didn't screen well and the tenant had to be evicted. I have my doubts about this method for the reason that a postdated check constitutes a creditor – debtor relationship. In such a relationship, the writing of a bad check is not illegal. It is merely a defaulted payment on a loan. I'd rather have the law on my side when it comes to enforcing my agreement and keeping liability on the tenant.
By using one of the above methods, you'll be able to save gas money and time by cutting out your need to visit the tenants personally.
About the author:
As a Real Estate broker / investor in New York, John Nuzzolese has been involved with rentals and investment property since 1979. Besides owning and operating two real estate businesses, he is president and founder of The Landlord Protection Agency, Inc. , an organization specializing in helping landlords and property managers avoid the hurdles and pitfalls and expensive blunders common when dealing with tenants.
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