Do any of your residents ever submit rent late? Do you ever have to track-down tenants to collect rent? Has a tenant ever bounced a check to you/your company?
If you answered “Yes” to any of these questions read on, because this new, and clever, use of technology may just help you collect more rents, and more importantly do so in a more timely manner and with less hassle.
Let’s revisit how rents are generally collected. First, most landlords/property managers require rent on the first day of the month. Most landlords also provide a grace period of between two and five days.
Tenants generally pay rent in the following ways:
- They bring money to you, or
- You meet them and receive money from them, or
- They mail money to you, or
- In some cases, landlords require tenants deposit funds directly into landlord’s bank
Tenants generally pay as follows:
- With cash
- With personal check
- With cashier’s check(s)
- Some landlords/property managers accept credit cards
For landlords and property managers with more than a few doors, collecting rent is a major task and business focus between the first and tenth of every month. Wouldn’t it be nice if the whole process could be a little easier, a little less of a fire-drill?
In a perfect world, all residents would be completely compliant and automatically pay rent, in full, on-time. Wishful thinking.
A couple months ago, a tenant called my cell phone to let me know he was going to text me. He asked if I “Texted”. I said “Yes”. Shortly thereafter, I received a text from his bank indicating I have been “Texted” rent.
How does this work? I wondered.
The text asked me to “Accept” payment – which I readily did. The next thing that happened was that I had rent in my rental checking account. It was that easy. So now, I encourage residents to text me rent.
- Instantaneous payment
- No waiting for US Mail to arrive
- No bounced checks
- No traveling to pick up rent
- Confidential and Secure
- Saves gas, time, and worry
I am not sure whether all banks offer this service. Chase and US Bank do.
Obviously, your tenant (i) Must have an account at one of these banks, or another bank offering this free service, and, (ii) They must have sufficient funds in their account to text you money.
If you are RECEIVING money (e.g. from tenants) it doesn’t matter where you bank. We bank at US Bank and Chase. Before you can accept texted funds, you need to go online and get set up to receive funds. It does not take long to do this (instructions below).
If you are SENDING/TEXTING money (e.g. to others such as kids, friends, etc…), once again you need to initiate this service from your bank’s website. We know Chase and US Bank offer this as a free service.
So, here are instructions for getting set up to accept money from tenants. We will show you how to do this for both US Bank and Chase Bank:
- Log into Online Banking at USBANK.com.
- Go into the PAYMENT CENTER (this is where you pay bills online)
- At the left you will see/click on: “PAY A PERSON” (See Photo below)
- To SET UP service to receive or text others funds, complete the information in this box, which directs where money will go when it arrives, or, which account it comes out of if you are texting others funds.
- To RECEIVE MONEY, enter your information into the box shown below with the notification message you receive that someone is texting you funds. Once you do the above steps, the funds will be ported into your account.
- Log into Online Banking at Chase.com.
- Click on the PAYMENTS & TRANSFERS tab at the top, then click on the CHASE QUICK PAY tab below this (see photo below). You will be asked a few questions about (i) which account you want incoming funds deposited too; and, (ii) which account you want to debit if you are texting funds to someone else.
- If you are RECEIVING funds (e.g. from a tenant), and those funds will go into your Chase account, then you will receive a notification from Chase (via text and/or email) indicating your funds are waiting to be claimed. At this point you will ACCEPT the funds.
- If you are texting/sending funds to others, you can do so in about 2 clicks on your phone or computer.
- Once you text funds to another person/company, you receive confirmation that the other party has been notified and the funds are there for them, pending acceptance of those funds by the other party. Like you, they need to be Set Up ahead of time with their bank to be able to receive funds in this manner.
Good luck getting this going. It takes a bit of effort to set this up as well as to communicate this new method of paying to your residents. But, once set up it is much easier for everyone.
Article Submitted By KRHA Member Jim Chadderdon