Rent collection

[Haimr]

Currently I do have multi family building in Ontario and I keep looking for system to collect the monthly rent.

Some tenant paying rent through post dated checks other paying by cash.

My property management collect the rent door to door which result of time consuming as well as headache and accounting mess because mostly there is need for one more round to collect the rest of the rent.

I am looking for other rent collection methods which I can a adopt





Haim Rabinoviz

 

[GarthChapman]

Post dated cheques from all Tenants and a firm policy of charging late fees and NSF fees. But with proper notice to all tenants as to your policies, and conforming to your leases and Provincial regulations. Maybe give them one strike each as a transition assistance to your new policies.
Hope that helps,

 

[Haimr]

Thanks Garth for your advice, your suggest is to make current tenant to start paying by post checks.

I will need more clue on this, Ontario ORHT rules doesn’t allow forcing tenant paying by post checks,

more then this the ORHT deprive late payment charge, yes I change my contract to reflect discount for
paying on time but this apply only for new tenant.



Haim Rabinoviz

 

[RussellWestcott]

Haim, you may want to dive into the `members-only` section and run a couple of searches on this topic, as there are many discussion threads going on in there around this topic

 

[terri]

QUOTE (Haimr @ Dec 12 2007, 09:19 AM) Thanks Garth for your advice, your suggest is to make current tenant to start paying by post checks.

I will need more clue on this, Ontario ORHT rules doesn`t allow forcing tenant paying by post checks,

more then this the ORHT deprive late payment charge, yes I change my contract to reflect discount for
paying on time but this apply only for new tenant.



Haim Rabinoviz

some of my tenants do automatic deposit into my bank account every month. This is my personal favorite, but it only works when we both bank at the same institution. If you don`t bank at the same institution there is also wireless email transfers that can be done between different banks.

I recently took possession of a property that had existing tenants and one of the tenants does not have a bank account, the previous landlord lived out of the country so he made a deposit every month into her account. For the first couple of months I tried collecting cash, but soon put a stop to that, way too much work, I`m going to try the monthly deposit route and see how it goes.

I don`t know if anyone has ever had problems or issues with giving out bank account information to tenants. I haven`t heard any horror stories myself and quite like not having to make that trip to the bank or bank machine to deposit cheques. I personally would be very happy if all my tenants paid this way and I didn`t have to deal with post dated cheques ever again.

hope these suggestions help,

Terri

 

[Thomas Beyer]

we use EFT (electronic fund transfer) as the DEFAULT. It gets "sucked" out of the tenant`s account every month on the 1st.

Hard to convince existing tenants to sign up, so an incentive is required: $300 might do the trick or a new carpet or a new fridge.

For new tenants we do this: EFT is part of the lease, with a $75 incentive such that the lease states st.th like this: The base rent is $875. If you sign up for EFT we give you a $75 rebate. .. Thus, we collect $800 automagically !

We also used a debit card and credit card machine, which usually makes sense only for 24+ suites or bigger due to monthly and ongoing costs. We do not take cash anymore at all.

 

[Haimr]

Thank you, thank you that’s exactly what I looking for

Those idea’s fueled my mind ,



Terri: what about open account for deposit only and provide this account information for tenant, after deposit done you moves the deposit to the relevant account you can do it from home using internet.

I do have some tenant which doesn’t have bank account I will use this method for those tenant



Thomas, this is GREAT idea I real like it

I Google EFT and found tons of information I will dive in this deeply, it sound like perfect solution no hassle very safe and ON TIME payment.

Yes I agree with you this will be hard to implement but after it is Done the property roll it self.



I found that collecting rent system is so important in particular when you need to manage large number of units ( which of course it is proportion for each of us).



Once more thanks for the idea.

Haim Rabinoviz

 

[Nir]

Thank you Haim for the great question and all the experienced invetors above for providing such valuable information. I will use that too.. Cheers.

 

[Thomas Beyer]

QUOTE (investmart @ Dec 13 2007, 12:10 AM) .. EFT ..

talk to your existing bank and ask them to give you the EFT form .. essentially each tenant has to give you/the proeprty manager permission to transfer money out of their account .. and some tenants feel that this volates their privacy .. so for an extra $75 we do take your cheque/debit/CC .. but we prefer to reduce this tedious monthly rent collection .. this is common practice in Europe where people have long term leases .. new here @ home ..

 

[mikecunning]

All of our leases stipulate rent must be paid by EFT. No more cash to get `lost`, no more cheques to bounce.

 

[bmirks]

QUOTE (thomasbeyer2000 @ Dec 13 2007, 10:16 AM) talk to your existing bank and ask them to give you the EFT form .. essentially each tenant has to give you/the proeprty manager permission to transfer money out of their account .. and some tenants feel that this volates their privacy .. so for an extra $75 we do take your cheque/debit/CC .. but we prefer to reduce this tedious monthly rent collection .. this is common practice in Europe where people have long term leases .. new here @ home ..


There`s a company called BeanStream (www.beanstream.com) that will process EFT, debit, and credit card transactions all over the web. They are well priced, and very easy to use. Worth checking out.

 

[timk519]

I find the EFT issue rather strange - I transfer money between accounts in different banks all the time.

If the tenants don`t want "you" withdrawing funds from their account, then they should only need to go to their bank w/your bank account information in order to make your business a "payee", and then setup automatic payments.

 

[Merriora]

Another Option could be to use PayPal

I`ve never used it for rent collection, but I use to run a site that had a monthly or yearly fee which was automatically deposited into my account. I can`t see why it wouldn`t work for renters unless Paypal has restrictions against its use (which I doubt)

Fee`s max out at 2.9% + $0.55 CAD

So $1000 rent per month would cost you...

$29.55/month


Is anyone currently using this option?

https://www.paypal.com/row/cgi-bin/webscr?cmd=_subscr-intro

 

[terri]

QUOTE (timk519 @ Dec 13 2007, 08:47 PM) I find the EFT issue rather strange - I transfer money between accounts in different banks all the time.

If the tenants don`t want "you" withdrawing funds from their account, then they should only need to go to their bank w/your bank account information in order to make your business a "payee", and then setup automatic payments.

how do you transfer money between accounts with different banks? I`m with rbc and Td and I was told I couldn`t do it. What banks are you with that allow it?

Also wondering....Has anyone ever had problems with giving out their bank account information to tenants?

I`m starting 3 new leases for jan 1 and would love to start the new year phasing out post dated cheques but I`m also wondering... when it`s not set up as automatic withdrawl and the tenant actually has to do a deposit every month, does anyone ever have a problem with this deposit being late or the tenant needing a reminder?

curious,

Terri

 

[Haimr]

Hi Terri,

Currently I am in process to get more information (from TD business department) about two methods I would like to start using.

First using EFT I am looking to understand TD procedure as well as all forms needs to be sign and fee associate with this transaction.

Second method is using TD deposit card, which means you don’t give tenant any information about your account, you provide them with deposit card and they deposit rent, cash, check whatever directly to your account.

When I will get this information I will publish it here.



Regarding payment on time there is lot of discussion on this see example Collecting Rent On Time bottom line I believe there is need to educate tenant to fit your collection system



Haim Rabinoviz

 

[Thomas Beyer]

The bank has these ETF forms .. we use ATB .. so we use an ATB form .. essentially it is a pre-authorized debit for a certain amount .. it allows us to pull $s from the tenants bank account @ RBC, TD, or wherever .. it is part of the lease application .. fill out all these forms ..

ensure that the lease states s.th. like "The monthly rent is $875. We will give you a $65 credit if the rent is paid on the 1st of the month via ETF". The attached form then will state "$810" .. as this is the net rent the tenant pays ! It is also a great screening tool .. if they object you or your onsite manager says s.th. like "oh, you`re telling me that you have problems with paying on the first .." .. and most folks will then say "of course not .." and sign it ..

 

[terri]

QUOTE (Haimr @ Dec 17 2007, 10:28 AM) Hi Terri,

Currently I am in process to get more information (from TD business department) about two methods I would like to start using.

First using EFT I am looking to understand TD procedure as well as all forms needs to be sign and fee associate with this transaction.

Second method is using TD deposit card, which means you don`t give tenant any information about your account, you provide them with deposit card and they deposit rent, cash, check whatever directly to your account.

When I will get this information I will publish it here.



Regarding payment on time there is lot of discussion on this see example Collecting Rent On Time bottom line I believe there is need to educate tenant to fit your collection system



Haim Rabinoviz


thanks Haim,

I`ll keep my eye on this to see what you find out. The deposit card sounds really interesting!!

T.

 

[Haimr]

Here what I found.

Using EFT with TD, it`s around $50 per month (depend on your transaction amount) per account + $250 account setup (they will reduce it to $150), so my thought is having one account for all collection and then transfer it to the relevant account.

Here is how it`s work, you need to setup file which will include tenant account information + rent charge amount, when you submit this file it will "suck" the charge from relevant account.

I also check ORT web and you can`t force tenant to sign this form.

So for new tenant I make the contract change which include Thomas suggest.

The challenge is with taking over new property as well as existing tenant.

For new property I start preparing tenant package which include "MY RULE" I will still need to get there information and sign which is not easy to get.

Regarding existing tenant I still need to come with creative idea.



Deposit card, TD doesn`t use this method so I will keep looking with other banks.





Haim Rabinoviz

 

[timk519]

QUOTE (terri @ Dec 15 2007, 11:31 PM) how do you transfer money between accounts with different banks? I`m with rbc and Td and I was told I couldn`t do it. What banks are you with that allow it? In one case - to transfer $ from my company account to my account (I own my own company and pay myself), the bank had to set my personal account as a payee of the business account.

To move money to/from my Manulife business account to my TD business account, it was just a matter of following some web pages. Or I might`ve talked to a Manulife rep on the phone - I don`t recall which, which to me means it was pretty pain-free to do.

 

[Dan_Eisenhauer]

From past experience, I have found that TD and RBC are very expensive to operate EFT with. Check your local credit union, as I think fees will be about 50% less than chartered banks. Each also charges you the same fees PER ACCOUNT . If you use more than one bank account, set up one "master account" for the EFT, and then transfer funds from that account to the appropriate account.

When setting up EFT, you automatically transfer funds from the tenants` banks to yours, with about a 24, maybe 48 hour delay. (Same bank it is instantaneous.)

ING allows you to transfer funds from one bank to another. I have done it only once, and do not recall what they charged. Be careful on inter-bank transfers. The fees are often very high.