how to collect rent on time, every time
TRANSCRIPT
RENT COLLECTION (ON TIME, EVERY TIME)
BY LUCAS HALL
1. Fits your lifestyle
2. Easy to maintain
3. Steady cash flow
4. Gives you more time
5. Keeps tenants happy
RENT COLLECTION
3-STEP APPROACH1. Select Quality
Tenants
2. Set & Enforce Consequences
3. Automate / Make it easy
$
LUCAS HALL, PMP• Landlord, 10+ yrs
• 5 Prop / 3 Sta. / 17 Res.
• IT Consultant, DoD
• Founder, Landlordology
• Chief Landlordologist, Cozy
Modern Property Management Software
www.cozy.co
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www.cozy.co
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Education
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RENT COLLECTION
3-STEP APPROACH
1. QUALITY SCREENING
Are theyable & willingto pay rent?
MY STANDARDS1. Income = 2-3x rent
2. No evictions, ever
3. No convictions last 2 years
4. No violent / armed crimes, ever
5. No or low credit card debt
Renters with no income are fine people, but they make horrible tenants.
- Every Experienced PM, Ever
“
2. SET EXPECTATIONS
(Be stern, but polite)
If you can’t pay,you can’t stay!!!“
SET EXPECTATIONS1. Use a rock-solid lease (stick to it)
2. Transparent = Trust-worthy
3. Review lease w/ applicants
4. Emphasize consequences
POSSIBLE CONSEQUENCES1. Hefty one-time & daily late fee
2. Lease termination
3. Eviction / Judgment
4. Damage to Credit
5. Collections / Garnishments
SUMMARY OF FEESRent For Premises $ 2,668.00
Security Deposit $ 2,250.00
Sub-letting Fee $ 500.00
Smoking Damage Fee $ 500.00 min
Month-to-Month Option $ 500.00
Initial Late Charge 5% of rent
Daily Late Charge $ 20.00
Bounced Check $ 50.00
Early Termination Fee 2 months rent
3. MAKE RENT AUTOMATIC1. Use a tool that has automatic,
recurring payments (Cozy)
2. Require usage in the lease - thus violation
3. Must allow another form of payment besides cash or electronic transfer (Civ. Code §§ 1947.3(1-2))
“RENT” CURRENCY
CASH
CASH1. Legal tender
2. Prone to theft
3. Difficult to prove in court
4. Attracts a rough crowd
PERSONAL CHECKS
CHECKS1. Widely accepted
2. Hassle to handle
3. Delays cause insufficient funds
4. Used by scammers
CERTIFIED CHECKS
ELECTRONIC TRANSFERS
ELECTRONIC TRANSFERS1. Online Rent Payment Software
2. ACH (between banks)
3. Internal Bank Transfers
4. Wire Tranfers
5. ePayment Websites (PayPal, etc)
6. Apps (Venmo, Square Cash)
CREDIT CARDS
CREDIT CARDS1. 2-3% Fee
2. Chargebacks / Disputes
3. Merchant Accounts
4. Terminals
ON-SITE LABOR
OFF-SITEGOODS / SERVICES
GOODS / SERVICES1. Tradesman service
2. Cars
3. Valuable art / jewelry
4. Livestock
5. Don’t do anything illegal
HOW RENT IS PAID
ONLINE RENT PAYMENTS
ONLINE RENT PAYMENTS1. No more checks
2. Can be automatic
3. You get paid faster
4. Easier for everyone
5. Decrease in late rent
BANK TRANSFERS
BANK TRANSFERS1. Requires you to give our Acct #
2. Unauthorized Payments
3. Thwart Evictions
4. Transfer Limits
ONLINE BILL PAY
ONLINE BILL PAY1. Online for Tenant, NOT Landlord
2. Still have to deal with checks!
POSTAL SERVICE
POSTAL SERVICE1. Unforeseen delays
2. False Assumptions on Due Date
3. Unnecessary Risk
4. Self-Addressed Stamped Envelopes
IN PERSON
IN PERSON1. Sets wrong precedence
2. Hassle for Tenants
3. They will avoid you
4. Proper Notice
DROP BOXES
DROP BOXES1. Adds delay
2. Prone to theft / angry tenants
3. No receipt or proof of delivery
BANK/ATM DEPOSIT
BANK/ATM DEPOSIT1. Immediate Receipt
2. Give out bank account #s
3. Deposit-only cards
4. Unauthorized Payments
5. Thwart Evictions
LUMP-SUM PAYMENTS
LUMP SUM PAYMENTS1. Effective for unqualified tenants
2. Prepaid Rent - California
• 1 Mo. for < 6 month lease
• No limit for > 6 month lease
• Civil Code Section 1950.5(c)
POST-DATED CHECKS
POST-DATED CHECKS1. 12 checks given at lease signing
2. Does not develop trust
3. Hassle to keep
4. Not “pre-paid” (sort-of)
3-STEP APPROACH
Modern Property Management Software
www.cozy.co
