Tips and Tricks on Rent Collection
Rich: Tried to get us out of here on time is rent collection methods. Who likes collecting rent? Three people. Okay, fantastic. This is what I consider to be the most exciting part of property management in my landlording business, so I’m going to get right into it. A couple of things. Who knows what this is?
Rich: This is like the first telephone. Would anybody in their right mind use this if they have other choices? Probably not. We’ve moved on, right? So I’m going to go through a couple of different methods. There are 10 different rent collection methods in here. I have used all of them. As we go through, they’re going to involve a little bit more technology, a little bit easier for you. Who likes to waste their time doing stuff they don’t have to do? Nobody. Okay, terrific.
Doug: Excuse me. Handout for later.
Rich: There is a handout but you don’t have to have it right now unless you want to take notes on it. Who knows what this is?
Rich: Okay, so this is an improvement over the last one, right? But still probably not as good as this, right? Can we all agree that this is the direction that things have gone, that this is better than the other two? Okay, so if you follow me on that concept, then here we go.
Here’s the old-fashioned way of collecting rent. You go and knock on the door and say pay me. You don’t want to run across this guy [laughter]. He was not expecting visitors, okay certainly none of them with their hand out looking for money. Okay, this is one way to go about it. It’s very time consuming on you. It puts the burden on the tenant. This is old fashioned. You could have done this in 1880.
Or you could have them come to your office. I don’t know about you, your office I don’t know it looks like this. My office looks more like this [laughter]. My office is in my house. I don’t really have an office. I don’t necessarily want people coming over. I don’t know how social you guys are with your residents, but I don’t have to do anything, right? If I were to make them come to my house or my office, but they do. So anything that you do that is more effort for somebody, the less likely they are to do it, true or false?
Rich: Absolutely true, right? So here’s them coming to the office to pay the rent, okay. Everybody has to leave their house including the kids. They don’t have a babysitter. So this is me. Those of you who can’t read that in the back, it says, “I feel lazier than the guy who created the Japanese flag.” Here’s the Japanese flag. This is more effort that I’m interested in. If I could have made it all white, that would have been my flag, okay? I don’t want to do any of this crap.
So we’re going to move on to a little bit more technologically savvy ways or a little bit more automated, a little bit less effort.
So you can have them write checks. You can have them write 12 checks in a row, and you can collect, have them make it out for January 1st, February 1st, March 1st, sign the thing, tear it off, put them in a pile, hand them to you. Okay, now they don’t have to worry about mail. You already have all the rent for the year. It’s just up to you to get it to the bank and deposit it. So a little bit less effort. Anybody who have done this before? Okay, a couple of people, right? Okay, so this is very low-tech. This is very easy.
Now you can have them take their checks to the bank. When they do this, you can log on to your online banking and you can see a lot of banks will show you something that looks like this. Okay, so you can have them not even give you the check; you can have them take the check to the bank. Here’s everybody going to the bank. Now you just have to log on to your online banking and see who paid the rent anyway. This is a little bit less effort than the other ones, right? So this is the direction we’re moving.
Or you can have them mail. You can have them give it to this guy or better yet, if you want to combine those, you take the 12 rent checks that are already made out. You put them all in envelopes at the beginning of the year with stamps on them and then when the 1st of February comes around, you just put all your envelopes in the mail. You’re done.
Okay, as low-tech solutions go, that’s pretty easy, isn’t it? The downside is this: you have your most leverage to get people to do stuff when? Before they move in or after they have all their stuff in your apartment?
Audience: Before they move in.
Rich: Before they move in. They’re doing nothing after they move in. Any promises or any requests, good luck. But before they move in, they’ll do anything you ask them to, right? Absolutely. That’s the best time to get your 12 rent checks. The trouble is next you have to do it again, right, and who knows. Again, we’re back to the effort thing where a calorie is burned. They have to actually do stuff.
So I have some tenants who mail their rent to the bank every month. Here’s one of them. Well, this is an old one. I don’t actually do this anymore, but they mail their rent directly to the bank. I don’t ever touch it. We’ve already covered my flag strategy, right? This is how I went with everything. I don’t want to use it directly to the bank and then most banks like I said if you log on to the online banking, you can see who deposited the money. You can click on the thing and like see your deposit slip or check, right? If you want to make this easy for people, give them the deposit slip for your bank. If they write their name and your number on there, take the money to the bank then it makes it very easy for everybody.
This particular bank, Millbury National Bank, they’re online banking. They don’t actually allow me to click on the check image, so they email me when somebody pays the rent. Isn’t that great? Yes, it just shows up in the email box. Again, I don’t do this anymore but at the time it seemed pretty easy. I just got an email from the bank when somebody showed up. Who likes when money shows up?
Rich: All right. Here’s another thing they can do to pay the rent. You can take your 12 checks that you have and on the first of each month, you don’t even have to mail it to the bank. You can take a picture of it. Who has a bank that does this? A lot of hands. This has been done in Europe for a good 15 years. It’s just sort of making its way over here in the last couple of years, DCU does it. Berkshire does it. A lot of banks are starting to do it where you can just snap a picture of the thing and it gets deposited into your account. Even easier than that for you have the tenant take a picture of it and have it directly deposited into your account. You give them you account number. They can take a picture with their phone, and then they don’t even have to fill out an envelope, and they don’t have to put a stamp on it or do any of that stuff. Is that pretty easy? It’s pretty easy.
Female Audience 1: You can [unintelligible 0:06:32] a lot of people right now.
Rich: Yeah. Everybody has your account number, guys. Who in here has ever written a check? [Laughter] Seriously. Every hand should go up. Your routing number is at the bottom. Your account number is at the bottom, true or false? Every single person in the world has your account number. It’s not confidential information. That’s a really good question. I’m glad you brought that up because right on my background check form when I ask people for this information, it says right there this is on the front of every check that you write. There’s nothing you can do it with it. You can’t just go steal somebody’s money with the routing number and the account number.
I’m really glad you brought that up because I don’t get that objection anymore because it says right on my form, this is on the front of every check you write. Before we had that on there, everybody was freaking out like, “I’m not giving you my personal information.”
Great, I’ll give you mine. I’m trying to get paid here. You guys like to get paid? All right, there’s more.
This is a – we’re moving along in technology here. This is a good way to do it. Who has used Online Bill Pay before? A lot of folks, a lot of people pay their bills that way, right? Does anybody receive their rent that way? Some hands are going up. A lot fewer. This is something that every bank does. The tenant can go on to the website and they can pay the rent with this. Here’s the biggest advantage of doing it this way is that if you see up at the top – Rick, how do you make the thing point? It’s the middle button? All right, cool.
Let’s say they’re going to pay my company, Gwendolyn Property Management. So they select whether it’s their checking or savings account they want it to come out of the amount box, they put in the rent amount, the first date that’s going to be is called February 1st and the frequency right here. This is the fun part. They just click monthly and now every month, it branches up and it gets deposited directly into my account. In fact, to make it easy for the bank, I’m going to have to call my company, Gwendolyn Property Management number 29394 because that’s my account number.
I’m going to have them put it right in the 2 memo of the check – not the memo of the check but right in the 2 line. I make it part of my company name, so the bank it’s very, very easy for them to make sure the money went into my account because where do I want the money to land? In my account, okay. I’m going to make it very easy. Downside to this: you have to rely on the tenants to do this. Best time to do this in my opinion, sit down with them and do it, make it easy because there are only two reasons that people don’t do something: because they don’t care, because they don’t want to, or they don’t know how. That’s the beginning and the end of it, isn’t it true? Either they don’t want to or they don’t know how. If you take away don’t know how, before they move in, they’re probably going to do it. The best time to do this is when you go to inspect their apartment before they move into yours. Who does this? Not a lot of hands on that one.
Okay, before they move into my apartment, I want to see what theirs looks like. Maybe during this visit, we’re going to sit down on their computer, we’re going to set up all the rent payments. This is something that you can do. I’m getting some weird looks right now. The best part about this is that once it’s set up one time, you never have to do it again. This is the first slide we’ve had and there are two more at the end. This is on autopilot. This is how much effort is involved for you once this is set up?
Rich: Literally zero. The money shows up in your account. All you have to do is make sure it’s logged in your banking or whatever you do or have your bookkeeper do it, make sure the money showed up. How much does the tenant have to do from here on?
Rich: Nothing. Once it’s set up, it’s on autopilot. They have to rely on them to do it. Not every resident is going to do this, right or wrong?
Rich: Some will but it’s not going to be 100 percent. And some of our residents are cash-and-money order people? True?
Rich: Okay. This is actually – I’m trying to talk fast – this is part 1. There will be a part 2 of this another time. I don’t know if it will be next month, but it will be sometime that addresses our cash-and-money-order crowd, which is a sizable population and these last three parts, they don’t really integrate well with. But there’s good news for them next time we talk about this, okay.
Real quick, I’m going to move on to the next two, which are way awesome more than everything else. Does anybody have any questions about this slide only? Scott does.
Scott: Is that [unintelligible 0:10:53] online banking?
Rich: Yes. Scott asked is this the tenant’s online banking and the answer is yes.
Scott: Can they – because when I’ve ever done this, it’s been a paper check that got sent out to the online bank.
Rich: Correct – yes! I left out part of that. So I told you – thank you. So I told you that I had it made it out Gwendolyn Property Management number 29394. That really is my account number. My Citizens Bank account number – why are you at Citizens Bank? I’m not advertising for them. They’re in Stop & Shop. They’re open seven days a week; they’re open until 7 PM. They’re open on Sundays, right? You want to make it easier or harder for people to give you money?
Sandra: TD Bank.
Scott: TD Bank.
Rich: TD Bank as well. We want to make it as easy as possible. That’s the theme here. We want to try to make it as easy as possible for money to land into your bank account, so in order to do that, I’m not going to put my address or my office address here. I’m going to put the bank’s address. So I’m having to mail this to Citizens Bank. Does that make sense? I’m really glad you asked that. Thank you. Does anybody else have any other questions about this slide only?
Doug: One comment about that, Rich. Actually, we use Commerce Bank and we can do electronic transfers actually. We don’t have to mail to a bank up to a threshold.
Rich: It’s amazing that most of the banks mailed up paper checks in 2016.
Rich: I thought that’s always how it worked, but I don’t get the paper check. I don’t have to do anything with it. Citizens puts it into my account.
Female Audience 2: Just really quickly. You said that you could give the account number on. Is it the routing number and the account number or just the account number?
Rich: Good question. Just the account number because to piggyback of what Scott said, if it goes directly to Citizens Bank, they know their own routing number, so they just need to know the account number so that it lands in the correct checking account, okay.
Doug: Another question up here, Rich. Do you want to take it?
Rich: Sure. All right, I’m going to move on to the grand finale.
Bill: Yeah, we use Southbridge Savings Bank.
Rich: Okay, you use Southbridge Savings Bank.
Bill: Too close?
Doug: No, no, not close.
Bill: Okay. We have the tenants go to the bank and do the deposit. We provide the deposit slips with all the information there and we even put their name on it, okay.
Rich: You put their name on it for them. That’s smart.
Bill: Right. Because when we do that, it shows up on our computer that it was them that made the deposit immediately.
Rich: Right, absolutely.
Bill: And we do not accept checks.
Rich: You don’t accept checks.
Bill: No, we provide at the top of the deposit slip for the teller, “Do not accept checks.”
Rich: Isn’t that fascinating? Okay, I’ve never heard of that before. That’s very interesting. So, you don’t accept checks can I assume because they can bounce?
Bill: When they used to mail them to us. “Didn’t you get my check yet?” Yeah, then when you get it, it would bounce.
Rich: Okay, all right. So, Bill’s hedge against bounced checks is do not take checks. Okay, but yes you made it easy for them. You gave them the deposit slips. Your account number is already on there. Super smart, absolutely. Okay, so – almost done.
Popmoney — I’m going to try to cover this in 10 seconds — this is another way of doing the same thing that the Bill Pay does. They can do it right from their cell phones. The advantage to this is that you can actually invoice somebody each month. It will cost you $0.95. You can actually send them the equivalent of like a text message, “Hey, pay your rent today,” and all they have to do is tap on it and pay their rent. It’s a pretty easy thing to do and that’s how it works.
All of these things, we’ve gone over so far. You relied upon the resident to do something, is that true? Who would rather you be in control of everything that’s happening? That’s me. I don’t want to do it. I want to direct how it’s getting done because I’m lazy. I just want to get this on autopilot. So a lot of those things are good ways of doing that.
Here’s something that maybe things are a little bit better. Here’s a page out of my lease just as an example, rent payment options. Okay, “Amount of monthly rent due on the 1st of each month. You are a valued resident with us. You are in charge of how you choose to handle your rent payments. Simply choose one of the following methods.”
They don’t actually get a choice. We decided before we sat down to this we’re doing auto-debit. But I have a piece of paper that shows them what their options are and it’s already highlighted that they’re going to initial the first spot because we’ve already agreed upon it. This is something I’m springing on somebody when they’re now moving their furniture into your apartment. We’ve already covered this. I already have their auto-debit information filled out, but I got a piece of paper on here that says that they selected it on their own. They understand how it works. This is good if you want to positively impact your credit score – whoops! I hit the wrong button—already pay some bills by direct withdrawal.
At the bottom, “Once a method is selected, written permission by owner is required to change it.” So once they pick auto-debit, it’s not so easy just to slip out of it if they’re feeling in a different mood later on.
Here’s what it looks like because now we’re in this section. We are now in the 21st Century of rent collection, so if you don’t want to join the 21st Century or even the 20th Century, you can just do the checks. But this is an auto-debit form. It’s very, very simple. There’s a company called ClearNow that I just switched from a month ago. I have nothing but good things to say about them. We used them for 2-1/2 years and it works like this. You fill in their name, address, phone number, and email address, how much the rent is, [unintelligible 0:16:20] the check to it, and you’re done. I email this to ClearNow. ClearNow is a third-party company that collects the rent. It’s $15 for the first unit; it’s $2 for each additional unit, unlimited. If you have 1,000 units, that’s how it works. If I told you that for $2 a unit I would go to the tenant’s house and pick up the rent for you and then go put it in your bank account, would that be a good $2 spent?
Rich: That would be worthwhile to spend $2 on it, right? So this has actually worked out really well. The money comes out of the resident’s bank account. Everybody comes down on the 5th to account for some people who get paid on the 3rd, right, and we don’t want checks bouncing, so how we did this was everything came out the 5th, it says on the top right corner of the debit. Debit day is on the 5th and the money showed up in my account on the 9th. That was it. Does that sound pretty easy? So this is a one-time form and from here on forward, how much effort does it require from the resident? Zero. Do they have to do anything?
Audience: They have to put in the money.
Rich: They have to put the money in the bank. That’s a good point, but they haven’t figured out a way around that one yet. Now this form gets filled up before they move in. I haven’t filled this out when they were signing there for their security deposit for me to get open. This is all stuff that gets done before they move in. It’s a piece of cake and then once it’s set up, it’s set up. How much effort do I have to put it from here on forward? Nothing. The money shows up in the bank. The only thing I had to do is make sure that I go through and if I have 20 apartments, make sure I have 20 deposits, right? I’m going to come back to this.
This is what the email looks like from ClearNow. I actually took a screenshot from a year ago of my actual ClearNow thing. Okay, these are tenants. We’ve got Sierra Bayless at the top. She lives at 2 North Main Street Apartment 1, originally paid $819 in rent. It was collected. You notice the whole column is collected; nobody bounces. Nobody bounced in this case. A bounced check with this works the same as bounced check any other time. You have to go back and collect the money another way. But this works pretty well for the lazy people. It got deposited into 2 North Main’s account. This has four different buildings in here. ClearNow knows where each tenant lives and they put the money into each of those four buildings. They all have four separate checking accounts. If you’re a property management company, this is very easy for you to do this for all of your owners. Does that make sense? Okay if you manage properties for others.
A couple of quick things about ClearNow. From monthly debits on the 1st, 5th, 15th, or 25th, those are your four choices for monthly debit. It’s $14.95 for one debit and each debit is just $2 month. There are no additional fees with that. It’s that how it works. For semimonthly debits, it’s $4 a debit if you want to do it on the 3rd and the 17th. For biweekly debits, I’ve got couple of people biweekly because they get paid biweekly, so every time they get paid, we take half the rent or approximately.
Female Audience 2: [unintelligible 0:19:17].
Rich: Yes, that’s each time and it’s simple enrollment. It’s one time only and the ClearNow reports to the credit bureau. There are two kinds of people I found that like when their rent payments get report to the credit bureau. One if somebody has good credit and they want all the rent payments to count, right? The other is if they have bad credit. Who’s ever run into somebody with bad credit? Who’s ever run into somebody with bad credit, who pays the rent on time every month?
Audience: It’s not me.
Rich: Absolutely, okay. There are many people who get themselves into credit card issues and fall behind on other stuff, but they pay the rent, right? I don’t have a problem with that. They love the stuff. They’re like, “Wait a minute! My rent payments are going to improve my crappy credit? That’s awesome!” Now if you tell somebody here before they move that you’re going to report to the credit bureau and they don’t like that idea, what does that tell you?
Audience: [unintelligible 0:20:11].
Rich: Everybody knows the answer to that one, so this is a really valuable tool, isn’t it? If found it to be a selling point for our apartments. People are excited about this and we put it right in the ads. Okay, so we already went over this. There is one more to go over, so the downside that I found with this was that now I have to account for all this. I get this email that shows that all the rent was paid and now we just have to account for this in QuickBooks or whatever software you have. That’s the last step.
The next thing I want to show you actually allows you to skip that step and you don’t have to do anything at all. However, because for somebody who has single-digit number of units, ClearNow is the way to go. If you have more than that, then the next method might make it a little bit more sense. Does anybody have questions about ClearNow? I tried to buzz through that really fast.
Peter: It may not be about ClearNow but the first thing I thought of was how do you handle with the electronics serving your 14-day notice?
Rich: That’s a great question.
Peter: To the next day.
Rich: That’s one of the downsides to that. I used to deliver 14-day notices on the 2nd of every month. With this, I can’t do it until the 6th or maybe the 7th, depending upon the day of the week, so that’s one downside, Peter, is that I have to delay my 14-day notices because I don’t know if it balanced until the 7th of the month. So that’s a really good point. I felt, when I weighed it out myself, I felt that having everything automated, the benefits to that outweighed the negative part of having to serve the couple of stragglers the 14-day notice. Good question. Anybody else have anything about this one? Pietro?
Pietro: Deducting fees after taxes, applicable there?
Rich: Are the fees tax deductible? I’m not acting as one. The answer is yes [laughter]. Any other questions? That’s a good question. Okay, so how are we doing for time? I’m normally the timekeeper, and…
Doug: We’re okay.
Rich: We’re okay. Is everybody interested in this?
Rich: The next part is it really could apply to anybody but in my opinion when I look at the numbers and things, if you have 10 units or more, then I can’t think of any reason someone wouldn’t do the next one and that’s to use property management software. There are a couple of advantages to this one. You can receive rent payments by check or by credit card. I had somebody pay their rent yesterday by credit card. Their auto-debit bounced, and what did they say? “I don’t know how that happened. Jeepers, the money was all there!” But they paid their rent with a credit card. So what does that tell you?
Male Audience 1: You’re in trouble.
Rich: Maybe the rent wasn’t all there in cash and I’ll you why. Because they paid $36.73 for a credit card fee when they could have paid $0.50 for a check fee. There’s only reason somebody is going to do that, and it’s because they didn’t have the cash to use the EFT, true or false?
Rich: Okay, so this is a situation where if I relied upon them having the cash, I still would not be paid. Does everybody follow me on that? Because of the ability to use a credit card, they’re able to pay their entire rent amount and they paid the $36.73 fee, which they have to do automatically. I don’t pay those things, okay? So that’s one example where having a credit card came in handy. Tenants can pay their rent, late fees, and other charges through the resident’s site. They can make a one-time payment instead of a regular scheduled payment. It says they can set up a regular scheduled payment, unnecessary. You do that before they move in or if you have existing residents, there is nothing to stop you from setting up ClearNow or property management software with your existing residents.
When we took over some buildings in Webster, that’s what we did. We had 18 units down there and we got them all on auto-debit except for one, and they’re going to be moving out not necessarily for that reason. But this is also handy because do we collect money from things from time to time for things other than rent? Yeah sure, like if somebody’s lease is up and their rent goes up $50, they have to put an extra $50 in their last month’s rent under security deposit. That’s a really easy way to do it. They can do it right from their phone. If they have to pay a late fee if they’re more than 30 days’ late with the rent, they can actually pay the late fee. I had somebody had to pay an extra dumpster fee because they threw something in there for $35. They are able to go on right on here and pay it $35, and it got credited to them and it’s very, very easy.
Process a rental application fee: You can collect rental application fee from prospective applicants. Applicants enter their bank account information through your public site online application. So all you have to do if you’re showing an apartment and somebody wants to pay an application fee, hand them your phone. All they have to do is put in their information and it’s collected. You don’t have to drive to the bank. This is a pain in the butt. That guy had shown the apartment. He was taking cash, and checks, and stuff. You have to take it to the bank. So now you don’t have to do that anymore.
Doug: If I could just jump in on the application fee, could you explain a little wrinkle about application fees because you can’t generally – I don’t know if we want to go there, but you can’t generally take an application fee in Massachusetts.
Rich: Okay. Yes, that’s a good point. This is copied and pasted from Buildium’s website. Buildium is a property management software that actually came to speak here in June. I signed up with them. I use them for all kinds of stuff. I’m not going over any of that except for the rent collection part of it. Application fees, this is a subject that is in dispute even among attorneys, so I’m going to summarize what I’ve heard is that the statute says you can collect first/last security and key deposit fee and that’s it. It doesn’t say that you can collect – by the way, I’m not an attorney. I’m not acting as one. It doesn’t leave any room for an application fee. How I do it is I call it a background check processing fee and I refund it when they move in, so they haven’t actually paid a fee and that’s how I do it. I’m not saying that that’s the right way to do it. I’m just saying that’s what I do.
Doug: Thank you.
Rich: And that will keep you out of trouble, I think. I mean in my view – I’m just going to go off on a tangent, if I give you the money back, we’re square. I haven’t actually collected any more money than what’s due if I give it back to you. We’re even. By the way, by having this set up, you cannot only collect rent. It’s very easy to pay vendors. It says you can vendors electronically without printing a single check. I used to pay all my bills through Bill Pay up until a couple of months ago. I started doing it this way, here’s the advantage. Does anybody use QuickBooks or any kind of accounting software? A lot of people, right? So you have to go through it with all of your expenses and you have to say what they’re category they’re in, in QuickBooks a lot of times. The rent you have to go through and say who paid the rent, right? Do you do this stuff?
With the property management software, you don’t have to do any of it. When the rent shows up, it knows you paid it like which individual tenant. When you pay a bill, it knows that’s the trash bill and all the bookkeeping is done. The bookkeeper has nothing to do. You can set up the payments for the residents. You do not rely on them at all. Buildium has a one-time setup fee for this system that’s $99. Then from there, it’s $0.50 per debit whereas ClearNow is $2 per debit. This is only $0.50, and it’s very easy to pass this along to the residents. Just add $0.50 to the rent on the lease. That’s it.
You might think I’m a cheapskate, and you’re right [laughter].
At 2.75 percent per credit card and it’s okay to upcharge. I charge the $0.50. I charge the 2.75 percent. You can do what you want. You can make it 5 percent if you want to if you want to collect an extra $0.80 on something.
You can click the link for Buildium on MassLandlords.net, and if you join, the association actually gets some money. Remember we were talking about ways of offering more services and creating more revenue? Okay, so this is one thing that can help with that.
Here’s how you do that. You go on to MassLandlords.net. Is everybody familiar with this website? Yes. Okay, you click on resources and then down here over on the lower right. You see that where it says Buildium? Okay, it’s got the little red circle around it. You click on that and you can signup for a free trial for 15 days. You can try this out. We started off just using it for work orders, and then we started using it for accounting. I don’t use QuickBooks anymore because this is better.
So who likes to collect money? Okay. We just went over a lot of different ways to collect money. Hopefully, some of that was useful. You might collect money for other things like cleaning up pet waste or things like that. This is probably one of the more common extra fees that I have charge for picking up cigarette butts or something like this. This makes it very, very easy for them to pay and for you to control that.
So, I hope that helps. It feels like victory is what this kid is. So that’s all I have for you, kids. Thank you very much. Do we have any questions about this stuff? Thank you, Sandy [applause].
Doug: We have a question back here.
Rich: Yeah, I’m going to hang around because I know we went over as fast as I tried to talk. Thanks for hanging in there with me.
Female Audience 3: Hi. Are there other systems like cash? My parents taught me about [unintelligible 0:29:35]. One of them has [crosstalk 0:29:38] cash account that notifies me when his renters ready to put into my account. I didn’t know anything about it. I still don’t know how much he charges or anything like that.
Rich: Okay, a couple of people just said PayPal. That’s one thing I left out. That’s actually one way I used to collect background check fees is through PayPal. It’s actually worked out well. I’m not sure if that’s what you mean, but that’s definitely —
Female Audience 3: Cold cash.
Rich: It’s cold cash. Okay, well the next time we talk about this method, we’re going to talk about the cash and money order, folks.
Doug: Bitcoin. We haven’t navigated Bitcoin here. You could also collect rent in Bitcoin.
Rich: I’m shocked. We have — yeah, in case the American dollar collapses, we have Bitcoins as an alternative.
Doug: Are there any questions? Okay.
Female Audience 4: [unintelligible 0:30:28].
Rich: Yeah, and if you guys have to go, I’m not going to feel offended if you put your coat on and take off. That’s cool.
Female Audience 5: You didn’t talk about within QuickBooks, there’s the option to use it into a payment network, which is where you invoice. You would send a batch of invoices to all of your tenants. They would get it via email. They click on the link and then their payment goes directly into your account, also identified with their name. It’s $0.50 per transaction. There is no fee upfront –
Female Audience 5: If you’re already a QuickBooks user.
Rich: You already use QuickBooks [unintelligible 0:30:56].
Female Audience 5: Yeah, which you should have in order to use it.
Rich: You already use it.
Female Audience 5: Use the IPN system, so that’s another option. That’s actually the option that I use and it records everything and it even caches their payment to that invoice for you.
Rich: That’s a really smart idea for people who weren’t going to take advantage of the property management software, that’s the way to do it. That’s really smart.
Female Audience 5: And the question is, you spoke about possibly doing this for taking security deposits. However, we all know there has to be a separate account, so if you took that in there, let’s say you did Buildium for the security. You have them do into that account.
Rich: Yeah, I do.
Female Audience 5: Do you then take that money out and put it into another account under just their name, or what do you do?
Rich: Before they even move in, yes. I actually schedule — if you’re asking me how I personally do it, if on December 15th I collect the first/last security and people move in January 1st, I’d put it into our property management account the whole amount, say $2,100. Then on January 1st, $700 goes toward the building’s operating account for first month’s rent, $700 goes into last month’s rent collective fund that I have and $700 will go into their security deposit account that I already have set up.
Female Audience 5: Do you have one for every single tenant under their own name?
Rich: Well, yes. As a matter of fact, I do.
Female Audience 5: You do?
Female Audience 5: Okay. That’s a lot of work, I know.
Rich: It’s not a lot of work for me. I give them the bank form, they sign it, and I email it to the bank and they set it up. I just scheduled the transfer from the property management company into that account, so I don’t even have to remember to do it on the first.
Female Audience 5: Your bank can automatically do that [unintelligible 0:32:20]?
Rich: If a bank can’t do that, I would bank elsewhere. Yeah.
Doug: I think at this point, we should probably — because we have conversations about plumbing and George Chapman is available. If you’re worried about plumbing, go talk to George and we also have ice dam experts up here. If you want to talk rent collections some more, Rich will stick around for just a minute.
Rich: Thank you very much.
Doug: All right, have a round of applause for Rich [applause].