How To Collect Rent In Houston
Best Ways on How to Collect Rent in Houston
Collecting rent can be a hassle when it comes to doing your duties as a landlord. It’s can be awkward asking someone for money, even when it’s owed to you.
Landlords can get a bad wrap since they often request money from people. However, there are ways to make both parties happy in a landlord/tenant relationship.
Having a good relationship with your tenants is important. That’s why it is crucial to set up a payment system that compliments the residents on your property. I often wondered if there’s an easier way to know some of the best ways to collect rent are. After research in the Houston area, this is what I found.
What are some of the easiest ways to collect rent? One of the easiest ways to collect rent is by checks. Checks are easily written and can even be mailed in if you don’t live on the property yourself.
This is an easy way to make sure that your tenants can always get money to you. Cash also works for rent collection because, in today's world, checks can be fake, and sometimes you don't always get your money back when a check bounces.
If rent is paid in cash you know that rent was paid on time. Furthermore, collecting rent from tenants using checks can cause problems with your bank account if they bounce or overdrafts occur.
That's not to say that you shouldn't use checks at all to collect rent from tenants but that it should just be viewed as a secondary option behind cash rent collection. Another option is through online deposits. With applications that make money transferring easier, going digital for rent is a viable option.
This allows you to ensure that your money will be there and get a convenient notification once the money hits the payment app of your choice. It also allows for long-distance payment in case you are out of the state when rental fees are due.
While these are just some of the ways one can collect payment from tenants, there are more ins and outs when it comes to collecting rental fees.
For example, what do you do if a check bounces? This and other questions are crucial for any Houston-based property owner looking to have a smooth rent fee process.
How to Collect Rent in Houston Easily
Though many landlords experience no problems whatsoever with collecting rent on time, others report that their tenants are slow or late in paying them. If this happens, there are several things you can try to get your money! Fortunately, if one plan fails there are usually other options to fall back on.
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Checks Used for Rent
As a landlord, checks can leave you at risk of your tenant skipping out on rent unless the funds are available immediately. If someone insists on checks, then have them provide a certified check from their bank account or require them to bring cash rather than having it mailed.
Doing this ensures that there is no reason checks should ever bounce and that they will be available to you by the first of every month. When it comes to checks the best way to handle them is to require a certified check that comes directly from the bank.
These are a great way of ensuring that the checks your receive from your tenants never bounce, which would oftentimes leave you out on money.
Cashiers checks work similarly in that they involve the tenant needing to show that they have the necessary funds to cover the cost of the rent. If you are deadset on using checks as your preferred method of payment, then these two options are your best bet.
However, checks can be difficult when it comes to collecting rent. They can take too long to clear and you, as the landlord, may be left out on money for days since checks do not clear immediately.
If you insist on using checks then go over with your tenant what each of you is expecting so that there won't be any confusion or issues at hand when checks start bouncing back due to insufficient funds in the account they were cashed from.
Cash Used for Rent
When it comes to getting money from your tenant to you in the quickest available way. It’s as easy as them paying you the money and it being completely in your possession. However, there are many pitfalls to watch out for when dealing with cash.
Cash is a simple and convenient form of payment, but it comes with a lot of its own issues. It can be stolen, cash doesn’t have a track record like checks or credit cards do and cash leaves no paper trail for you as the landlord to prove that your tenant owes you money.
The first thing that cash comes with as an issue is theft. There have been quite a few cases where cash payments were ripped off by people who either serviced or lived in the property.
If this happens to you, there is usually very little recourse other than filing police reports and hoping for some sort of reimbursement from your tenant who may be unwilling to file charges on themselves and their friends and family members.
Next, it is hard to document cash, so if any court debates were to come up because of a disagreement, things might not go in your favor.
Digital Transactions Used for Rent
A new method for money transfers used by many property management companies is the digital application. There are a wide variety of apps available to use in order to get money transferred to you as quickly as possible.
These electronic applications can be transferred from a bank account or credit card onto the app. Once the money is on your electronic application it can then be sent to you by using a debit card, electronic check, or any other method.
The convenience of electronic apps makes them an excellent solution for those who want their rent to be paid as quickly as possible. With the world in a digital age, this is the perfect solution for those who like their asset being easily available on their electronic device.
With the different applications available and the number of people who own smartphones or electronic devices, this is a great option for those looking to find a happy medium between checks and cash.
Do keep in mind, however, that with these applications there are also caveats. One of which is that when transferring money, it can take 1-3 business days to complete so that can put a damper on the process.
If the applicants are willing to fill out the application and pay the application fee, then they are most likely not suited to be a tenant. Along with this, it will allow you to see how they respond in a timely manner.
If they take a large amount of time in getting the application back to you, then they might also take a large amount of time to get your rent to you.
What do I do if a tenant’s check bounces? If you ever have this unfortunate circumstance happen to you, then the first step is to attempt to contact the tenant. Give them a chance to explain the situation and if they will be able to pay in a timely manner afterward.
If you can’t make contact with the tenant then you would instead have to make contact with the tenant’s bank to check and see why the check bounced. This will give you a clearer explanation of why and if there will be more issues in the future. It would also be a good time to go over the penalties for late payments with the tenant in this instance.
Is it a good idea to use a property manager? A Houston property manager can be useful when it comes to collecting rent. One situation when a property manager is useful is in collecting past due rent. Written notice should have been sent to the tenant at least one full month before sending the property manager to collect rent, although this rule can be modified by agreement between both parties.
If there has been no communication from the landlord about unpaid rent, it could mean that they are either still deciding whether or not they will pay, or may have already paid and forgotten to let you know about it. On their part, tenants should call their landlord if they think that a payment was overlooked for any reason.
Collecting past due rent requires going through certain steps to ensure that it's done legally and professionally. As a real estate professional, your duty is to ensure that all local housing laws are followed, so you must familiarize yourself with the steps to follow in order to collect rent.
Is it possible to set up automatic payments? There are sites that allow you to set up automatic payments for your tenants so that it makes it impossible to forget to pay rent. This is common with more tech-savvy tenants who are inclined to have one less worry in the rental process.
If this is something that interests you, I’d suggest doing research on what your tenants might be able to use and implement the system to make you, and your tenants’ lives much easier.