A lot of inspired real estate investors get their start with rentals. Rentals can either be a cash cow, or a nightmare. What you have to decide right from the start is that it is a BUSINESS, like we covered in our first article “Tips For The New Real Estate Investor“. Get this right from the start, and you will do better in the long run. In this article we will go over the most important thing in making your rentals profitable – Collecting Rent!
We are surprised at the number of people that just have tenants mail or drop off a check. This can lead to “I mailed a few days ago, the postman must have lost it”, or the tenant is just to busy to bring you a check. Stop this! In this day in age there is no reason you shouldn’t be taking payments on line or with some sort of system.
Chris Clothier just wrote an article that talks about this and gives good reason to convert:
What will impact your long-term cash flow is your resident services: things that help resident retention and help maintain quality residents. What do we mean? One, make paying rent easy. A lot of investors just assume residents can just drop off a check or cash with the property manager and that’s easy enough. But in this day and age, it’s really not. With most bills being automated and payable online, we have to catch up, too.
There are many platforms out there that allow managers to collect rent online: making it extremely convenient for your residents to pay on time. This prevents you from worrying with late payments as much. There are a lot of resident amenities that should be on your radar, from online rent payment services to something as common sense as on-site washers and dryers. Keep convenience at top-of-mind and you’ll find your overturn reduced and cash flow steady.
Read the full article “5 Tiny Details That Real Estate Investors Must See to Succeed“
Chris has a lot of other good points in that article. We suggest you read the entire piece because Chris is part of MemphisInvest, and the well known Clothier family team.
Now you maybe thinking, “where am I going to find a company or service to collect my rents?” Well, Sharon Vornholt (another investor whose advice we trust) just wrote an article that lists some great properties, as well as good info on choosing the right company for you:
The first thing you need to decide is just how much involvement you want in the process. I’m going to review some companies to help you decide.
When you are just starting out, you may not choose a full service management company due to the cost.
You might want to look at transaction companies that offer software and banking solutions. These allow you to be a more efficient DIY landlord. That may a place for you to start. You will still have to deal with the tenants in this situation.
But if time is your issue and you want a more hands off role to concentrate on building a business, there are companies like My Landlord Helper that fill the gap. I personally think this is a great solution for most people whether you are brand new or you’re a seasoned investor. Having someone take your tenant phone calls and do all of those repetitive tasks all landlords have to do takes YOU out of the day to day headaches. Not only does it let you focus on building your business, but it helps prevent landlord burnout.
Read the full article “Property Management Solutions for Landlords“
She goes on in here article to give you 5 companies to choose from depending on your needs. Of course, you can also do a Google search and maybe find someone local to help you with the level of assistance that you need.
The basic takeaway from this is that you need to catch up with the times and go digital for collecting rents. Whether you do it on your own with a credit card machine, an online service for collecting rents, or use a full service property manager. In the long run, it will help make your life easier by not having to worry as much about getting paid next months rent.
If you are in the market for an investment property in or around Metro Atlanta, be sure and visit our site MPGDeals.com to sign up for our early alert emails for when properties become available 🙂