Collecting Rents

I am closing on my first park next week. The current owner accepts cash because he is local. He also says that most of the residents are hispanic and don’t have accounts. We have a manager who is local but does not live on the property. He has been the manager/maintenance guy for the last 10 years on the park and a few others for the current owner.

How should we collect rent?
-We can set up an option with a local bank for residents to drop off cash for rent, but this costs $2200 for the year, which we don’t want to spend.

What are our options?
Thanks!

You can do money orders.

Set up a local bank account and have tenants deposit directly.
With internet banking you can check on it regularly and transfer the deposits to another account.
This also avoids you having to trust the manager or the tenants to be truthful regarding rent payments.

Whatever you do, don’t have tenants mail the checks to you. You’ll receive a never-ending stream of ‘check is in the mail’ excuses for why rent is not paid. Also, don’t accept cash - that’s too dangerous for whomever will be handling the cash. And folks who are unbanked can get money orders for $0.30 a piece.

We install a drop boxes on-site at our parks sunk in a yard of concrete. The manager (on- or off-site) can check it at their leisure. Many banks have a check scanning reader that your manger can use - just swipe the checks through it like a credit card. They’ll be deposited directly to whatever bank you have in any location.

Easy peezy,

-jl-

I would do mailed in payments. You can direct them to a trusted source as opposed to a new manager you will be working with. You will have check in the mail excuses for a bit but then you charge late fees and keep with no pay no stay. Just have a mechanism in place where the tenants get three days ( go off the mailed date on the payment) and evictions.

Good luck .

Daneespegard, my Husband and I own 2 MHPs.

We are both the Owners and the Managers of the MHPs.

The MHPs are located:
1.) 1.5 Hours From Our Home
2.) 30 Minutes From Our Home

Residents in both MHPs mail their payments to us (two separate mailing addresses).

From the one MHP we get 50% Money Orders and 50% Personal Checks.

From the other MHP we get 80% Money Orders, 10% Personal Checks and 10% Cash.

We send out Monthly Bills to all the Residents in the MHPs which include ‘Payment Responsibilities’ indicating when Late Fees start and when the Eviction Process begins.

The Late Fees are based on the Post Mark Date of the Envelope.

If the Residents are near the ‘Late Fee’ Date frames, they need to go into the United States Postal Service Office and physically get the Post Mark Date stamped on their envelope.

If the Rent has not arrived in the mail (we take the Eviction Date and add the turn around time for the USPS), we just start the Eviction Process.

We start the Eviction Process for the MHP located 1.5 Hours from our home through the USPS.

We hear all kinds of excuses.

However, we continue on with the Eviction Process until ALL money has arrived and has cleared the Bank.

We wish you the very best!

I have 5 parks and accept rent through the mail exclusively. I’ve done this for 12 years and it works fine. The mail service is overall reliable and only takes a couple days if it’s local. Mail cuts out the manager from having to deal with the money.

Why don’t you replace your off-site manager with an on-site one, who’s main job is simply to collect the rents and deposit them into your bank account daily? Off-site managers rarely work out. Money orders solve the cash issue.

Kristin, people mail you cash? That sounds less than ideal for sure. Sounds like people could claim they mailed it and you must have stolen it in court.

My park’s town has a Chase bank. Every January I mail out 14 pre-printed deposit slips to each tenant. They make their monthly deposit into my account, I can see their deposit slips online, and I record their deposit in my little book. Works beautifully, and costs me nothing.

Coach62, as per your question:
“Kristin, people mail you cash?”

Sorry my post caused confusion.

The Cash comes into play for the MHP that is 30 Minutes from our Home.

My Husband goes to the MHP that is 30 Minutes from our Home multiple times a week.

When he goes to that MHP, sometimes people want to pay him in cash (instead of the Tenant getting a Money Order and mailing it to us).

We have debated about taking cash (not the best policy).

However, we also know that a ‘Bird in the hand is worth two in the bush’.

Thus, my Husband only takes cash in person at the MHP and gives the Tenant a receipt from his receipt book.

I would recommend just having your Tenants mail you Money Orders (as Money Orders are cheap to get for the Tenant and easy for your to cash as the Owner).

We wish you the very best!

With this system, how often do they lose or claim to lose money orders because they dropped one in their car or one got lost in a stack of papers?

I can’t really answer for Frank since his sample size is much bigger but we’ve never had a manager lose a check or money order to date. I’m sure we will at some point through. In any event, this is how our process looks from the manager’s perspective:

  1. Collect the rent
  2. Enter each payment into Rent Manager
  3. Make a scanned front/back copy of each money order/check and upload to the corporate dropbox
  4. Fill the information out on a deposit slip or print a filled out slip off of rent manager
  5. Go to the bank and make the deposit
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Thanks Charles,

The park I’m looking at also bills for water so I may need a manager capable and dare I say trustworthy of handling some responsibility.

Don’t be too hard on these managers! You need to set your standards very high for your manager. The more stuff you take on yourself because you think they can’t do it, the less scalable your business is. Frank and Dave’s community manager training is a great product for you and your manager to go through so you are on the same page. At the end of the day, there has to be some trust between you and the manager no matter what.

As for water billing, it’s still very, very simple. If you wind up using rent manager, you can set up the utility billing in there. Which means the manager’s process with billing is:

  1. Read the meters
    1a. Also note the master meter reading if possible
  2. Enter the readings into rent manager
    2a. Rent manager will auto post the rent charges and utility charges to the customer’s accounts
  3. Check the customer accounts for large discrepancies which may indicate a misread or a leak
    3a. Compare the usage for the total readings against the usage on the master
  4. Print the finalized invoices
  5. Distribute the invoices

You, as a park owner will need to involve yourself a little in this process. Personally, I have the manager take a photo of the master meter and upload to my dropbox so I can also check the master meter usage against the submitters just to put a second set of eyes on it. I also spot check the customer accounts from time to time.

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