Lot rent collections. Old way = cash. New way?


#1

I have a park for about 1 year.

When I bought the park, the lot rent was paid in cash and collected by hand by the park manager. The money would then be kept in a safe in the park manager’s home. And then deposited into the bank.

I have not yet changed this system. I know this is a terrible system with many risks. I hope this discussion does not turn into a berating.

Instead, I would like to know what is the forum’s ideal way of collecting rent. If you could choose any method, which would be your number 1 method of collecting rent?

I am going to change the way I collect rent, but first I want to find out what is the best way to do it.

Thanks.


#2

@Peter , as per your post:

  • “Lot Rent Collections. If you could choose any method, which would be your number 1 method of collection rent?”

Peter, first of all Congratulations on your year of ownership of a Mobile Home Park!

Top Methods Of Collecting Rent:
1.) Bank - Tenants Direct Deposit Into MHP Bank Account: Have Lot # Be The Cents Amount Of Rent - For Example Lot Rent Of $200 For Lot #4 = $200.04
2.) Mail - Tenants Mail Payments To MHP PO Box: Have Tenants Mail Certified Check / Money Order To A PO Box That You Have Access To

So first off, please let me state that we will accept Cash as a form of payment on occasion. As you indicated there are risks with Cash, but sometimes “a bird in the hand in worth two in the bush”.

Please also let me state that we do not currently have Tenants who deposit the Rent directly into our Bank Accounts. I have read other MHP Owners who use this method on a consistent basis. It seems like a good method. However, you really need to know your Customer Base and if they have the ability to do this. A couple of our Tenants used it a couple of times, but not on a consistent basis.

Since we are both the Managers and the Owners, we have the payments mailed directly to our PO Box.

We accept Certified Checks, Money Orders and Personal Checks (if they check bounces then they have to provide Money Orders).

We wish you the very best!


#3

3rd party billing company.

Residents put their payments directly into our bank account using deposit slips we provide.

Safe for everyone and the residents like it.

Rental agreements state that rent is considered received on the day the bank credits it to our account.

Rolf


#4

Rolf,
How much does your bank charge you for doing it?


#5

@Rolf, I just want to make sure I understand… when you say you make use of a 3rd party billing company, who is your third party billing company? Is it the bank?


#6

@Peter , as per the following:

  • “Tenants depositing directly into the MHP Bank Account”

Last year we had a couple of our Tenants deposit Cash directly into our MHP Bank Account using our MHP Deposit Slips.

There was no charge to the MHP nor the Tenants for the Tenants depositing directly into our MHP Bank Account.

We use Bank Of America and it worked nicely for a couple of deposits.

However, last year Bank Of America decided to require any Cash Deposits into certain Business Accounts to have an ID presented with the Cash Deposits.

Last year as per Bank Of America’s Representative this new rule above was created to protect Businesses from having a random person deposit Cash into their Accounts.

Ok…so if anyone out there would like to randomly deposit Cash into my Business Account…that would be awesome…and I would give you a big “Thank You” :slight_smile: . Personally, I do not see this as an issue.

I researched a bit and found that the Bank Of America policy was to help stop “Money Laundering”.

Please know that everything we do is legal and that I have no problem giving my ID to Bank Of America. All we do is rent out Land and Mobile Homes. It is all legal.

However, some of our Tenants probably would not be as comfortable giving their ID to Bank Of America.

The Tenants could get a Money Order and then deposit the Money Order into the MHP Bank Account (without giving their ID).

We just have not gone this route.

It is my understanding that Wells Fargo does not require the ID when depositing cash to a Business Account.

We wish you the very best!


#7

The bank charges nothing unless a lot of residents deposit cash and then they charge a few bucks for that month.

I have used YES/Yardi for several years and they were great. Now, they moved their operations to India and are horrible. Talking to another company to do the same work and they charge $3.50 per bill per month.


#8

Check out https://cozy.co/features-pricing Free collection for Landlords, free automatic ACH for tenants. They can also use credit cards for 2.75% fee


#9

Hi is there a security risk to giving out your account number to your tenets? When I asked my bank about doing that they were like " Oh you don’t want to give people your account number they could take your money out. There’s all kinds of ways to get your money if they have your account number." I like the idea of tenants depositing money in my account and using the cents system for lot Idinifacation. Just don’t know the risks. Any help from you guys doing this would be great. Thanks


#10

We give all the residents deposit slips and have done so for many years. No problems so far. They put their lot # on the deposit slip and I can read it online. Very easy and the residents like it.


#11

We use PayLease. The owners get a card they use to pay. They can pay at Walmart, Kroger and 7-11. They get a receipt when they pay. No cash is put in the hands of the manager. You can get reports from PayLease that shows who paid/didn’t pay for the month and have your manager follow up with the non-payers.


#12

@MattB, thanks Matt.

Can you use PayLease as a standalone product?

Or do you have it set up with some software such as Rent Manager.


#13

@Rolf, thanks Rolf.

Could you please give some more info on the deposit slips?

  • how do you make them? do you print them out? or does your bank provide them?
  • what info needs to be on the deposit slip?
  • do you put your LLC’s bank account number on the deposit slip?

Thanks.


#14

We just use the standard deposit slips the bank gives you, except we have them printed through one of the many check printing companies you can find online. Way cheaper than having the bank do it. My bank scans the deposit slip and then I see it when I check my account online. Rental agreements state that rent is considered received when the bank posts it to my account and judges have no problem with it.


#15

Going up to the park to wait on cash payors is not productive. In the past, hired Staff “lost” my cash.

Then I went into a local bank that allows cash deposits by anyone, Bank of America doesn’t allow this. This has changed my life, they can go pay anytime the first week of the month before late fees start. The teller receipt serves as their receipt per the lease.

I made special business cards for each resident that have their name and lot # and ask the teller to please help them put their name and lot number on the deposit ticket and has my name and number on it as well. This has overcome all language barriers and everyone likes it, rarely do I ever get an unlabeled deposit to track down. I won’t be using pennies, that would frustrate my people and the tellers I think. I call the bank regularly and thank the tellers and brag on them to their bosses. Plus I’m about to submeter and that will change the amounts automatically.

When I tried money orders, they got lost in the mail and people didn’t get refunds for 90 days. Some didn’t know to save the receipts and it was a total loss. More came in wrong than right. I would never encourage money orders. Put in your lease that rent isn’t paid unless you receive the money order, you are not responsible for tracking it or waiting on the refund if lost.

I’m now looking at www.paynearme.com for accepting cash for the few people that can’t get to my local bank or if they are traveling out of town. I don’t know what they charge or how that will work out.


#17

@TexasMHP, I think this is a great idea to make business cards. A number of my tenants are Spanish, and, as you mentioned, the card can help a lot to overcome the language barrier, and help them make cash deposits directly into my bank account.

Question… you say that your card " has my name and number on it as well". What number is that? Is it your telephone number or your bank account number?

Thanks.


#18

@GJS I don’t put the bank account number anywhere. I just put my name and telephone number, instructions to please credit my “LLC payment account”, and request the resident’s name and lot number be written on the ticket.

When I opened the business account I asked if this process would be ok and gave a sample business card to the Teller line.

The Tellers love it as most businesses are not providing cards and the cards make things fast and keep the lines moving.


#19

@TexasMHP, thanks! Could you do me a big favor and send me a photo of one of your cards please? I will send you a private message with my email address.


#20

The interview with Tony Ferris had a great tip: he makes refrigerator magnets with payment instructions for all tenants. I’m going to try it also.


#21

We use TenantCloud to collect our payments as well as those without a smartphone and computer can go and pay in person at our bank. We do not accept checks or money orders by mail. This assures us we do not run into checks lost in the mail issue. has worked for some time.

And TenantCloud is free for under 75 unit parks.