Pop only accepted cash


#1

I am closing on my first park today! It is a 40 site park with under valued rent. My biggest issue I can see having right off the bat is rent collection. “Pop” who lives a mile down the road would show up on collection day, stand on the corner and take the cash. He claims it is the only way to do it, people live off SS, don’t have bank accounts, ect… I’m sure you’ve all heard it before. I plan on implementing the no pay no stay policy as described so many time on this site. No cash, mailed to po box and so on. My question to you experienced folks on here that have gone through this is, what struggles have you had with doing this? And what should I expect and be prepared for? I do believe this is the right direction to go, but am not expecting it to be “smooth”. Or am I over thinking it?
Thanks


#2

You may have to take some tenants to the bank and guide them through opening a checking account…


#3

It is not challenging to change that behavior. It is good for you that pop used to stand in the corner because once he stops showing up, the cash payments will cease as there is not a rent collection box option. Make sure to clearly communicate in writing how rent is to be paid - check, money order, etc. Mention how you will track if it is on time or not, which I assume will be by postmark date.

Also, you may want to consider options other than mail including online payments, credit, debit, echeck, or rent drop box being checked and processed by an onsite manager. These options can be quicker to clear and take the burden to log and deposit payments away from you. Also, there are services that allow tenants to pay cash to a retail location, and the funds are directly deposited to your account.


#4

You may be overthinking it a bit, I know I did. We bought a park in July and for the most part it went good. I would highly encourage a drop box and under no circumstances take cash. The tenants are expecting change and that will help guide them. We use a drop box or they can mail us a payment, but our most used method is SquareCash, we all love it!


#5

Open up a bank account near the park. True these cash customers are used to someone collecting their rent. But how do they pay their other bills? I have a checking account set up and all they have to have is the company name and the last 4 of the account number. They write the lot number on deposit slip so that when I see the deposit I can tell who did it.


#6

If these are social security collectors try to reach out to a county official from the senior services or similar and have them guide them through the process of setting up accounts or acquiring a debit card the SS gets deposited into. I’m managing a senior community and every so often people will have that card allowing them to use it like a credit card so they could do the online payments and such.

I think to train people you could also charge a $20 discount if they pay by the means you prefer. If they insist on cash maybe its worth it to run and collect the extra $20 per tenant.


#7

This is how we do it as well.

The other issue I ran into is we have a few week to week and we were collecting all the time which is crazy nonsense. Open an account, direct them to make deposits at local bank. Rent is deemed ontime based on the deposit. Lot number on the deposit is key.


#8

If you sit in the corner to collect rent that’s how tenants will pay you. If you tell them to mail in the rent thats how tenants will pay you. If you tell them to go to the bank and pay the rent thats how your tenants will pay you. Its your park. You decide how you want the rent paid. My tenants go to the bank and deposit it themselves. You have to train them. Sure some will be slow but all it takes is an eviction notice and like magic, payment is there.

Your park! Your Rules!


#9

Update: Halfway through month one and 21 paid via check/money order on time and had 2 pay through cozy.co. I have sent out nine 7 day letters to the remaining tenants that have not yet paid. Hopefully Whitetrashgator is right otherwise I will be spending some time in court soon…although half of these nine probably wouldn’t be much of a loss.