Purchasing a park out of town where current owner has managed the park himself and has always collected the rents himself, usually collecting in cash going door to door. I plan to hire on a greeter / manager who will assist me with the operations of the park, and obviously want to discontinue the paractice of cash rent collections. There is a bank with a branch a few miles down the road. I could set up an account with them and have tenants make payments there. What other suggestions would you guys have? Which methods of rent collections do you prefer?
Yes - absolutely, positively stop taking cash. Not only can it ‘disappear,’ you also don’t want people knowing that your manager has $5,000+ cash on his/her person the first week of every month. This is as much a ‘my manager might steal from me’ issue as it is a ‘I want my manager to be safe’ issue.
Do not go door-to-door to collect rent. Just evict. This was discussed at great length in the thread from 9 days ago entitled ‘Confrontation with Belligerent Tenant.’ Read it.
We have rent boxes on-site. They are two pieces of 16" drilling rig pipe welded together into a ‘T’ and sunk into a yard of concrete. Lettering on it says ‘RENT - No cash.’ They are right next to where the mailboxes are. Tenants have no excuse not to pay the rent. There are no “my check is in the mail,” excuses or “I deposited my rent into the bank - the bank must not have put my lot number on the deposit slip…” excuses.
That said, I do know fellow investors with more responsible tenant bases (e.g. those that pay over $300/mo. lot rent) that have good luck with residents mailing-in their rent. To keep accurate track of which resident has paid rent this way, you can:
give tenants pre-printed deposit slips with their lot number on them. Most every bank allows you to see deposit slips online. (My pet peeve - banks still won’t let you see the check or money order online!)
make tenants pay a few extra cents corresponding to their lot number with their rent (e.g. the tenant in space 86 that pays $200 in lot rent would pay $200.86)
some banks offer free checking. So why not just set up a separate checking account for every tenant? Then sweep all the tenant accounts into your main account.
Of course tenants can pay with cash any of the above three ways directly to the bank. You just don’t want to be collecting cash on-site.
Best of luck,