When I started in the rental business six years ago, it was fun to go pick up my first rent payment. As the business has grown, it now takes 8 - 10 hours each month to collect the rent.

The good thing about picking up the rent is that I am at every house each month. The bad thing is that I am at every house each month.

After reading the success stories of having tenants make the rent payment at the bank directly into the landlord's account, I talked to my bank today about the possibly of doing something like this in their system.

The bank said they could do this. They suggested we set up a separate and unique account for each door.

I would give the tenant a card with the account number. When the tenant went to the bank to make a rent payment, the tenant would give the bank teller the card with the account number and the rent money. The bank teller could then create a deposit slip and process the transaction. I could also give the tenant a stack of deposit slips.

These accounts would be set up for deposit only.

The bank said I would be protected by the bank if someone tried to make a withdrawal from one of the accounts, The fraud protection is free. I would also be assigned a free fraud control specialist by the bank if there was a problem.

I would get a notification from the bank as soon as a transaction took place and which account. Assuming this was a rent deposit instead of a fraudulent transaction, I would electronically transfer the money from the 123 Main Street account into the LLC account. I would notify the bank fraud unit if someone made a withdrawal from the account,

I have to keep a minimum of $500 in each of these accounts to avoid any bank fees. At $500 minimum balance per account, times 20 doors, I would have a total of $10,000 in minimum balances. This could be the security deposits from the properties. I do not like this part of the plan.

When the tenant leaves, I close the account.

When I get a new tenant, I open a new account and start all over.

Do you think this will work?

What problems do you think I will have?

Any suggestions on a better way to set this up?

The bank is Suntrust.

MMIT, I used to provide deposit slips with tenant name written. Tenant would pay at the bank, and I could log on to my account the next business day ,see who paid, and keep my books.

I was an early adopter of this plan/

Suggestions:

1. Find another bank. I keep a balance of $40 in each account and they are set up as checking accounts. Money comes in and I then sweep it into an operational (non public) account.

2. Banks will do this without fees. It may take a few calls, but find a bank located near your rental units.

3. Ditch the card idea. Cards, like deposit slips, get lost. Have corresponding accounts and addresses close at hand, in case a tenant needs the info (they will at some point). Advise them to store the account number in their phone in your contact.

4. When setting this up, find a bank and a good personal banker to help you. Do NOT sit in the bank while they set up 10-20 accounts. Set up more than you need at the present moment, if you plan on growing your business.

5. Do not close the account when the tenant leaves - continue using that account for that specific property address.

6. Modify the information on your bank's web site to reflect the address information tied to the specific accounts. For instance, I can put a nickname on my accounts which works just fine.

7. I wouldn't worry about notifications, you'll be checking often enough for yourself.

8. Advise the tenants, you're doing this for their benefit, so they do not have to wait for you to come by and get the rent. They can pay it in the drive thru, without even getting out of the car. I had one resister, who I had to coach through the process (mistrust of banks). 8 years later, she's paid $800/month religously.

What #22 said. Works great. He got me started back in January. Of course along with input from Sisco and SID.

Some on here always says collect on the 1st of the month, don’t give Grace period and have zero tolerance. Others say work with the tenant (a little.

Your idea of having an account for each door will be your saving grace. The nick name for each account is paramount. I have named mine “Rental 605 Adams John P3 L7 $50. The next one might be “Rental 551 Porter Sally P10 L15 $30. All accounts names for rental collection start with the word “Rental” to distinguish it from other types of accounts in the same bank. Then “605 Adams” is the address of the rental property. John is the tenant’s name. The P3 L7 tells me they are supposed to Pay on the 3rd and are Late on the 7th. Four day grace period. If late the $50 tells me how much I charge for tenant paying late. These are just ideas- go play.

The deposit slips I started with were great but two weeks after I started with them this bank stopped using deposit slips.

I sent a text message to each tenant with the last four #’s of the account number they are to use. Takes the place of the cards you were talking about. IMPORTANT to me. I REQUIRE them, when they make a deposit, to write their NAME and their ADDRESS on the deposit slip they get from the bank showing the date and amount of deposit, take a picture of the deposit slip and then text that picture to me. When I receive their text with the deposit slip showing I then enter the information into their payment spreadsheet. This way they have a deposit slip, they have a picture on their phone, I have a picture on my phone and payment is entered into spreadsheet. And if it takes you a day or two to get payment entered into spreaqdsheet all you have to do is look at your phone to get deposit slip info.

It seems like a lot of work but it’s not. I guess if you have an automated system it could go better but hey, I am just a little redneck guy doing what I can.

A couple of things I forgot.

Your notifications or alerts from the bank. I would sometimes get two or three notifications or alerts when a deposit had been make. I guess the bank was just installing this system and had not worked all the bugs out yet. It was a little hard to keep up with all the alerts from the bank but the tenant would only text picture of the deposit one time.

My bank required me to use $50 to open the account but the next day I could remove ALL of the money out of the account and the account would still be good. I keep $10 in each account. Like you are talking about, after they pay I move rent money into a different account

You might also review the VA statutes or with your attny,

Why not just go old school. Tell them check or money order by the first at P O Box 199, your town USA. You go by the PO and then go by the bank. 1 checking account to keep up with, not 21. Make a checklist of the 20 houses. Anyone who hasn't paid gets a pay or quit notice.

The onus to pay is on them.

David, no fees for ACH services at my bank (small, locally owned) bank so far.

I’m using ACh with the Clearnow system here on Mr Landlord. I’m actually in the same town as a Sisco, but we use different banks.

The fees aren’t bad when your rents are all on one day. I just raised my rents to cover the fees.

Obviously you are spending way too much time on rent collections and are making it needlessly complicated.

Giving tenants your account number is a bad idea.

Much better idea: ACH or Chase QuickPay/Zelle/PayPal. I use QuickPay and PayPal and it works really well. Very easy to manage.

For the purpose of winning an eviction case for non-payment of rent, I give my tenants (I have over 100 of them) the ability to pay rent through various means. Sometimes a tenant hasn't the time to wait in line at a bank to make their rent deposit in my bank. So I have several methods available to all of my tenants. Here are a few:

1) I give my tenants envelopes addressed to me with their return address. All they have to do is put a stamp on it and mail.

2) I provide my tenants with my bank information and have a branch near to the rental property that the manager and/or head teller aware of special "deposit rent account".

3) In case the tenant is going out of town and hasn't the time to mail a check, they can leave the check somewhere in the unit and give me permission to enter to retrieve it on or near the 1st of the month.

4) The tenant can give me a series of post dated check for the rent for the next few months. This way they don't have to be concerned about forgetting to pay.

5) I or the tenant can set up an automatic rent payment each month.

These are a few ideas....

In a large apartment building I have a "drop safe" that is cemented/bolted to the ground and can't be moved, stolen or broken into. I then go there on the 1st and 5th of the month to collect rents or have the manager make the deposits for me.

I did the deposit at bank Theon when I started rentals six years ago. It worked very well, but tenants will forget to bring the account number to the bank, and then text you asking for it.

Now all of my tenants are using Zella or PopMoney. With those, I get an email from the bank saying So and So deposited $ XX into your account. So, I have reduced the number of accounts.