How to Organize Your Rental Property Payments To Make Your Life Easier
It’s the beginning of a new month which means it’s time to pay all of the bills on my rental properties. This includes multiple mortgages, multiple HOA dues and payments to owners of some of my lease option properties. So, how do I keep track of all this without going crazy?
First, I use online bill pay. If you’re still writing checks you are unnecessarily wasting a lot of time. Before I started paying my bills online I would sit down once a month for what seemed like hours to pay all the bills.
I Recommend this Rental Property Software
After I pay all of my bills online, I next record my HOA, mortgage and rent payments in Quicken rental property manager. This is the simplest property management software I have found. Plus, when tax time comes around, all you have to do is hit “print”, then hand your accountant the rental documents and he/she will take care of the rest. If you don’t have an accountant yet and you own multiple properties, ask for referrals from other investors you meet at your local real estate meetings. Or, you can use BiggerPockets.com (this website) to locate investors near you.
How do I keep track of all of these payments?
Well, since I’m pretty simple I use Google calendar. I use this calendar because I have to make certain HOA payments at different times of the month. I have a townhouse in Manassas, VA where the HOA dues must be paid by the 5th of the month or they’re considered late.
I have another townhouse in Manassas where the payments aren’t due until the 15th. And, I have a townhouse in Stafford, VA where the payments aren’t due until the 31st of the month. Obviously, I want to keep my money in
my checking account as long as possible, so I make various payments at different times; the calendar helps me track it all.
How Do Your Tenants Pay Their Rent?
Now, besides using online bill pay, I also highly suggest you receive electronic rent payments. You can use companies such as PayLease or ClearNow. however, they’re not really necessary. You can just have your tenants use ACH direct deposit instead.
In fact, I now require my tenants to use direct deposit. But I do have tenants that have been with me for years who I still allow to pay by check. And guess what? Last month one of my tenant’s checks got lost in the mail. I know it got lost because this is an honest tenant who has always paid on time. Also, several years ago I had a tenant lose two checks in a row in the mail and I found out there was a new mailman in the area (you really have no idea how many pieces of mail get lost every year).
Anyway, every time you’re doing a real estate activity I hope you’re asking yourself, “Is this the highest and best use of my time and does this make my business less complicated.” Online bill pay, an online calendar and getting your tenants to use direct deposit are “yes” answers to the above questions.
By the way, you can also setup automatic bill payments; that way you never have to worry about late fees (a stupid and unnecessary waste of your hard earned money).
Free eBook from BiggerPockets!
Get The Ultimate Beginnner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delievered straight to your inbox twice weekly!Source: www.biggerpockets.com