Automate Your Rent Collection
As a full-time Canadian real estate investor or landlord, you only have enough time in the day, and that time should be spend creating massive and passive income for yourself by acquiring more property and/or making more deals. So having to go and collect rent cheques every month, depending on the amount of your portfolio, can be quite time-consuming.
The reality of the bounced cheque
If you collect a cheque and the tenant has bounced the cheque, typically you won’t find out until 12 to 14 days, and that bounced cheque is rewarded to you by coming in the mail. And at that point you could be behind the eight-ball, and running after tenants for cheque after cheque that may continue to bounce. Not a very good situation for a full-time real estate investor! We need to find a way of ensuring that we know who has not paid on time.
Two key ways to combat the bounced cheque
1. We can create an account for ourselves at a local bank branch that is nearest the unit. Everybody in that property can then go to the same branch on the first day of the month, and deposit the money into the account that you have given them. On the second of the month, you can go online and see who has put their money in and who has not. And then you can take care of any problems right away, rather then waiting 12 or 14 days as you would with cheques.
2. The other way that we can get automated rent is by getting direct debit from their employment, so it comes right out of their wages right into your bank account. There are a number of ways of doing it, and it is quite legal in more areas of the civilized world. This way, you can get rent going directly into your account. I would utilize the same idea, if there are people that are in that unit that are paying the same rent.
So in conclusion, make sure that you automate your rent in some way so that you can give yourself more time and be able to take care of any rental default immediately as it happens.
Happy rent collecting!
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