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  • HMO & Multi-Lets

    Collecting Rents

    I'm loking at setting up my first HMO/ multi let and am trying to set up a system for recieving rents.
    Aside from the obvious standing order and collecting the cash in person what other ways do you use to get your money without spending all day running around chasing payments especially when the property's a few miles away.
    Basically i'm looking for the most hands off system that you can think of!
    Thanks john
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    Hi John
    I would also recommend that you arrange for all the standing orders to be on the same day of the month then you have a small window in which you can be alerted if payments are not received, you may have to pro-rate the first payment if the tenancy starts mid month, but build this into the tenancy agreement as well or you will be trying to track multiple payments arriving at random times.
    It also might be worth you posting the signed S/O form to their bank, at least you know they have got it then and in plenty of time.
    Regards
    Dave Winter
    Property Investment & Business Funding Solutions
    Follow us on Twitter
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    I would not pro-rate the first month. I want the tenant moving in to pay the maximum to show that they can do so. I pro-rate the 2nd month if that is what is needed to get things back to the 1st of the month.
    John Corey
    Follow me on Twitter-> https://www.twitter.com/john_corey
    https://www.ChelseaPrivateEquity.com/blog
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    John,
    That best ever system.... is to vet your tenants carefully and create/promote an environment that promotes good behaviour. Ok i know that's probably not you wanted to hear or something you already know, but you'd be surprised at the number of landlords who jut take 'any' tenant or fail to do their due diligence. (btw I’m not making a personal judgement just trying to be helpful)
    I’d also agree with the above; never accept cash. I always get them to set up a standing order and put a reference on it e.g. 'prospectplaceRoger'.
    Also with many banks, including Barclays, you can set up a 'pot' account or an additional account to your main one (with the same bank) and have rents go into there, therefore you can spot missed payments easily.
    If it’s a DSS and they don’t have a bank account then set up a credit union account as the barrier to entry is very low and it can do the same things as a regular account.
    Also I'd say if there is a missed payment do not go round to collect it. You've got to enforce a sense of 'tenant responsibility' so you have to let them go through the pain of having to go to the bank in order pay you. Basically the idea is to attribute as much pain as possible to late/missed payment and as much pleasure as possible to prompt payment.... I think I've been listening to Anthony Robins for too long!!
    To that effect I often send all my tenants chocolates to celebrate their ‘6 months’ anniversary in the property! Some people say it’s a bit OTT but I’ve ‘created’ tenants who always ring me if their is a problem with rent and tell me exactly when they will pay and they always do.
    To be honest I might start a thread on 'producing' good tenants and I absolutely love interacting with the tenants good and bad as i often find that the quality of the tenant is not simply deduced from the due diligence prior to them moving in but also the environment of open communication and tenant responsibility that you create during the ensuing months.
    I hope that helps.
    Regards,
    Ahm
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    Hi Ahnwaah,
    If I was ever in the position of having a landlord I would want one like you, although I would prefer wine to chocolates. ;-)
    Joking aside I totally agree that meeting your tenants is very helpful in building up trust. My properties are 100s of miles away but I still try and meet them so that they can put a face to their "landlord". Due to the distance this may be after they are actually in but I completely trust the judgement of my LA, if they get the nod from her I know I will have done the same.
    Regards
    Steve
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    Hi John,
    I do not have any experience of HMOs but I would certainly not want to have to go and collect rent. SOs should be the way ahead, I was going to add "take it to their bank" myself but I was pipped to the post on that one.
    I hope to be in Anfield some time next week so I will give you a ring.
    Have a good weekend
    Steve
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    Nick,
    If a tenant to be has a cash flow problem before they move in I want them to solve it. I do not care if they need to borrow from someone else. They just need to demonstrate that they can get the cold hard cash to me before moving in. No cash, no keys.
    John Corey
    Follow me on Twitter-> https://www.twitter.com/john_corey
    https://www.ChelseaPrivateEquity.com/blog
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    Thanks everyone for your input.
    I Thought that it would be the way forward using S/O i do this with my single lets already, you never know someone might have created a better way of collecting multiple rents from one property. Its always good to get a bit of advice from people that are already doing this, just trying to cover all bases to make it easier to set up.
    As for vetting the tennants i think (touchwood) that thats one thing i'm good at, as they are all local you can build a rapport with them and they know where they stand all seem to be a decent bunch as well.
    Never had a late payment or problem with any of them, they all know that if there is any problem at all they just phone or text and it gets sorted by me straight away.
    Steve
    Got your message, look forward to hopefully meeting you some point this week up in sunny liverpool.
    john
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    Nick,
    I also believe in being very prompt in paying the money back to a tenant. The deposit is their money (assuming no damage) and there is no reason to drag out the repayment. The agency sounds like a crap organization.
    John Corey
    Follow me on Twitter-> https://www.twitter.com/john_corey
    https://www.ChelseaPrivateEquity.com/blog
    0
    0

    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    We self manage all our properties and don't use agents. All the rentals are due on the 1st of the month. We give them a standing order mandate with a payment date of the 27th of each month. Payment times vary from 2 hours to 3 days depending on who they bank with but it ensures we get the money in on the 1st. By having them all due on the 1st of the month, we quickly know who has paid and who has not as we mark it off on a payments due listing showing every tenant and the amount due.
    After 7, 14 and 28 days overdue, we have specific actions which we take e.g. phone calls, emails, texts, letters, visits etc written down in our procedures manual. Everything is systemised and documented and our tenants know we are on the case. We go online to check our bank accounts every day! As a result, they tend to pay us on time and arrears management is less time consuming for us with a system in place
    Adrian Standing
    https://www.juniperproperty.com
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    Adrian,
    You sound like you run a business rather than play around as a property investor. Well done.
    John Corey
    Follow me on Twitter-> https://www.twitter.com/john_corey
    https://www.ChelseaPrivateEquity.com/blog
    0
    0

    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.