First Rental Property

Hi Friend,

I hope you are doing well.

If you are looking to purchase your first rental property, you may have a question or two about rent collection.

If you do, that is normal.

A lot of new real estate investors have questions regarding this topic.

I often get asked by new landlords how they should be collecting their rent from their tenants.

There of course is a variety of ways in which you can do this.

In this blog post, I am going to outline for you a number of these methods as well as some of the potential pros and cons of collecting rent in these various manners.

Here are the methods in which you can use to collect rent from your tenant.

1) Post Dated Cheques

When your tenant first moves into your rental property, you can ask them at the beginning of their lease term to provide you with a series of post dated cheques.  Many landlords do this, because this is a method that works.

This mode of rent collection is both easy for the landlord and easy for the tenant.

It is easy for the landlord because, they do not have to make monthly trips to the rental property to pick up the rent.

It is easy for the tenant because they do not have to arrange their schedule and make time to meet their landlord each month.

There is also a big downside with collecting rent in this manner.

Since the landlord is not travelling to and meeting with the tenant each month to pick up rent, there is reduced opportunity to meet the tenant face to face and build a strong relationship.

2) E-mail Money Transfer / Bank Transfer

In this day and age, technology is awesome!  There are new options available to us in the world of banking than ever before. An example  of this is the email money transfer.    Tenants can now transfer to their landlords their monthly rent in the form of an email money transfer.  This is an efficient way to collect rent and it saves time for both the landlord and tenant.  Scheduling a time to meet to pick up rent in person can sometimes be challenging.  This mode of rent collection solves that problem.

3) Pick Up Rent In Person – Cash or Cheque

Although not practical in every case, this is my favourite mode rent collection.  This is my favourite mode of rent collection because it allows you as the landlord to build a strong relationship with your tenant on an ongoing basis.

Not only does it allow you to build an ongoing, strong relationship with your tenant, this strategy allows you to check on the property on a monthly basis.  If you have great tenants, you get to see each and every month how well they are taking care of the property.  On the flip side, if you have tenants that you are not too sure about, this method allows you to carefully observe the condition of the property.

So there you have it.  These are three modes of rent collection.  There are other ways in which you can collect rent, however, as a new real estate investor, you should focus your efforts on one of these 3 methods.

Happy Investing!

Neil Uttamsingh

ps: If you are looking to buy your first rental property, sign up for the First Rental Property Newsletter.  You can do this by providing your name and email address at the top right hand corner of the blog.  If you do, in the Newsletter you will receive tips and tricks from experienced real estate investors on how to buy your first rental property.

pps: I am a Licensed Realtor in Ontario and I help people like you buy their first rental property everyday! I personally own Hamilton real estate, Oakville real estate and Toronto real estate.   If you need help purchasing your first rental property or your next rental property, write to me at NEIL@FIRSTRENTALPROPERTY.COM. I will help you negotiate the best price, terms and conditions on your rental property. Buying in the US? No problem!  I will refer you to one of my trusted partners.  Happy Investing!  🙂