Collecting money from tenants

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  • Collecting money from tenants

    Hi,

    Having experienced the problem of paying and collecting rent myself I am currently developing a simple online tool to automate the collection of rent for landlords. I was wondering if this was a problem other people experienced? I would also love to hear what people think of the following proposition:

    - Landlords request money from new tenants via easy to use website - sign-up in one click, create new rent bill stating how much to collect and how often in a second click
    - Tenants receive an invite in their email with a link to the website where they can easily set-up a paperless direct debit agreement online
    - Landlords are paid automatically on the agreed schedule
    - Landlords can log-in to the website anytime to see an overview of existing payments, alter existing agreements or set-up new ones at the click of a button

    I was wondering if this is something that you saw value in over existing options. And if it were to charge a %age on each transaction, how much would you be prepared to pay?

    Thanks in advance for any responses!

    Matt

  • #2
    I don't think landlords are going to be impressed with a rent collection service that adds yet more costs.

    What if the tenants don't pay? Do you send the 'virtual' boys round?
    I offer no guarantee that anything I say is correct. wysiwyg

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    • #3
      Sorry, no one gets their hands on my rent money except me. I'm sure you would have some kind of insurance in place in case you went bust and took my rent money with you?

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      • #4
        I already use a simple to set up rent collection arrangement. You must try it - you simply give your tenant a pro-forma standing order mandate form (available from this website and other free online services), already completed with your account details, and ask them to please set up a payment on the required date into the account specified.

        I can simply then login to to check rent has arrived on another free website - its called online banking!

        Sorry for the sarcasm, but I'm with jta - why pay for something else when the facilities are already there, free, gratis and for nothing!

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        • #5
          Thanks for all the helpful responses so far, a couple of quick thoughts:

          JTA - the tenants would be credit checked instantly when they sign-up online and then the money would be collected by Direct Debit i.e., automatically pulled from their account as agreed in the Direct Debit mandate. If landlords are using letting agents to collect the money then this would save a significant amount of money, if they are using standing order it would save time and guarantee payment.

          Snorkz - that's interesting. How do you collect currently? Standing order, cheque, online banking etc? The tenant's money would be guaranteed by the Direct Debit guarantee and the landlord's would be guaranteed by the sponsor bank which provided the client money's account it was collected in. Would that still be a concern?

          Lesley-Anne - completely understand your point. The value add of the service would be three-fold: 1) it guarantees that you will receive payment on the agreed date; 2) you can easily collect money for other costs or vary the rents without having to set-up a new order; 3) that you would save time having to check your online bank for individual transactions as you would receive email or text notification when you got paid.

          Having seen all of this is this still not at all of interest? If so, please don't hold back as you will be saving me a lot of time.

          Thanks again for all the feedback so far, if anyone else has any thoughts please do respond.

          Matt

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          • #6
            Originally posted by Matt Robinson View Post
            Thanks for all the helpful responses so far, a couple of quick thoughts:

            Snorkz - that's interesting. How do you collect currently? Standing order, cheque, online banking etc? The tenant's money would be guaranteed by the Direct Debit guarantee and the landlord's would be guaranteed by the sponsor bank which provided the client money's account it was collected in. Would that still be a concern?
            SO the Direct debit would link LL's bank account with T's bank account... As far as I am aware most personal bank accounts cannot be the beneficiary of a direct debit, which is why they have the direct debit guarantee.

            Anyway the long and short of it is, if people couldnt be arsed to collect money themselves they'd use an agent, not some dubious website.
            [I]The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the relevant facts[I]

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            • #7
              As far as I am aware most personal bank accounts cannot be the beneficiary of a direct debit,
              Can you expand on that Johnny, I thought a DD could be made to any account.
              I offer no guarantee that anything I say is correct. wysiwyg

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              • #8
                Originally posted by jta View Post
                Can you expand on that Johnny, I thought a DD could be made to any account.
                I was given a load of guff by someone about having to have a service user number which requires sponsorship from banks and they only do that for companies apparently or similar. It may have been a useless person giving me advice but apparently as the payee can alter the amount withdrawn they require stricter requirements and authorisation than a standing order.
                [I]The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the relevant facts[I]

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                • #9
                  OK, I'm obviously confusing SO's with DD's.
                  I offer no guarantee that anything I say is correct. wysiwyg

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                  • #10
                    That's correct. Part of what I was hoping to do was give individual landlords access to these cool banking tools which give them more flexibility and control over payments. The problem, as Jonny mentioned, is that obviously there's an associated cost... I was thinking around 0.5% with a max cap per transaction of a few pounds, but from what I can hear that does not sound attractive to you guys.

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                    • #11
                      Originally posted by Matt Robinson View Post
                      That's correct. Part of what I was hoping to do was give individual landlords access to these cool banking tools which give them more flexibility and control over payments. The problem, as Jonny mentioned, is that obviously there's an associated cost... I was thinking around 0.5% with a max cap per transaction of a few pounds, but from what I can hear that does not sound attractive to you guys.
                      The issue is (dont get me wrong I dont want to discourage you!)... it still requires interaction which probably would take as much time as changing a date on a template. Most landlords who are in it for the long haul are very concious of costs and you really have to be. It's not as lucrative as everyone thinks!
                      [I]The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the relevant facts[I]

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                      • #12
                        Regarding direct debits, if I was a tenant, I wouldn't want the LL to have any DD access to my account. I'd want to know exactly what was being taken and when, hence I would suspect SO would be a T's preference every time.

                        As for collecting "other payments" via the online system, again there would need to be control on both sides, to prevent LL taking what they wanted without T giving consent. We get many posts here about tenants quibbling over LL charges for all sorts of things. I can see LLs having DD access would be open to all sorts of abuse!

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                        • #13
                          T's would be sent a notification every time money was taken by automated email and/or text (whatever they prefer). You would also require express permissions for any variance of an existing order or the creation of new orders, this would mean T's would be sent an email or a text to which they could either click a button in the email or send a text to confirm. You raise an interesting point though.

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                          • #14
                            Originally posted by Matt Robinson View Post
                            T's would be sent a notification every time money was taken by automated email and/or text (whatever they prefer). You would also require express permissions for any variance of an existing order or the creation of new orders, this would mean T's would be sent an email or a text to which they could either click a button in the email or send a text to confirm. You raise an interesting point though.
                            This sounds more and more complex. Furthermore if T's have to agree to it, I cannot see any advantage in it, after all if they're dodge, they'll just press the no button surely?!
                            [I]The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the relevant facts[I]

                            Comment


                            • #15
                              That would be for a new order i.e., they would just have to click a button or send a text saying 'Yes' instead of having to print, fill in, sign and post a new standard order.

                              Once an order was made the money would be taken and the L would receive it on the agreed day without having to worry. The T would simply receive a notification every time a payment was made so that they knew what was going on.

                              Thanks by the way, I really appreciate you taking the time to tell me what you think. Out of interest how many properties do you rent? Is there a particular type of landlord you could see being attracted to a really simple automated online solution with a small %age fee?
                              Last edited by Moderator2; 23-06-2011, 20:46 PM. Reason: Link removed

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