Prepay rent? (by Kathy B [CO]) Feb 8, 2019 7:09 AM|
Prepay rent? (by cjl [NY]) Feb 8, 2019 7:14 AM
Prepay rent? (by plenty [MO]) Feb 8, 2019 7:15 AM
Prepay rent? (by Nellie [ME]) Feb 8, 2019 7:23 AM
Prepay rent? (by Vee [OH]) Feb 8, 2019 7:24 AM
Prepay rent? (by DJ [VA]) Feb 8, 2019 7:39 AM
Prepay rent? (by Kathy B [CO]) Feb 8, 2019 8:19 AM
Prepay rent? (by S i d [MO]) Feb 8, 2019 8:22 AM
Prepay rent? (by Jan [MO]) Feb 8, 2019 8:30 AM
Prepay rent? (by LindaJ [NY]) Feb 8, 2019 8:32 AM
Prepay rent? (by rentON [PA]) Feb 8, 2019 9:08 AM
Prepay rent? (by Ken [NY]) Feb 8, 2019 10:20 AM
Prepay rent? (by Shelby [IA]) Feb 8, 2019 10:39 AM
Prepay rent? (by Elena [PA]) Feb 8, 2019 1:39 PM
Prepay rent? (by plenty [MO]) Feb 8, 2019 2:02 PM
Prepay rent? (by Busy [WI]) Feb 8, 2019 2:04 PM
Prepay rent? (by 6x6 [TN]) Feb 8, 2019 3:09 PM
Prepay rent? (by AllyM [NJ]) Feb 8, 2019 4:58 PM
Prepay rent? (by small potatoes [NY]) Feb 8, 2019 8:46 PM
Prepay rent? (by Robert J [CA]) Feb 8, 2019 8:50 PM
Prepay rent? (by myob [GA]) Feb 9, 2019 5:25 AM
Prepay rent? (by Jeff [CO]) Feb 9, 2019 8:29 AM
Prepay rent? (by Oregon Woodsmoke [ID]) Feb 9, 2019 9:29 AM
Prepay rent? (by 6x6 [TN]) Feb 9, 2019 3:38 PM
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Prepay rent? (by Kathy B [CO]) Posted on: Feb 8, 2019 7:09 AM
One of our tenants has asked if they can pay three months worth of rent next month. They've been good tenants, paying promptly every month. We could handle the bookkeeping side of it. We'd show a credit for their account and make sure they got a statement every month to see where they're at.
1. Do you see potential problems with that arrangement?
2. Are we allowed to ask why they have that much money suddenly? Or is it even a concern?
Thank you for your input! --199.47.xx.xx
Prepay rent? (by cjl [NY]) Posted on: Feb 8, 2019 7:14 AM
They may have just received or are expecting to receive a large tax return and just want to "pay in advance" instead of squander the money.
I've had tenants ask if they could pre-pay a month in advance because they were going on vacation (I know - not quite the same thing). I've also had a tenant a few years back that received a good size of money back and paid in advance as well (I think 3 - 6 months - I don't recall). It's a VERY good idea to provide them with a monthly statement as they could easily "forget" when their next payment is actually due.
Outside of that - I wouldn't really worry about it. If it were me, I'd pay off some other bills but maybe they don't have anything to pay off. I'd also (if it were me as the renter) put it into a savings account/higher interest account and pay it on time. I know it wouldn't be much interest but just the same. --209.217.xxx.xx
Prepay rent? (by plenty [MO]) Posted on: Feb 8, 2019 7:15 AM
The question is WHY do they want to pay 3 months all at one time,,, when they can pay one month three times!! Are they traveling? Pre Occupied? Is there some reason that is negative to you ??? Good to ask, I'm hoping to learn something by following the replies. Why to you think they want to pay three months up front? How long have they been your tenant? --184.206.xxx.xxx
Prepay rent? (by Nellie [ME]) Posted on: Feb 8, 2019 7:23 AM
Some states have a maximum amount of rent ahead you can collect. I would find that out first. --70.16.xxx.xxx
Prepay rent? (by Vee [OH]) Posted on: Feb 8, 2019 7:24 AM
Something like this is common with students and corporate housing, but in 8-11 month plans, you keep it in a separate account and give monthly statements showing damage and rent being decucted, this could be a family dividing or a tax return?
Prepay rent? (by DJ [VA]) Posted on: Feb 8, 2019 7:39 AM
I agree - I wonder WHY. Are they so bad at money management that they can't hold it in an account for 3 months, while paying on time?
I also say check your state laws - there may be restrictions on how much you can take in advance. And how you need to account for it/escrow it, or whatever
Also, if they pay for 3 months, and then decide in 2 weeks to start breaking a bunch of rules, are you restricted in your ability to evict?
Just some thoughts to consider. --68.10.xxx.x
Prepay rent? (by Kathy B [CO]) Posted on: Feb 8, 2019 8:19 AM
Thank you for your input! I checked Colorado law (thanks for the tip) and there are no restrictions on prepaid rent here. I suspect these tenants are not great money managers and want to be sure their rent is paid. They know we will evict promptly and they have been great in paying. (We may have put the fear of God in them when we checked them in.) They are month-to-month, BTW (Just adding to the discussion).
I hadn't thought of a tax refund but that easily could be what has happened. I think we'll let them pre-pay and send monthly statements. I'll report back if we uncover any unexpected problems. Thanks again! --199.47.xx.xx
Prepay rent? (by S i d [MO]) Posted on: Feb 8, 2019 8:22 AM
some people are quirky about paying ahead. I have someone now who is one month ahead. They started out paying on time, then each month their payment for the next month got earlier and earlier. On Feb 1st, I received their payment for March....go figure.
So I'm not as concerned about paying ahead as I am the confusion that can create.
Let's say they've paid 1 month in advance (like my tenants) but damage something that costs $100. You bill them, but they don't send the extra money. They figure, "hey, it's ok, we paid ahead." Rent time comes due and their account is short $100 for rent. Do you chage them late fees? do they get upset about that since they paid ahead?
Some folks have a weird idea about "fairness". "I paid you 3 months in advance, so you should cut us some slack on damages/late fees."
Yes, I've heard that line before. People get it stuck in their head that "X-month is paid", and even if something happens later that taps into prepaid funds, they still think X-month is paid.
I see no problem with it, but it can become quite a game. Up to you if you want to play it. Be sure to review your state's laws on whether or not you can accept pre-paid rent. --173.20.xxx.xxx
Prepay rent? (by Jan [MO]) Posted on: Feb 8, 2019 8:30 AM
I've had tenants who give me post-dated checks, usually 5-6 months in advance. IE, they make out a rent check payable to me, post dated with the date it is due. I promise not to deposit it until the due date, and I don't.
This means tenants don't have to think about paying the rent every month. It's easier for them, and great for me.
Why don't you suggest your tenants give you three post dated checks for the upcoming rent due, then deposit them on the due date. That way, your bookkeeping doesn't vary. Tenants know you have already been paid, even if you don't deposit the checks until the due date. Tenants know you could probably deposit the checks now if you wanted to, and they would clear.
If your tenants issue is poor money management and/or forgetting to pay the rent, this will help them. If your tenants do NOT want to do it this way, that means something else is going on. And I'd want to find out what it is.
Prepay rent? (by LindaJ [NY]) Posted on: Feb 8, 2019 8:32 AM
If they have a history of being a good tenant - WITH YOU. Why not? as long as your book keeping can handle it (nice to ask). Since it isn't spanning calendar(tax years) it won't affect income in one year over the other.
The only issue I can see is if they have paid the rent, and you have accepted it, and they are M2M, you may not be able to give them a months notice ahead of the month that rent will be due again. In other words you are contracting with them for the next 3 months. Of course you have an idea of what kind of tenant they are.
I would also be sure to let them know a week ahead that they have paid their rent for the month and a week ahead that the rent is due on the next 1st.
Prepay rent? (by rentON [PA]) Posted on: Feb 8, 2019 9:08 AM
As long as they are good Tenants it should not be a problem with collecting 3 months rent in advance. It's very difficult to remove a Tenant for any other lease violations when you do have rent that is paid in advance! Ask me how I know? --67.165.xx.xx
Prepay rent? (by Ken [NY]) Posted on: Feb 8, 2019 10:20 AM
Who cares why,take the money. --72.231.xxx.xxx
Prepay rent? (by Shelby [IA]) Posted on: Feb 8, 2019 10:39 AM
I had a renter that as soon as she got her tax refund she paid a whole year in advance. Ended up moving out end of Nov one year so I refunded her December rent. No big deal. She prepaid because shes bad at managing money and wanting to not worry about rent for a year. When I first met my husband he used to pay his house payments a year in advance for the same reason. He was buying on contract. --173.26.xx.xxx
Prepay rent? (by Elena [PA]) Posted on: Feb 8, 2019 1:39 PM
My tenant jsut asked me the same question. I really don't care why, but he explained that he just got a deposit on a big catering order, and wants to park money with me for future rent. I see no problem with that. --141.158.xx.xxx
Prepay rent? (by plenty [MO]) Posted on: Feb 8, 2019 2:02 PM
Well from what you wrote they may forget to pay monyh four or prepare to pay after they relax and start spending their money. Poor planning would be a red flag for me. --99.203.xx.x
Prepay rent? (by Busy [WI]) Posted on: Feb 8, 2019 2:04 PM
My school employee does that for summer. Great tenant. Bookkeeping does get a bit hairy though. She and I both love Zelle so we can look up to see what all has been paid, if needed.
I haven't bothered to find out for sure if that flies with Wisconsin law. Shhhh..... --70.92.xxx.xxx
Prepay rent? (by 6x6 [TN]) Posted on: Feb 8, 2019 3:09 PM
Great question to ask.
My prospects hopefully moving in next weekend are students paying 6 months in advance.
I like your idea of sending a statement every month to keep things in check.
I hope it it works out for both of us.
Others have good point about damages and things getting mixed up. --73.120.xx.xxx
Prepay rent? (by AllyM [NJ]) Posted on: Feb 8, 2019 4:58 PM
Maybe they are about to do something for which you would evict them and want to pay ahead to firm up their position? --173.61.xxx.xx
Prepay rent? (by small potatoes [NY]) Posted on: Feb 8, 2019 8:46 PM
I don't see any problem taking 3 months in advance. 6 months or a year in a non-student rental- red flag. If you do take the money, don't take post dated checks. The reason they want to pay you now is they came into money, and when you go to cash that post dated check the funds might not be there. --100.2.xx.xxx
Prepay rent? (by Robert J [CA]) Posted on: Feb 8, 2019 8:50 PM
When a tenants volunteers to pre-pay rent, there's nothing wrong with this. However, once a tenant paid 6 months rent in advance, then filed for bankruptcy -- listing the pre-paid rent as an asset.
The bankruptcy court demanded that I give them those funds, or else. In my case by the time I summoned to court for non-compliance, three months had passed and the amount they requested was no longer correct. I did a stall and delay. --47.156.xx.xx
Prepay rent? (by myob [GA]) Posted on: Feb 9, 2019 5:25 AM
When I read some questions here I sit just shaking my head. This is one of those. WHY do you care WHERE they got the money? Why do you all continually make problems and create waves for yourself?
If you need an answer that will work for the next 15 years- they got their income tax check and want to get ahead.
Now take the money and in 75 days send them a reminder that their prepayment plan comes to an end at the end of the month -- 15 days.
Tenant currently in your place shoving rent in your face to pay 3 months in advance? #1 don't know if you should take it? #2 where did it come from? # 3 What if I take it?
Prepay rent? (by Jeff [CO]) Posted on: Feb 9, 2019 8:29 AM
Why not. And I wouldn't care if it's legal or illegal. Who is going to tell the state? (I see that it's legal here).
There are enough government idiots telling us what to do, but that's another story. --76.120.xx.xx
Prepay rent? (by Oregon Woodsmoke [ID]) Posted on: Feb 9, 2019 9:29 AM
I don't accept applicants that want to prepay (except for students with Pell Grants), but for an existing tenant who already proved that they take care of the place, pay the rent, and don't cause trouble, I wouldn't have any problem with it.
The worst I can think of is that the money is severance pay, but you wouldn't kick them out until they stopped paying, anyway, so take the rent and that gives them a bit of time to find a new job while you have your rent money.
Most likely, this time of year, it is their tax refund. --98.146.xxx.xxx
Prepay rent? (by 6x6 [TN]) Posted on: Feb 9, 2019 3:38 PM
myob,As long as the money is green ,right? --73.120.xx.xxx
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