Payment Collection

Not to long ago I was in a room of very keen property investors and the subject of receiving payments from our buyers came up.

So I went through the different choices we can give our clients

  • Cash – collect it
  • Direct Pay to a bank account
  • Payroll Deduction
  • Direct Debit facilities
  • Management

Collecting cash is not a good idea. Its a poor use of your time and your clients. Plus there is no record of the transaction with a 3rd party.

Direct Payment to a nominated Bank Account used to be the main way things were done. You could get books with numbered deposit slips  from the bank and give them to your clients. Each Pay-in Book had its own number that would show up on your bank statement that was unique o each client. Easy to track, but again your client had to go to the bank each week and line up to pay their payment. Not really practical these days, plus there are extra fees for personal transactions.

Direct payment via internet transfer is fairly common with internet banking. Your client can set up a Periodical Payment each week. Easy for both of you to track, bit of a no brainier.

Payroll Deduction is a great way for your client to pay. They just notify the employer of the amount and the account details and each payday the funds are paid out even before the client sees it. Great for the client as they know the payment is going to happen, easy to track as it is on their payslip and easy for you to track as it will have either the Employers name or the clients name next to the deposit each week.

Banks used to be the only ones offering Direct debit facilities. These days there are many choices and they have a large range of services available and IntPayare very affordable. Companies like Integrapay make Direct Debiting your clients payment easy. They keep a record of it on the website, so tracking is simple and they send confirmation emails when the payment comes through – or doesn’t! This type of system is great and our second choice to Payroll Deduction.

As a property investor, I prefer to spend my time playing with property rather than checking my accounts, recording the payments, chasing up missed payments etc. With my rentals I choose to use a Property Manager to look after the collecting of rent and paying the outgoings (loan, rates, etc). So with  Vendor Finance houses there is now a way to outsource the collectiopaid 3n of payments, payment of the loan, rates, insurance. chasing up of missed payments, setting up payment plans etc. A company like Paid looks after Instalment contracts, Lease Options, Deposit Finance etc. They just send me a statement each month and pay me the funds left after everything else is paid.

This gives your client additional peace of mind as the loan and costs are paid before the vendor gets paid.

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