Editor’s Note: Real Estate Investment Software Blog is committed to furnishing its readers with free real estate investing tips and helpful real estate investment information. Here’s an article I came across that new real estate investors might find interesting about rent collection.

by Kevin Kiene

Collecting rent from a tenant is the cornerstone of investing in rental properties. For some landlords, collecting rent is not difficult but for others it can be a real struggle.Step One, Tenant Screening

Through screening is the first step to finding tenants that pay on time. Your best bet is to get a credit report, an eviction history report and perform a criminal background check on your tenants. All of which can be done online. You can also call the current or previous landlord(s) for a reference. Some landlords will also visit the property where the applicant is residing, checking the condition of the property and cleanliness of the tenant. But, do not settle for tenants that don’t meet your qualifications, spend more time screening and checking your applicant’s background and you will save a lot of time and problems in the future.

Rent collection Best Practices

You really need to be very consistent right from the beginning of the lease. Start out by explaining to your Tenants in detail, the terms of payments in the lease and the consequences of paying their rent late. You must set a precedent right from the beginning as soon as a tenant fails to pay rent on time. Once you start accepting excuses, you will have lost your footing. This will give the tenant the assumption that it is ok to pay the rent late if they have a good reason or excuse. The next time your tenant has a problem paying the rent, they will expect you to be understanding once again. This sets the tone for a frequently of late rent payments or worst an eventual legal matter.

Be sure to keep all communication in writing with your tenant to avoid the “he said, she said” scenario. Send your tenants a late notice as soon as rent becomes late. So, if the rent is due on the first and it is not received by the first, send a notice out on the second. As soon as a tenant owes a late fee, send them another notice and be sure to never wave the late fee. Don’t make any special “deals” waving the late fees at anytime. As soon as you negotiate with your tenants, they will tend not to take you very seriously as a landlord and may try to push things even further. It’s a good idea to setup a schedule to send out a sequence of late notices. Mark on a calendar when you will be sending these notices out, if need be.

Check with your local jurisdiction to find out the regulations for eviction. Each state, county and/or jurisdiction may institute requirements for how many days may pass before legal proceedings can be brought against the Tenant. There may be certain notices required such as a “Notice to Quit,” before you may even file for eviction in a local court. If after several attempts are made to collect the past due rent, follow your jurisdiction rules as soon as possible. Eviction can be a lengthy battle so don’t hesitate to file, you can always withdrawal if your tenant pays.

Be clear right from the beginning of the landlord/tenant relationship to set an example in your collection efforts. Do not get emotionally involved or feel sorry for a tenant’s situation. Keep it business, after all you invested a lot of time and money in order to make money not lose money.

About the Author

Discover the internets only document system designed for landlords with auto-fill. We offer Lease Agreements, Rental Applications, Late Notices and a complete library of landlord forms. http://www.ezlandlordforms.com

I read recently that more than $2 billion is spent annually in the US on real estate investment education. With so many people willing to pay big bucks to learn about real estate investment, I am embolden every now and then to slip my real estate investment software into the rotation of free real estate investment information this site provides.

It seems like a fair tradeoff: hours of free real estate investment information for an occasional 2-minute plug about real estate investment software. (Hey, it sounds like television).

This segment lets you in on how it all started.

ProAPOD: The Untold Story

In 1996 I determined to build my real estate business with multifamily properties and purchased a real estate investment software program for $350. It was magical. The idea that calculations and reports needed for multifamily presentations generated automatically simply amazed me; though it was not aesthetically pleasing or an easy software program to use.

Without a point of reference, however, and given we were all still learning about computers, the fact I needed to call the developer about 10 times that first day (and numerous times after) didn’t set off any alarms; it seemed normal to struggle with software. Of course looking back, it’s like having confronted a dinosaur and living to tell about it. Though, oddly, that particular real estate software is still being sold (at a higher price) and seemingly hasn’t changed a macro-pixel.

In 1999 I purchased my second real estate investment software for just under $500. Head and shoulders above that first program, the problem was that it was overloaded with stuff beyond multi-family analysis while lacking more of what should have been included. As a result, one year later I developed my own Excel-based spreadsheet by gleaning from the best of both programs; and then added what I deemed important. ProAPOD was conceived, but not yet a glimmer in my eye.

It wasn’t until other real estate agents begin asking to obtain my spreadsheet that I considered the idea of converting it into true real estate investment software. Six long and grueling months later ProAPOD Real Estate Investment Software was born and, as they say, the rest is history.

Over the past six years, I am delighted to say, my real estate investment software has become a major player in a very competitive software market. Foremost, because ProAPOD (as originally intended) is easy to use and does provide all essentials required for cash flow, rate of return, and profitability analysis on rental income property. It came to national attention in May 2003 when REALTOR®Magazine featured it as a “Cool Tool,” and since has become the real estate investment software of choice for real estate agents and investors nationwide.

I am also glad to say that no one has ever demanded their money back (an unfounded fear when ProAPOD’s first copy sold), and ProAPOD real estate investment software continues to remain a bargain. Or as one user said, “ProAPOD is the best and most affordable software of its kind on the market today.”

Good words about real estate investment software that all the while, throughout those late nights and early mornings in development, was meant to be good.

We are discussing creative investment tools real estate investors might use to the next time a property of interest turns up that might not otherwise (perhaps because of price, terms, or lack of buyer cash) be thought worth pursuing. We already covered option, sweat equity, and lease with an option to purchase. In this final segment we’ll discuss secondary seller-held financing.

1. Option to purchase
2. Sweat Equity
3. Lease/purchase
4. Secondary seller-held financing

Secondary Seller Financing

Secondary seller financing is when a buyer acquires a property and the seller of the property holds paper for part of the deal. If the seller holds a mortgage a mortgage secured by the property being sold it is called a purchase money second mortgage. When the buyer gives the seller a mortgage on another property it’s simply reffered to as secondary financing.

EXAMPLE A: Buyer wants to purchase an apartment complex selling for $500,000 and knows an institutional lender that would give her a first mortgage in the amount of $350,000. The buyer doesn’t want to put more than 10% down, so she gets the seller agree on a full price offer contingent on the seller carrying a second mortgage in the amount of $100,000 secured by the apartment complex. For a full price offer, the seller agrees, and the buyer winds up closing the transaction with the desired $50,000 cash down payment. This is a purchase money second mortgage.

EXAMPLE B: Same scenario, but in this case the Buyer asks the seller to extend a second mortgage secured by a large office complex the buyer already owns. The value of the office building is substantially higher than the apartment complex, has a low first mortgage, and thus has substantially more equity. Again, the seller agrees and the buyer is able to purchase the aparment complex with the desired $50,000 (or 10%) cash down payment. This is a second mortgage.

How did the secondary seller-held financing benefit the buyer?

The buyer achieved better leverage. Instead of 30% cash down, the buyer purchased the property she wanted with just 10% down. That kept her from having to dig into her pockets for an additional $100,000 and makes that money available for another investment. Moreover, the buyer was able to avoid the problems and cost of obtaining an institutional loan.

For your information: ProAPOD real estate invesment software and real estate investor software compute the payments for up to three loans. You can tour program screenshots at real estate investment software program tour.