Five Ways to Take Payments that Leave a Paper Trail
When your Optionees make their payments to you, make sure that they do it with anything except for cash! You should take one of the following things:
- Check payments where the tenant receives the cancelled checks and keeps them.
- Cashier’s check (with them down as the remitter and keep the receipt)
- Lock box
- Direct debit
- Teller deposit into an account
Any of these options work instead of cash. These options are recommended because lenders require some sort of traceable way of proving the payments. Since you must have at least the last twelve months of payments for most lenders, then you need to make sure that you and your Optionee are keeping records of the payments.
Here is where we see a lot of investors get cheap! Instead of spending a few extra dollars to have way to track the payments, they would rather save five or ten dollars a month that ends up costing the thousands in the end. Do the math and you’ll realize the savings are not even close to the real cost of being cheap!
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