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Revelate
Posts: 8,896
Registered: ‎12-30-2011
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Re: Paying Rent W/ CC (details inside)

[ Edited ]

The average rent in my complex is $1300, and is common for anywhere reasonable around here.  3% is not an uncommon merchant rate for small businesses.

 

ccnewcc, I really have to question your experience on this: losing 50K profit each year as my apartment would, when it's completely unnecessary, will get you replaced awfully quick in most small/medium businesses, and given that most landlords are individuals such as WH (we're not talking the Archstone mega-properties, they may be able to get a lower merchant fee based on volume as an example), frankly 50K / yr makes a material difference to the vast majority of people in general, and on this forum as well.  I don't toss around my income numbers much and I'm not in the top handful here, but I'm likely easily top 5%, and absolutely an additional 50K / yr would make a difference in my life.  That's either a much nicer house to live in, or enough to finance another rental or two, thereby furthering my income.

 

Taking credit cards when your livelyhood is in the margins (have to maintain that 92%+ occupancy rate) given the turnover rate and turnaround time / costs for a given location, doesn't make any sense.  You want to make fractional interest by having a payment a few days earlier?  Go right ahead, it'll never equal the merchant fee these days, not even close when the best CD's are paying out 2% per year, and you're only getting an extra 60 days on that money give or take.  The math just doesn't work, and will be a good way to potentially put you out of business compared to the competitors in any red-water market, which apartment renting definitely is.

 

That's more akin to thinking like a business; idealism based on your own personal wishes will only hurt your financials the vast majority of times and is to be avoided in any business assuming your goal is to actually make money.

 

 

 

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aplast
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Registered: ‎06-20-2012
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Re: Paying Rent W/ CC (details inside)


Revelate wrote:

The average rent in my complex is $1300, and is common for anywhere reasonable around here.  3% is not an uncommon merchant rate for small businesses.

 

ccnewcc, I really have to question your experience on this: losing 50K profit each year as my apartment would, when it's completely unnecessary, will get you replaced awfully quick in most small/medium businesses, and given that most landlords are individuals such as WH (we're not talking the Archstone mega-properties, they may be able to get a lower merchant fee based on volume as an example), frankly 50K / yr makes a material difference to the vast majority of people in general, and on this forum as well.  I don't toss around my income numbers much and I'm not in the top handful here, but I'm likely easily top 5%, and absolutely an additional 50K / yr would make a difference in my life.  That's either a much nicer house to live in, or enough to finance another rental or two, thereby furthering my income.

 

Taking credit cards when your livelyhood is in the margins (have to maintain that 92%+ occupancy rate) given the turnover rate and turnaround time / costs for a given location, doesn't make any sense.  You want to make fractional interest by having a payment a few days earlier?  Go right ahead, it'll never equal the merchant fee these days, not even close when the best CD's are paying out 2% per year, and you're only getting an extra 60 days on that money give or take.  The math just doesn't work, and will be a good way to potentially put you out of business compared to the competitors in any red-water market, which apartment renting definitely is.

 

That's more akin to thinking like a business; idealism based on your own personal wishes will only hurt your financials the vast majority of times and is to be avoided in any business assuming your goal is to actually make money.

 

 

 


sure 3% is not uncommon, but for the amount of volume processed through these mega complexes - im sure they recieve some type of break from their merchant processing company or else they wouldnt accept credit cards. Owners/investors of these types of places are not dumb finacially or business minded alike. and lets think about this - Revelate, Since you brought up margins: wouldnt a company make more money with say a 90% occupancy rate rather than 99%? If a complex is 95% or higher occupied that tells me that the rent is too cheap. so the company raises the rent obviously loses some tenants when their leases are up, but at 90% occupied there is less overhead and will typically collect more in revenue every month. food for thought.

 

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Revelate
Posts: 8,896
Registered: ‎12-30-2011
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Re: Paying Rent W/ CC (details inside)


aplast wrote:

sure 3% is not uncommon, but for the amount of volume processed through these mega complexes - im sure they recieve some type of break from their merchant processing company or else they wouldnt accept credit cards. Owners/investors of these types of places are not dumb finacially or business minded alike. and lets think about this - Revelate, Since you brought up margins: wouldnt a company make more money with say a 90% occupancy rate rather than 99%? If a complex is 95% or higher occupied that tells me that the rent is too cheap. so the company raises the rent obviously loses some tenants when their leases are up, but at 90% occupied there is less overhead and will typically collect more in revenue every month. food for thought.

 


Most landlords and even rental companies are not the mega complexes; as stated in my post, the Archstones of the world are large enough that they almost assuredly get a much better merchant transaction rate than my landlady would (some individual 1500 miles away in Dallas).    You can compete on a number of different things as a landlord and I have zero practical experience with it, but in a competitive market and given that the vast majority of rents in a given area for similar apartments happen to be awfully close to each other unless you're able to charge a higher rent, then 90% occupancy never is as good as even 90.1%. 

 

Unless the demand is much higher than supply (say PF Changs several years back where you just needed to get cozy at the bar and they should've absolutely increased their prices by around $2 across the board on their entrees without loss of table usage), you can't really afford to arbitrarily raise prices in a competitive market.... and there are certainly some people that would move for the extra $40 bucks a month my landlady would have to charge to keep the same profit level, and to what end?  

 

Losing money on a rental property via accepting credit cards won't make sense until everyone pays that way and you can roll it into the rent straight out, which might well happen in our lifetimes, but it's not today.  Today it's just throwing away profit... going back to an earlier point that ccnew made, while I agree using checks is a relic of a bygone era for most things, I stiill write at least one a month, and generally maybe 1-2 others over the course of the year and have done that for the last two decades.... I don't see that changing anytime soon either.

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
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ccnewcc
Posts: 560
Registered: ‎09-29-2012
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Re: Paying Rent W/ CC (details inside)


Revelate wrote:

The average rent in my complex is $1300, and is common for anywhere reasonable around here.  3% is not an uncommon merchant rate for small businesses.

 

ccnewcc, I really have to question your experience on this: losing 50K profit each year as my apartment would, when it's completely unnecessary, will get you replaced awfully quick in most small/medium businesses, and given that most landlords are individuals such as WH (we're not talking the Archstone mega-properties, they may be able to get a lower merchant fee based on volume as an example), frankly 50K / yr makes a material difference to the vast majority of people in general, and on this forum as well.  I don't toss around my income numbers much and I'm not in the top handful here, but I'm likely easily top 5%, and absolutely an additional 50K / yr would make a difference in my life.  That's either a much nicer house to live in, or enough to finance another rental or two, thereby furthering my income.

 

Taking credit cards when your livelyhood is in the margins (have to maintain that 92%+ occupancy rate) given the turnover rate and turnaround time / costs for a given location, doesn't make any sense.  You want to make fractional interest by having a payment a few days earlier?  Go right ahead, it'll never equal the merchant fee these days, not even close when the best CD's are paying out 2% per year, and you're only getting an extra 60 days on that money give or take.  The math just doesn't work, and will be a good way to potentially put you out of business compared to the competitors in any red-water market, which apartment renting definitely is.

 

That's more akin to thinking like a business; idealism based on your own personal wishes will only hurt your financials the vast majority of times and is to be avoided in any business assuming your goal is to actually make money.

 

 

 


Again, not sure what you're driving at here?

 

CDs?  What are you talking about?

 

 

Oh, I get it.  You're wanna these fake investors. Is that it?

 

 

I call them fake investors cuz in reality they have a 9-5 office job bearly making 60K and bearly paying their own mortgage but they go around telling everyone they're an "investor" cuz they "own"  3 rental properties in Hawai'i.

 

 

And the reason the rental market is so horible in Hawai'i and where are you for 1300 a month, is because of all these fake investors thinking that they big shots.

 

 

If thats the case I'm not going to give you any more business advice.

 

 

Don't accept CCs.  Thats your decsion.

 

 

Regular Contributor
aplast
Posts: 150
Registered: ‎06-20-2012
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Re: Paying Rent W/ CC (details inside)


Revelate wrote:

aplast wrote:

sure 3% is not uncommon, but for the amount of volume processed through these mega complexes - im sure they recieve some type of break from their merchant processing company or else they wouldnt accept credit cards. Owners/investors of these types of places are not dumb finacially or business minded alike. and lets think about this - Revelate, Since you brought up margins: wouldnt a company make more money with say a 90% occupancy rate rather than 99%? If a complex is 95% or higher occupied that tells me that the rent is too cheap. so the company raises the rent obviously loses some tenants when their leases are up, but at 90% occupied there is less overhead and will typically collect more in revenue every month. food for thought.

 


Most landlords and even rental companies are not the mega complexes; as stated in my post, the Archstones of the world are large enough that they almost assuredly get a much better merchant transaction rate than my landlady would (some individual 1500 miles away in Dallas).    You can compete on a number of different things as a landlord and I have zero practical experience with it, but in a competitive market and given that the vast majority of rents in a given area for similar apartments happen to be awfully close to each other unless you're able to charge a higher rent, then 90% occupancy never is as good as even 90.1%. 

 

Unless the demand is much higher than supply (say PF Changs several years back where you just needed to get cozy at the bar and they should've absolutely increased their prices by around $2 across the board on their entrees without loss of table usage), you can't really afford to arbitrarily raise prices in a competitive market.... and there are certainly some people that would move for the extra $40 bucks a month my landlady would have to charge to keep the same profit level, and to what end?  

 

Losing money on a rental property via accepting credit cards won't make sense until everyone pays that way and you can roll it into the rent straight out, which might well happen in our lifetimes, but it's not today.  Today it's just throwing away profit... going back to an earlier point that ccnew made, while I agree using checks is a relic of a bygone era for most things, I stiill write at least one a month, and generally maybe 1-2 others over the course of the year and have done that for the last two decades.... I don't see that changing anytime soon either.

 


I want to start my reply by saying that I respect your opinion and can see where you are coming from, and im enjoying the conversation we are having :smileyhappy:

in an earlier post that I had I said I can understand why an individual investor who has a couple duplexes or 5-10 rental properties wouldnt accept CC. It makes total sense. Infact, most people cut a check for rent. period. BUT at the same time I dont see a losing proposition when it comes to the large complexes accepting CC as payment.

 

I would say as a general rule (right now at least) the rental market is TIGHT. The demand far outweighs the supply and new complexes are popping up ALL the time. While rent may be similar within a certain mileage of a radius the competition then turns to amenities, features, convieniences. for example The way a property markets themselves may be through the half court indoor basketball court or the indoor movie theater or the dog park or the top of the line weight room or the putting green - how about the resort style pool and I could go on and on. when I leased my apt. they actually made a big deal about being able to pay online, and to be honest - this was the first time I had been able to do so. The restaurant industry is a completely different story, and almost too different to compare to each other, but I get where you are coming from. but lets think about this... lets say rent at property a is 975 and rent at property b is 1025. property b has nicer amenities - comparable clubhouse - but something like a putting green and outdoor cabana. Stuff that will draw people in, but they wont necessarily use. Happened to a buddy of mine with this game room (had billiards and shuffle board and flat screen tvs.) the dude lived there a year and never even used that room... LOL and the place was brand new. how much extra did those items really cost the apartment over a period of time. the 50 dollars a month in rent difference really covers any processing fees.. and I just find it interesting how people get sold on things they dont want/ will never use. I would bet property b has less of an occupancy rate, but higher revenue and less overhead. That was the point I was trying to make. another thing we havent factored in is a 3-5% increase in rent depending on what market youre in and how the rental market is in your area. and thats not an industry number - its just what I have noticed the last few years of renting here in my city.

 

if it was a losing proposition apartments wouldnt take CC as payment.

 

I also think that personal check writing is turning obsolete. I can pay ALMOST everything online, and if not online in person using a debit/CC. Now having said that I cut 100-150 checks a month between payroll and vendors. I also believe that some people grew up writing checks and will be dead set in their ways about it. carrying around a check book and will write checks for everything and not want to use a debit card. Its all personal preference really. and hey, as long as you arent standing in front of me at the grocery story whipping out a check book we will be alright!

 

Having said all of this.. Its my personal goal to be a homeowner in 5 years so I wont have to waste any more money renting/moving. but you are well spoken and have some very valid and true points.

American Express Green - NPSL, Sams Club Discover - 4000, Paypal Smart Connect - 4000, Capital One - 3500, Barclaycard Visa - 2500, Walmart - 1500, Discover IT - 1000, Ashley Furniture Home Store - 1000, Care Credit - 1000.
Established Contributor
ccnewcc
Posts: 560
Registered: ‎09-29-2012
0

Re: Paying Rent W/ CC (details inside)


aplast wrote:

Revelate wrote:

aplast wrote:

sure 3% is not uncommon, but for the amount of volume processed through these mega complexes - im sure they recieve some type of break from their merchant processing company or else they wouldnt accept credit cards. Owners/investors of these types of places are not dumb finacially or business minded alike. and lets think about this - Revelate, Since you brought up margins: wouldnt a company make more money with say a 90% occupancy rate rather than 99%? If a complex is 95% or higher occupied that tells me that the rent is too cheap. so the company raises the rent obviously loses some tenants when their leases are up, but at 90% occupied there is less overhead and will typically collect more in revenue every month. food for thought.

 


Most landlords and even rental companies are not the mega complexes; as stated in my post, the Archstones of the world are large enough that they almost assuredly get a much better merchant transaction rate than my landlady would (some individual 1500 miles away in Dallas).    You can compete on a number of different things as a landlord and I have zero practical experience with it, but in a competitive market and given that the vast majority of rents in a given area for similar apartments happen to be awfully close to each other unless you're able to charge a higher rent, then 90% occupancy never is as good as even 90.1%. 

 

Unless the demand is much higher than supply (say PF Changs several years back where you just needed to get cozy at the bar and they should've absolutely increased their prices by around $2 across the board on their entrees without loss of table usage), you can't really afford to arbitrarily raise prices in a competitive market.... and there are certainly some people that would move for the extra $40 bucks a month my landlady would have to charge to keep the same profit level, and to what end?  

 

Losing money on a rental property via accepting credit cards won't make sense until everyone pays that way and you can roll it into the rent straight out, which might well happen in our lifetimes, but it's not today.  Today it's just throwing away profit... going back to an earlier point that ccnew made, while I agree using checks is a relic of a bygone era for most things, I stiill write at least one a month, and generally maybe 1-2 others over the course of the year and have done that for the last two decades.... I don't see that changing anytime soon either.

 


I want to start my reply by saying that I respect your opinion and can see where you are coming from, and im enjoying the conversation we are having :smileyhappy:

in an earlier post that I had I said I can understand why an individual investor who has a couple duplexes or 5-10 rental properties wouldnt accept CC. It makes total sense. Infact, most people cut a check for rent. period. BUT at the same time I dont see a losing proposition when it comes to the large complexes accepting CC as payment.

 

I would say as a general rule (right now at least) the rental market is TIGHT. The demand far outweighs the supply and new complexes are popping up ALL the time. While rent may be similar within a certain mileage of a radius the competition then turns to amenities, features, convieniences. for example The way a property markets themselves may be through the half court indoor basketball court or the indoor movie theater or the dog park or the top of the line weight room or the putting green - how about the resort style pool and I could go on and on. when I leased my apt. they actually made a big deal about being able to pay online, and to be honest - this was the first time I had been able to do so. The restaurant industry is a completely different story, and almost too different to compare to each other, but I get where you are coming from. but lets think about this... lets say rent at property a is 975 and rent at property b is 1025. property b has nicer amenities - comparable clubhouse - but something like a putting green and outdoor cabana. Stuff that will draw people in, but they wont necessarily use. Happened to a buddy of mine with this game room (had billiards and shuffle board and flat screen tvs.) the dude lived there a year and never even used that room... LOL and the place was brand new. how much extra did those items really cost the apartment over a period of time. the 50 dollars a month in rent difference really covers any processing fees.. and I just find it interesting how people get sold on things they dont want/ will never use. I would bet property b has less of an occupancy rate, but higher revenue and less overhead. That was the point I was trying to make. another thing we havent factored in is a 3-5% increase in rent depending on what market youre in and how the rental market is in your area. and thats not an industry number - its just what I have noticed the last few years of renting here in my city.

 

if it was a losing proposition apartments wouldnt take CC as payment.

 

I also think that personal check writing is turning obsolete. I can pay ALMOST everything online, and if not online in person using a debit/CC. Now having said that I cut 100-150 checks a month between payroll and vendors. I also believe that some people grew up writing checks and will be dead set in their ways about it. carrying around a check book and will write checks for everything and not want to use a debit card. Its all personal preference really. and hey, as long as you arent standing in front of me at the grocery story whipping out a check book we will be alright!

 

Having said all of this.. Its my personal goal to be a homeowner in 5 years so I wont have to waste any more money renting/moving. but you are well spoken and have some very valid and true points.


Lol!  Old ladys at the grocery store with checkbook in hand holding up the line.  so true! lol


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