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BlogArrowLandlording & Rental PropertiesArrow7 Undeniable Reasons Online Rent Collection Beats Paper Checks
Landlording & Rental Properties Jul 22, 2020

7 Undeniable Reasons Online Rent Collection Beats Paper Checks

Remen Okoruwa
Expertise: Landlording & Rental Properties
25 Articles Written
Small group of envelopes marked "PAST DUE" and "FORECLOSED". Suggesting tough economic times US.

Landlords rely on their tenants paying rent on time to run a successful business. Paper checks are the traditional way by which landlords collect rent. But there are many reasons for landlords to switch to online rent collection.

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Unfortunately, many tenants view landlords as money-grabbing people who are only concerned about collecting their checks. The reality is that landlords’ primary source of income is money from their rental properties—so they are rightly concerned about tenants paying rent on time.

The lease agreement that tenants sign clearly outlines the date for rent payments and the method of payment. Successful landlords also carry out a thorough screening process to ensure tenants can afford to pay rent and have a good credit history. Because rental income is crucial to running a successful business, property managers should ensure they have a robust and secure method of collecting rent.

Modern technology allows for a significant number of rental payment options. According to a report by the Federal Reserve Bank of Boston, 42% of people still prefer to pay rent by check. The survey showed that in 2014, only 7% used an online banking payment.

On the other hand, many companies emphasize the need for switching to online rent collection methods. Online rent collection helps landlords run a successful property management business, ensure healthy cash flow, and receive rent payments made on time.

Thankfully, in less than a decade, technology has advanced so much that online rent collection is slowly becoming more appealing for the landlord and the tenant.

Why Are Checks Such a Bad Thing?

There are two principal reasons why checks are a nightmare payment method for both parties. On the one hand—and often unintentional—checks are easy to forget. With so much going on in most people’s lives, rent day slips past like any other day.

Also, bills come on various days of the month. Of course, it would be easier if everything was due at the same time. A tenant could sit down and quickly write checks for all the bills. But if it’s one here and another there, it is easy to get caught up in the stresses of life. And, it can be easy to forget to send the check.

Related: The Landlord’s Ultimate Guide to Collecting Rent

Then there are the intentional problems with checks—checks bouncing and check fraud. If convenience isn’t enough to motivate you to change your payment method, you only need to look at some of the shocking fraud statistics concerning checks.

News reports say that, in 2016, attempted check fraud cost $8.5 billion. This figure rose to $15.1 billion in 2018. Of that, successful check fraud totaled $1.3 billion. A check doesn’t contain the same sophisticated encryption that we experience with online banking and payments. Therefore, it is much easier to commit fraud.

So, between late payment fees, fraud, and checks bouncing, it’s a small miracle that checks are still so popular. Perhaps it is our fear of change that prevents us from taking advantage of the new digital age.

Why Is Online Rent Collection Better Than Checks?

Let’s take a look at seven ways collecting rent through online payment systems makes the lives of tenants and landlords easier.

1. Online rent collection is simple

Be honest—do you have time to wait for rent checks in the post and take them to the bank to deposit? Oh, and you can’t forget to record them in your accounts manually. Probably not.

Even tenants are starting to prefer the hassle-free method of paying online. It’s not just young renters, either. Studies show that in 2017, 42% of the older generation were already paying their bills online.

Tenants are more open to the idea of scheduled payments when setting up online rent collection, too. These are great, as automatic payments eliminate the need to remember paying rent.

2. Chances of on-time payments increase

Many online rent collection tools have options to send out reminders to tenants. A quick SMS message or email is often more than enough to jog the tenant’s memories. In fact, your tenants will thank you for it, as they won’t incur late payment fees.

girl hold in hands yellow empty screen mobile phone close up, person type message on smartphone in sun cafe, relax tourist travels planning trip, hipster enjoy journey in cityscape, lifestyle holiday concept, internet online

3. Multiple payment methods are available

Once you start using online payment tools, you no longer have to hand your financial details out as you would for a check. Your payments are completely secure via the ACH network, websites, mobile apps, and pay-by-phone services.

Related: Rent Payment Plans Can Benefit Both Tenant & Landlord: Here’s Why

Tenants can choose the most convenient for them. These payment methods can include:

  • eCheck (the same concept as paper but with fewer steps)
  • Debit/credit card
  • PayPal
  • SMS/text message
  • Cash at some local grocery stores (also known as WIPS or walk-in payment system)

Some of the payment options may have small fees, and some apps are free to use. But none as costly as a check. These old-fashioned pieces of paper cost an average of $8-$10 to process each one.

4. Financial updates are sent in real-time

One of the most time-consuming and frustrating parts of running a business is the accounts. Payments can take a few days to process. So, what you have on paper doesn’t necessarily match your statements. This process requires repeated checking to see your financial status.

With online payment platforms, you will receive real-time notifications of transactions. You have a clear overview of your tenant’s payments and your financial situation. On top of that, many rent collection apps connect rent payments to your accounting software. Time-saving and simple!

5. Payments are processed faster

Waiting for a check in the mail takes an average of three days. Once you receive it, you have to find time to go to the bank. You will then have to wait two to five business days for the check to process and the funds to arrive in your bank account.

Online payments take place much faster—sometimes instantly. It is unlikely that you will have to wait more than three days for payments to clear. Even if you have to wait for the funds to clear, you receive a notification as soon as the transaction takes place.

closeup of key in lock on door

6. Online payment offers enhanced security

Checks contain the tenant’s bank account information. The potential for fraud is incredibly high. Plus, checks can get lost in the mail and/or end up in the wrong hands. Not only can this cause a considerable headache, but also tenants may not have additional funds to pay their rent.

Online rent collection means that financial details are not shared, and this provides more security for the landlord and the tenant.

7. Online systems contain additional property management features

Rent payment platforms often include several other features to streamline managing rental properties. For example, web portals or applications may also offer one-time payments, scheduled payments, and late fee and security deposit collection. They can provide various solutions for your property management.

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What digital tools have benefited you most in your real estate business?

Join the discussion below in the comment section.

By Remen Okoruwa
Remen Okoruwa is the co-founder of RentDrop, a free software tool that helps landlords and property managers collect rent and maintain their units. Remen has ...
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Remen Okoruwa is the co-founder of RentDrop, a free software tool that helps landlords and property managers collect rent and maintain their units. Remen has a background in the software industry and business strategy, working as product manager at HubSpot and previously serving as a management consultant with McKinsey & Company.
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77 Replies
    Michal Kasza New to Real Estate from Massachusetts
    Replied 6 months ago
    Love this! Will definitely want all my tenants to switch or choose the online payment method.
    Remen Okoruwa
    Replied 6 months ago
    Awesome! It will definitely save you a ton of headache. My company is working on a solution to allow landlords to collect rent for free. It's set to be released soon - if you want to check it out when it launches you sign up here: https://lp.rentdrop.io/waitlist

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    Ricardo A Perez from Hollywood Florida
    Replied 6 months ago
    @ Remen Okoruwa thank you so much for this article as a new investor it is providing me the tools to succeed.
    Remen Okoruwa
    Replied 6 months ago
    Happy to help Ricardo! Thanks for the kind note.

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    Richard Marques Investor from Houston, Texas
    Replied 6 months ago
    Nice article Remen. You should probably include some cultural hurdles to keep in mind as well. I have some hispanic renters that moved AWAY from paying electronically TO sending me a cashiers check. I believe they are more likely "cash" people as well as prefer to keep their privacy. I'm waiting for the day I get my check late or worse, its lost. Either way means an uncomfortable talk and move away from checks. Possibly loss of money for them as well. I like online payments for sure. Much more secure for both parties...
    Remen Okoruwa
    Replied 6 months ago
    Wow! That's an angle I hadn't really considered. How did you talk about preferred payment methods with those renters?

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    Nicholas Theodoseau
    Replied 6 months ago
    I think the key is to make it make financial sense for the tenant. Speaking as a former tenant, the management company offered online payments, which sounded great, but there was a ridiculous $8-$10 fee, so needless to say I continued to pay by check, but if it was free for me, I would have gladly paid online.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for the comment, Nicholas. $8-$10 sounds crazy high. Hard to believe they offered no free way to pay online!

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    Kevin McLaughlin from Houston, Texas
    Replied 6 months ago
    And that is exactly I pay my HOA with a paper check why my son pays his rent with a paper check - the $10 fee. I get that there is a cost to using a service but to me, that would be worth it as a landlord to avoid the hassle of handling the checks.

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    Andrew Muff Rental Property Investor from Oakland, CA
    Replied 6 months ago
    It would be great to provide contrast and also list the reasons why checks are still used. I rent in a highly rent controlled environment called Oakland CA. I've had more than my fair share of deadbeat tenants. But much worse are the "professional tenants" who know the law is heavily weighted against the landlord and they know their rights. So here are a couple of ways that my landlord attorneys have warned me against electronic payments -- 1) Denying partial payments. If a tenant gives you a check for less than the full rent, you can simply hand it back to them and state you don't accept partial payments. If your tenant sends you a PayPal, Venmo, or SMS or virtually any other electronic payment, a tenant lawyer will argue you accept the partial payment, which in certain instances will make it impossible for you to evict a tenant on the grounds of non-payment of rent. Similarly, if you terminate a tenancy for any reason (but in my experience it was to facilitate repairs on a unit), you give a tenant 60 days notice to move. However, if you accept any payment (partial or full) after the 60 day notice period, you negate the entire process and have to start over from scratch. Again, most electronic payments are focused on ease of payment, and not specific to the nuances of being a landlord in the eyes of the law. That's not to say there are none. Cozy.co, Yardi, AppFolio, etc. are all platforms for landlords. I'm not an expert in all of them, but some of them do allow you to force tenants into an all or nothing payment and you can stop accepting payments as well. So make sure your electronic payment system gives you complete control over the when, how, and how much your tenants can pay you. Your worst mistake is to think that you screen your tenants so well or you aren't in a rent controlled area so that these sort of legal nightmares will never happen to you. In real estate and property management its not a matter of if, but rather when it will happen to you.
    Ben F. from Oakland, CA
    Replied 6 months ago
    Absolutely true in the bay area especially. Also, if your tenant "moves out" and lets a friend live in the rent controlled unit, it's easy for the original tenant to continue paying electronically on behalf of their friend and pretend to still live there. Mailing a check makes it a bit harder to get away with.

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    Dennis Adler Rental Property Investor from Augusta, GA
    Replied 6 months ago
    Thanks for the comments on partial payments. I've got to consider that issue.

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    Remen Okoruwa
    Replied 6 months ago
    Wow the partial payments issue is a concerning one. Thanks for sharing the perspective, Andrew

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    Jim Spatzenfeld Investor from Buffalo NY & Sacramento CA
    Replied 5 months ago
    I don’t see the problem. If you receive a partial payment you can immediately issue a refund and send it right back to the tenant, just how you send back a check.
    Deanna Opgenort Rental Property Investor from San Diego, CA
    Replied 3 months ago
    Nope. NOT the same --You "accepted" the payment, whether or not you refunded it later. The LEGAL ramifications of "accepting" rent are really important in Real Estate. It's not always logical .

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    Jessica S. Real Estate Agent from Portland, Oregon
    Replied 6 months ago
    Heads up that in California it is illegal to require a tenant to pay electronically. The legislative code states "a landlord or a landlord’s agent shall allow a tenant to pay rent and deposit of security by at least one form of payment that is neither cash nor electronic funds transfer."
    Travis Rogers Rental Property Investor from Eugene, OR
    Replied 6 months ago
    @Jessica S. - I hope Oregon doesn't follow suit on that. Have you heard anything for Oregon? My next tenants will have to pay electronically. I'm shifting all of my homes out of Oregon due to the heavily favored tenant laws here, but I still have one in Oregon at the moment so I'm curious. Iv'e started buying out of state though, Oregon no longer makes sense for me and I'll move out of state as soon as my son graduates. Thank you for the info!
    Deanna Opgenort Rental Property Investor from San Diego, CA
    Replied 3 months ago
    Is it legal to offer a discount for paying electronically? If you advertise the rent at the higher number, the offer a $5 -10 discount for electronic payment that shouldn't run afoul of any laws.

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    Remen Okoruwa
    Replied 6 months ago
    Thanks for flagging that, Jessica! Really important to keep in mind state laws.

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    Wenda Kennedy JD from Nikiski, Alaska
    Replied 6 months ago
    I accept checks, cash, money orders, debit cards or I can auto draw their rent payments. If they mail it, I honor the postmark date. I even have a drop safe complete with envelopes at our Laundromat here on the property. It really doesn't matter to me how they pay -- but, I guess I'm old fashion. Yes, there are times that their checks bounce. Yes, there are times that the auto draw draft is refused. Yes, there are times when the debit card is declined. All my rents are due on the first of the month and late after the 5th. So, I am front and center during that time of the month. Most of the time, my collection goes smoothly. Everybody around here knows that I'm nuts about getting my rents. I have the only group of affordable housing in my community, so most of my tenants are really glad to have an affordable place to live.
    Remen Okoruwa
    Replied 6 months ago
    Wow! You provide your tenants a lot of flexibility. How do you approach collections with late payments?

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    Michael Casile
    Replied 6 months ago
    Great article. I definitely encourage online payment ... but I do have some customers not comfortable with finances and the internet coming together. I also have some who just are not tech savvy enough to browse the internet. So while the majority are indeed paying online, I still have some who are not comfy with it ... and they are good tenants, so I don't push it.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for the comment, Michael! You make a great point about supporting tenants who aren't as tech savvy. Do they pay via check? Or some other method?

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    Steve Babiak Real Estate Investor from Audubon, Pennsylvania
    Replied 6 months ago
    So this article’s author is with RentDrop, so I decided to check out their website. The first couple of things I tried to do there besides read a web page were problematic. There is a “kit” that is supposed to be available for download. Oops - the download link seems to point to some non-existent content (at least at the time of this writing). But the next thing is worse. Try signing up for a RentDrop account there - but be careful, because you will be asked to supply a password to be used on a firm that is not secure (that’s right - no https being used). Should I trust that they can securely handle my bank account if they can’t manage more basic security practices properly? Rhetorical question there ... no need to answer ...
    Remen Okoruwa
    Replied 6 months ago
    Hey Steve! Looks like you caught an issue with our website - thanks for your help there. The links to kits have been fixed :) And our app hasn't launched yet, so we are linking to a waitlist signup form.

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    Deanna Opgenort Rental Property Investor from San Diego, CA
    Replied 3 months ago
    Oh dear. Entrepreneurship is a tough business, and I get that everyone wants to be the next .com billionaire, but the amount of money being handled in rents is too much to be handled carelessly by amateurs. Whoever is doing your website and code writing should know MORE about web security that the landlords signed on to BP. You only get one chance at a first impression -- advertising before you have a working product...meh.

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    Neil Aggarwal Lender from Richardson, TX
    Replied 6 months ago
    I accept checks on one condition: They deposit the check directly at a branch of my bank. I will not let them mail a check. That is way too easy to abuse.
    Dennis Adler Rental Property Investor from Augusta, GA
    Replied 6 months ago
    Brilliant!

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    Remen Okoruwa
    Replied 6 months ago
    Wow that's clever, Neil. How many of your tenants pay by check?

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    Darrell Hay
    Replied 6 months ago
    Take checks to the bank? LOL Who does that? I deposit them all from my phone. Many tech savvy tenants and even some that work in IT don't feel comfortable with venmo or cash app (which I find odd). I have several tenants without bank accounts and they mail money orders. Further still I have tenants without internet access. I prefer electronic checks, but is it possible they will charge for this in the future---after we all get hooked? Bottom line it doesn't matter how they pay as long as they pay
    Remen Okoruwa
    Replied 6 months ago
    Makes a ton of sense, Darrell! Thanks for the comment.

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    Matt Anderson Real Estate Broker from Minneapolis, MN
    Replied 6 months ago
    What is everyone's favorite electronic payment method?
    Dave Rav from Summerville, SC
    Replied 6 months ago
    I use Schedule My Rent. Definitely not perfect, but allows for about 95% of the things I need/use. Including allowing for tenants who pay me directly (don't use SMR), per-diem late fee applications, and possibility of paying rent via money order (yes, that's correct!)

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    Tzvi Muser Property Manager from Middletown, New York
    Replied 6 months ago
    I use Cozy.co, there is no charge if the tenant pays by ACH. It does take a few days for the money to show up in my account, but once it clears their account, I know for sure that I'm getting it.

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    Evan T. Storck from Louisville, KY
    Replied 6 months ago
    TurboTenant

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    Nic Werner New to Real Estate from Seattle, WA
    Replied 6 months ago
    Two things here: 1) The author has a company that collects rental payments, so you see the bias here. Let's think about the other side, as both tenants and landlords clearly understand digital payments, so why the friction then? 2) The reason that many landlords have not switched over is because these companies take a cut of rent, or a high fee for each payment! If you're already tight, these fees add up, especially over multiple units. Restaurants/merchants pay this fee, but did it begrudgingly in the primarily cash days because it hurts their margins, and now there has been a tipping point, they've increased their prices to reflect the payment fee. So, if you feel it is worth a ~1-3% margin reduction for reducing payment friction OR you can increase your rent 1-3% to accommodate, then you should go ahead. For these companies, their business model is predicated on these monthly payments, as they won't be profitable (or have predictable revenue) from one-off services.
    Remen Okoruwa
    Replied 6 months ago
    Hi Nic, Thanks for taking time to write the comment. You're 100% right - my company is building a tool to help landlord collect rent online. With that said, we also see the big problem with credit card processing fees, which eat into the margin for landlords. However ACH payments (i.e., direct deposits) can be done at a low cost or even free through a number of service providers. We think that fee-less digital payments for rent are the right way forward, and we are committed to creating a product that makes this a reality.

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    Rick Klopp from North GA
    Replied 6 months ago
    Great article. Switching over to Zelle and not looking back.
    Jocelyn Canfield
    Replied 6 months ago
    I hate that zelle won't let me deposit to a business account, only my personal account

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    Remen Okoruwa
    Replied 6 months ago
    Nice! What were you doing before Zelle?

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    Steve Wilcox
    Replied 6 months ago
    Weak PR article masquerading as real content (take it from someone who used to be a journalist before going into marketing). Also, "undeniable reasons"? I can deny at least one: "Payments are processed faster." I have a few residents on Cozy and a few on ACH withdrawals, and all of them incur a delay of several days. Also also, our community is 55+. The younger residents are OK with automatic payments, but the 80-to-90-year-old residents have no tech skills or trust. They need to hand a check to the on-site manager. Those I deposit by phone and they're generally available the next day.

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    Sara Rush
    Replied 6 months ago
    I prefer to pay my rent with cash. One of the places I used to rent from decided to stop taking cash and only accepted checks. I don’t use checks for anything and wasn’t going to pay $25+ for checks just to pay my rent. So I asked the bank to give me a few checks that they can print off and that gave me enough to pay a few months while I looked for a new place to live.

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    Dave Rav from Summerville, SC
    Replied 6 months ago
    Yes, online rent payments are definitely a good thing. Payments don't have a chance to be "lost in the mail". Mail processing alone has cost me some hassle through the years. However, in probably 75% of cases, I charged my tenants late fees for "mail delays". It states right in the lease, we are not responsible for delays by USPS. The answer is simply mail it 2 days sooner (or risk costing yourself $50, Mr tenant)
    Andrea Cervini
    Replied 6 months ago
    Wow, an extra $50.00 bucks for 2 days late? Apparently you don't rent to disabled people who get their checks on the 3ed of the month. Furthermore, with all the hacking going on do you really think people are just going to hand over their banking information? Fortunately for me, I live in a state with reasonable tenant/ landlord rights. I get an official check from my bank and hand it to my landlord personally, after I've made a copy of it of course. That way theres no funny business with my payment.

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    Remen Okoruwa
    Replied 6 months ago
    Thanks for the comment, Dave!

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    Jason Minnich Investor from Milpitas, CA
    Replied 6 months ago
    I used cozy for one of my properties and that worked well but I've had one set of tenants that have sent me postal money orders on time like clockwork (often early) for 9 years now. One time in the 9 years they had their car break down and were late by less than a month, we worked it out with a late fee but that was well more than 5 years ago now. I have offered multiple forms of online payments but they trust the government and the property is in California so they have the option. I can deposit these money orders on my phone and everything works fine.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for the comment, Jason. Looks like you have an effective system in place :)

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    Craig Montesano Investor from Northwest, PA
    Replied 6 months ago
    I’m of the mindset - “if it ain’t broke don’t fix it”. We have a drop box and some others pay by mail. Why rock the boat in these uncertain times? Plus this guy owns an online rent payment co?? Lol

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    Jerome Kaidor Investor from Hayward, California
    Replied 6 months ago
    Add my voice to the eviction problem. I file an eviction on a deadbeat tenant, he electronically sends me ten bucks, and - goodbye eviction! No thanks. Also, paying a percentage fee would be a no-no for me. Landlording is a low margin business.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for the comment, Jerome. What you said about partial payments makes a ton of sense.

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    Karen A. Rental Property Investor from Bradenton, FL
    Replied 6 months ago
    I used to take electronic payments, but no longer. 1. There's a fee. Tenants don't want to pay it and neither do I. 2. Everything that @Andrew Muff said in his comment. He's spot on in his assessment of the legal world. 3. I (almost) got burned in the eRentpayment fiasco a few years ago. To make a long story short, the online payment company used a third party to process rent payments. That company went bankrupt. All the rents that tenants submitted during a certain time frame never made it to the landlords. I was fortunate to have a cooperative tenant that reversed the transaction at his bank and got his money back before it was gone for good. After that happened, I no longer trust any payment service.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for the thoughtful response, Karen. Your experience with eRentpayment sounds awful, and I can understand why that would turn you off to payment services. How do you collect payments today?

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    John Teachout Rental Property Investor from Concord, GA
    Replied 6 months ago
    We have our tenants pay rent by depositing into our bank account. They can use any funds such as cash, money order, check and don't need an account at the bank. We provide deposit slips. Sometimes someone will send money via Venmo but everyone else makes deposits. That way we can immediately see if it shows up. (they usually send us a text when they make the deposit) There's no fees for them or us. And no controversy when the deposit was made. The bank has virtual tellers that are open 7am to 11pm 7 days per week. No excuses are valid.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for sharing, John. Sounds like you have a system that works really well for you! Do you have issues with a dual Venmo / direct deposit approach?

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    Brian Garlington Realtor from Oakland CA &, Cleveland OH
    Replied 6 months ago
    Great article and I completely concur! One of my tenants literally lives right next door to me and I made it a condition before he moved in, if he doesn't pay rent electronically, then.......
    Remen Okoruwa
    Replied 6 months ago
    Thanks for commenting, Brian!

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    Terrance Schemansky Investor from Fenton, Michigan
    Replied 6 months ago
    Another issue (not sure if this was mentioned) but checks or money orders can get lost in the mail.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for the comment, Terrance. In your experience, do you think checks and money orders getting "lost in the mail" were just not sent in the first place?

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    Vaughn K. from Coeur d'Alene, ID
    Replied 6 months ago
    Half of those reasons aren't even really universal, they can be or not depending. My bank clears deposited checks instantly... As do most other peoples. It could still bounce a day or 2 later, but it's available to me 1 second after it hits the account. Similar gripes for the other points. Electronic stuff isn't bad in theory, but there's no reason to be anti check either. Just offering whatever the tenant prefers, and nudging them towards what you prefer, is fine.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for the comment, Vaughn! I definitely have a strong "digital payment" bias but I didn't really explore the positive aspects of checks. It's awesome that your bank clears checks immediately.

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    Michelle S. Investor from Eau Claire, Wisconsin
    Replied 6 months ago
    We have always had our tenants pay directly into an account at the bank. It has never been an issue.
    Remen Okoruwa
    Replied 6 months ago
    Awesome! Thanks for sharing your approach, Michelle.

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    John Manner
    Replied 6 months ago
    This is nice, but some of our tenants never open a computer. They are obviously older and send a check every month. I would never force them to try to do it online.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for sharing, John. You raise a really good point - forcing tenants to pay in a manner they aren't comfortable with can actually make it harder to collect payments.

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    Adam Deichert Rental Property Investor from Bismarck/Mandan, ND
    Replied 6 months ago
    My roommates both prefer to Venmo me directly, but the remainder of my Tenants all send their rent in via ACH
    Remen Okoruwa
    Replied 6 months ago
    Thanks for sharing, Adam!

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    Mike Kinney Investor
    Replied 6 months ago
    We are in SC. We use Appfolio for electronic payments. We do allow for partial payments, but this is part of a payment plan, which we keep track. One thing to note, we don't allow ACH payments if we have started the eviction process for a tenant. The tenant will have to pay through Snappy Checkout or at ACE express payment centers like many convenience stores have. The reason is ACH payments can still bounce, so if the tenant is in the eviction process and an ACH payment bounces, it could cause us some issues thinking the tenant is catching up but the payment bounces. So that's why we don't allow ACH payments during the eviction process.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for sharing, Mike! You make a really good point about ACH payment bounces and eviction process.

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    John Murray from Portland, Oregon
    Replied 6 months ago
    Snail mail and in person collection works for me. If the tenant does not have the money in the account no matter how high tech you collect the bounce still happens. I have never evicted any tenant for being late, if a landlord is concerned about a $25 late fee that person is in the wrong business.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for sharing, John! You're 100% right about the money - either the tenant has it or they don't.

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    Michael Haynes Investor from Tampa, Florida
    Replied 6 months ago
    Just one add on...I had rentals in S. Tampa for 30 years. 2/1 Duplex apartments and 3/1 houses in the best area in town. I never got more than $1000 a month in rent. I can't remembrer any of my tenants that actually had a bank account. I either got them to call me when they had the Cash or a Money Order from Amscot, which is free, or they dropped off the rent. I always tried to pro-rate the first months rent so they would pay the second month on the 1st of each month. My mortgages were scheduled for the 15th so that all the Rents had been paid or cleared to fund the bills. The one thing that would have saved me would have been a First, Last and Deposit up front. The problem is that in Tampa I don't know anyone with $3000 to move in with a First, Last and Deposit. So, I would make sure they had a JOB and accept First and Last. That gives the Tenant the ability to give you an excuse and go late on Rent when they intend to move in the Second Month. So, then, it moves to "No More Mr. Nice Guy" and the MINUTE they are giving excuses I put up the Three Day Notice and take a picture of it for the Judge. We used to be able to file Eviction and get them Personally Served and out in 9 working days. The Sheriff used to Post the Service in a week and maybe another week to Evict and put their stuff out on the street. But, now, you are lucky to get the Sheriff to post the Notice to Evict in a month and weeks to Evict. Then, we got Liberal, Bleeding Heart Judges who would send the Eviction to Mediation for any reason. The Mediator may give the Deadbeat Tenant up to 90 days to move out with all their excuses. You lose a minimum of 3 Months Rent. My point is that if you are a Hands On Landord, there are many ways to collect the Rent, but, nowadays you have to be Jack be Quick when they don't pay and give any excuse.
    Remen Okoruwa
    Replied 6 months ago
    Michael, thanks so much for your thoughtful comment! Looks like you had a pretty strict process, but it sounds like it was effective!

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    Kurt Michaelson from Yukon, OK
    Replied 6 months ago
    This is a great post and the reasons for utilizing an online payment platform for collecting rent is definitely more convenient , secure and much faster than waiting on a check. I'm still surprised that checks are still even used.
    Remen Okoruwa
    Replied 6 months ago
    Thanks for the comment, Kurt!

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    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied 6 months ago
    Amen! Digital beats paper payments by a long shot.

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    Joseph Moore Jr Rental Property Investor from Gilberton, PA
    Replied 6 months ago
    All my homes are in a low income area and a good percentage of folks do not have bank accounts, I will accept cash but I need to make sure I write a receipt. I guess I could take a pic of the cash with the receipt for my records also. My one tennant pays by personal check and texts me the day she puts it in the mail box. Never any issues so far. I am upfront if you pay by check and it bounces it will incur a late fee and return check fee. I am all for online payment services if they do not over charge you. I have used paypal for payments but with a buisiness account the fees there are still kind of high, Then I have to tranfer the money to my account from PayPal. In all reality I wish I could find a Property Manger since my whole goal was to be hands off on that end. I only enjoy buying and getting them ready. The rest is to much of headache for me.

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    Deanna Opgenort Rental Property Investor from San Diego, CA
    Replied 3 months ago
    My tenants all deposit directly to my bank. No issues, but being a small town bank I did initially have to instruct one of the younger tellers to give the tenant a deposit receipt only, not a balance statement for the account LOL. That tiny gold-rush era bank has now been absorbed by a slightly larger bank - probably better online security & more rules, but I'm still kinda bummed. At least it merged with another small bank, rather than one of the mega-banks. It's still the same staff, so they know who my tenants are, who I am, that my Mom is allowed to handle stuff on my account. They may still have a print-out of who's birthday it is as well, so they can greet them when they walk in (very "Mayberry", and very cool).

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