Investor · Provo, UT · Member since 2016 · 15 posts · 7 votes
Good afternoon! How many of you collect rents online and do tenants like it or seem bothered by having to set it up etc? I feel weird with tenants knowing our home address to mail checks. We are buying two new investments but our only investment right now is a SFH that prefers to do direct deposit. I would like to use Cozy or some other online place to collect rent. Thoughts? Thanks
@Rachel Shepherd Yes! I use cozy.co very actively and I love this program.
I evaluated 3 other online rent payment software before selecting cozy.co. Out of all my rental properties 60% of my tenants use cozy to pay. 10% pay with paypal. And 20% write post-dated checks and the 10%, I drive to collect rents, :( (They don't have checking accounts).
I write cozy.co payments into the lease. You're the landlord, so your tenants can abide by your rules.
One of my connections, @Jeff Gates says he has come across 49 other rent payment systems, so you may have other better insight beyond cozy.co
@Rachel Shepherd Yes! I use cozy.co very actively and I love this program.
I evaluated 3 other online rent payment software before selecting cozy.co. Out of all my rental properties 60% of my tenants use cozy to pay. 10% pay with paypal. And 20% write post-dated checks and the 10%, I drive to collect rents, :( (They don't have checking accounts).
I write cozy.co payments into the lease. You're the landlord, so your tenants can abide by your rules.
One of my connections, @Jeff Gates says he has come across 49 other rent payment systems, so you may have other better insight beyond cozy.co
I use cozy for all my rentals. At the time of signing the lease I just tell them that is how I collect rent. I do not give them the option. I haven't had a single problem. Its an easy conversation as it is simpler and free for both parties. One thing that probably helps the transition for my tenants is that the rental application is online. So that weeds out anyone that doesn't feel comfortable with online transactions.
Jordan thank you! I wanted to do applications online wtih cozy so that totally makes sense that if they are comfortable doing apps online they should be comfortable paying online. Is it deducted automatically or do they go on every month and pay?
Fair Housing Regs makes the point that we can not discriminate on the origin of funds and nether the means of payment. If the tenant offers checks, money orders, online payments we just take'm. Cash is always acceptable, but if like me you're not local to the unit(s), some form of indirect payment becomes necessary.
I have become a fan of online payments as the tenant can post rent payments in the middle of the night.
I use cozy and it has been working well for me I also have a P.O. Box for those who do prefer to pay with a check or money order that way you don't have to give out your home address and my credit union just recently told me they have a POP money feature where people can send money with just a text or an email so you may want to see if your bank offers anything like that as well.
One of the ways we have dealt with that in the past is to have the tenants make the deposit directly to the bank. We just provide them with the deposit slips and they can take it to the bank to deposit their rent with no muss and no fuss and still insulates our private residence from tenants. If they are not internet savvy and don't want to make their payments online, then just have them make a deposit to a local branch ( obviously this only works if you have a local branch near them). I hadn't though about it before , I suppose they could always send it to the bank in the form a letter too with a deposit slip. Someone should chime in if they have done this before - I haven't but it just occurred as a possibility to me as I was writing this....the tenants would not have a receipt for payment - however they may or may not care , as the bank would have it on record in case of any disputes.
Jordan thank you! I wanted to do applications online wtih cozy so that totally makes sense that if they are comfortable doing apps online they should be comfortable paying online. Is it deducted automatically or do they go on every month and pay?
It automatically pulls it out of their account each month. I haven't used Cozy's application feature yet though. So far I have used rocket lease for my applications. I'll try cozy eventually but just feel comfortable with rocket lease.
Good afternoon! How many of you collect rents online and do tenants like it or seem bothered by having to set it up etc? I feel weird with tenants knowing our home address to mail checks. We are buying two new investments but our only investment right now is a SFH that prefers to do direct deposit. I would like to use Cozy or some other online place to collect rent. Thoughts? Thanks
Cozy.co is great... and my tenants love it. They can't really be late and there is nothing to it. My tenants are, typically, class A tenants though... medical students, law students, etc. So maybe I am just spoiled by that.
One of the ways we have dealt with that in the past is to have the tenants make the deposit directly to the bank. We just provide them with the deposit slips and they can take it to the bank to deposit their rent with no muss and no fuss and still insulates our private residence from tenants. If they are not internet savvy and don't want to make their payments online, then just have them make a deposit to a local branch ( obviously this only works if you have a local branch near them). I hadn't though about it before , I suppose they could always send it to the bank in the form a letter too with a deposit slip. Someone should chime in if they have done this before - I haven't but it just occurred as a possibility to me as I was writing this....the tenants would not have a receipt for payment - however they may or may not care , as the bank would have it on record in case of any disputes.
We do the same. We created a "deposit only" account. The bank most likely has an overnight deposit box for tenants who work weird hours. We write their names on the deposit slips. We see online exactly when, how much and who made payments. My tenants love it and think I'm doing them a favor.
Good afternoon! How many of you collect rents online and do tenants like it or seem bothered by having to set it up etc? I feel weird with tenants knowing our home address to mail checks. We are buying two new investments but our only investment right now is a SFH that prefers to do direct deposit. I would like to use Cozy or some other online place to collect rent. Thoughts? Thanks
Hello Rachel,
We always offer online payments to tenants. As you would expect we get mixed results. Many of them are thrilled with the idea of paying online and voiding the hassles of making it to the office (or mailing it in.)
We also have some tenants who simply prefer dropping it off. Their reasons differ. Some say they like the idea of seeing their LLs, others say they don't like bill paying online.
At this point, we still prefer to have both as an option. If the tenant wants to pay online, that's great! If not, that's okay as well.
I am planning on using Cozy for my rent payments, applications, and leases. I don't expect to get 100% buy-in, so I am making it more attractive by increasing the monthly rent $10 for check or cash payments. Also, I believe that Cozy allows tenants to pay rent with a credit card. If your renters are savvy, they would pay with a credit card to get rewards points, and then pay off the credit card. Unless cozy charges for credit card transactions.
Brandon Turner mentioned PayNearMe that allows his tenants to pay cash for their rent at 7-11s. And he said lots of his tenants use that. Check that out as a cash alternative.
Does Cozy charge a fee for from the tenant for using their site? Here in the DC area most young people use venmo. They use it for many purposes like paying their friends for dinner, etc. All our tenants pay via this site. It's free for bank to bank & the transfer happens the next business day. The only drawback is that max. transfer per day is $3,000. Thus, say you total rent is than $3,000 per month & everyone pays on the 1st, you'll need to make a few transfers. Nevertheless, we love this site & it's working for us.
I work with many tenants, I was a leasing agent for several years full time. Most tenants prefer to pay online. In Chicago a lot of Landlords use Chase quickpay. There are other providers that provide tenant reporting to the credit bureaus and collect the rent for you, but I believe you need to have several properties to use their services. Most property management companies also have an online payment portal, but then you pay them a monthly fee- usually it is around 7%.
I've seen tenants willing to pay an extra fee to pay online, offsetting the credit card company fees. That was when I brokered at kevco.com. My current tenants prefer to pay in person, which I hear is a cultural thing in the hispanic community.
However, I recently came across a gentleman starting a new cloud service that is appealing: Turbo Tenant is free for the landlord to set up, and there are features for vetting applicants as well as receiving online payments (http://www.turbotenant.com/#free-landlord-software) This guy's claim is that most tenants would prefer to pay online. Maybe the younger crowd is more convenience oriented?
As @Dennis Batchelor mentioned some prefer to pay in person. (And the cultural aspect is a very interesting comment / insight).
Often times paying in person is not an option for landlords that either don't have office hours / physical location, or if the properties are not an easy driving distance.
At my prior mgmt. company many tenants - that literally lived in the same building as our office - opted for the online payments. It was just easier for them.
We slowly moved to 100% online payments, and I don't think I will ever go back . . .
Timely topic for me. I've been considering adding this new payment method for my tenants. I currently have three methods for payment:
- PO Box to mail check/money order (to keep my home address private)
- Cash, but only if paid in person (and I need 4 days notice to make arrangements to be there)
- Deposit at the Bank with provided deposit slips. Most of the tenants prefer this option as bank will provide them with a receipt to keep for their records.
@Rachel Shepherd A lot depends on your type of tenants. As John pointed out, most tenants from Class A properties actively ask for online payment options. We see this all the time. However, tenants at other properties may not have checking accounts or may only have pre-paid debit card accounts. Our experience shows that the fees for paying with a debit/credit card are often passed on to the tenant as they can be expensive due to being a % of rent and not flat fee.
We've also seen tenants that like the control of making the payments online themselves and not having to set up the auto withdrawals from their bank accounts. This is not possible with all online payment companies.
Benefits to accepting rent payments online include not having to track down the payments, knowing who has paid, having an online record of payments, auto adding late fees to tenants that do not pay on time, and major time savings for the landlord. Collecting rent online takes away one more thing to worry about each month.
We take online payments through a merchant account we have with our bank. We keep the tenants card on file and agree with the tenant on a day we will run the card for a given months rent (the 1st of the month, the tenants first payday of the month, etc).
We present this as the way we do business and have never gotten pushback. If we did and the tenant was solid we would allow them to mail a check and we have a PO Box for that. Why don't you just get a PO BOX to avoid giving out your home address?
Does Cozy charge a fee for from the tenant for using their site? Here in the DC area most young people use venmo. They use it for many purposes like paying their friends for dinner, etc. All our tenants pay via this site. It's free for bank to bank & the transfer happens the next business day. The only drawback is that max. transfer per day is $3,000. Thus, say you total rent is than $3,000 per month & everyone pays on the 1st, you'll need to make a few transfers. Nevertheless, we love this site & it's working for us.
Cozy is free to use, but it is much slower. It takes 5 business days for the money to reach your account. On the other hand, it goes directly into your back account, so you don't have a $3000 day limit on transfer of funds. Also, Cozy will only accept the exact amount of the lease, the tenants cannot send less.