Tenant doesnt have bank account

Member since 2024 · 23 posts · 55 votes

My tenants don't have bank accounts and therefore have been paying their previous landlord through money orders and would drop it off at the PM office. I live out of state and am self managing...how do I collect their rent? I use Innago to track everything and woudl prefer that the rent be automatically deposited into my account every moneth.

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Eric Gerakos

Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes

10mo

Why did you rent to a tenant with no bank account?

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Charlotte GoodmanPro Member
Member since 2020 · 63 posts · 31 votes
10mo
Quote from @Megan Tyberg:

My tenants don't have bank accounts and therefore have been paying their previous landlord through money orders and would drop it off at the PM office. I live out of state and am self managing...how do I collect their rent? I use Innago to track everything and woudl prefer that the rent be automatically deposited into my account every moneth.

Can they use Venmo? They can use amscott? they can deposit to your account. I would suggest they use a friends bank account to make this happen. YOU do not want a fake money order . Ask me how I know. IF you do decide to continue using m.o. add a fee for the aggravation. western union can also give you the money but once again you have to go to a western union and get it. How about cash ap? add a fee, tell them your accountant is making you.
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Eric Gerakos
Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
10mo
Why did you rent to a tenant with no bank account?
5 Reply
Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
10mo
Quote from @Megan Tyberg:

My tenants don't have bank accounts and therefore have been paying their previous landlord through money orders and would drop it off at the PM office. I live out of state and am self managing...how do I collect their rent? I use Innago to track everything and woudl prefer that the rent be automatically deposited into my account every moneth.
Hey Lolo, this comes up more often than you’d think, especially with older tenants or folks who are just used to doing everything by money order. If they don’t have bank accounts, the simplest solution is usually having them mail the money order to you or to a P.O. box you set up, and then you just record the payment in Innago manually. Some landlords set up a local person like a handyman or cleaner to collect and deposit for them, but that only works if you really trust them. Long term though, you might consider investing in a market where systems are easier to set up for out-of-state owners — I moved from Portland to Columbus, Ohio in 2020 and now own 10+ rentals here, and the nice thing is tenants here generally do pay online, and the affordability means most deals still hit the 1% rule. Columbus has strong job and population growth with Intel, Amazon, Google, Honda, Meta, Microsoft, and more developing here, so cash flow and appreciation both look great. It makes long-distance systems way easier when the market supports it. Happy to connect and answer any questions you have!
[email protected]614-300-7535
Jimmy Lieu, Red 1 Realty4.9120 Reviews
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Adam BartomeoBusiness Member
Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
10mo
We have tenants mail us checks and money orders all of the time even though we are in the same city as them and they have bank accounts. You should make it as easy as possible for the tenant to pay the rent. If they pay by money order than accept money orders.
[email protected]239-339-3969
Bartomeo Property Management4.7150 Reviews
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Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
10mo
Quote from @Megan Tyberg:

My tenants don't have bank accounts and therefore have been paying their previous landlord through money orders and would drop it off at the PM office. I live out of state and am self managing...how do I collect their rent? I use Innago to track everything and woudl prefer that the rent be automatically deposited into my account every moneth.

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[email protected]614-541-8475 Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
Reafco512 Reviews
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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
10mo
Quote from @Megan Tyberg:

My tenants don't have bank accounts and therefore have been paying their previous landlord through money orders and would drop it off at the PM office. I live out of state and am self managing...how do I collect their rent? I use Innago to track everything and woudl prefer that the rent be automatically deposited into my account every moneth.

Typically when you run into a grown adult who doesn't have a bank account it means they have atrocious credit.
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
10mo
They don't need a bank account as long as you have one in their town. For our tenants that still want to pay by check or cash, which is not many these days, we have a business bank account that they can make the deposit directly into - all they need are the last 4 of the account number and the account name. They get a receipt and text or email a copy of the receipt to the office. Even if you are many states away, just about everywhere has a Bank of America, BBT, Citibank, First Horizon, Wells Fargo, etc.
We don't accept payments except through our online portal or directly into our business banking by check or cash. Written explicitly into the lease. No one should be mailing payments these days for rent when there are plenty of other more secure options that eliminate lies and excuses (the check is in the mail).
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Skyline Properties
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Tyler FoshePro Member
Rental Property Investor · Los Angeles Area · Member since 2021 · 60 posts · 23 votes
10mo
There are a few other options that you might want to consider. If you accept debit card payments then your tenant could buy a re-loadable prepaid debit card at a major retailer like Walmart. If they register with the card provider they can pay online with the card. If you accept payment apps like PayPal they could also link the card to a payment app. This type of transaction would be instant or the same day. Another option would be to use an electronic money order from one of the major providers like Western Union or MoneyGram. There would be a fee for this type of transaction but it would be the same day or the next day. The last option would be for them to use a cash payment network like PayNearMe. The tenant enrolls in the service and gets a code they use at a participating store like 7-Eleven or CVS. There is a fee but the money would be transferred within two business days.
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Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
10mo
Quote from @Megan Tyberg:

My tenants don't have bank accounts and therefore have been paying their previous landlord through money orders and would drop it off at the PM office. I live out of state and am self managing...how do I collect their rent? I use Innago to track everything and woudl prefer that the rent be automatically deposited into my account every moneth.

I would have put in the requirements that the tenant needs to have an account to ACH their money to landlords account. This is one thing that is easier for tacking each month, easier for you so you don't have to pickup a check or wait for it in the mail, and it saves you time for putting in the effort on doing more like going to get more deals.
Also, we always vet tenants with one requirement being they need to have 3x the rent in their bank account. This gives them the ability to pay prorated or first months rent and the security deposit with move in costs and not having issues.
The McKernan Group4.957 Reviews
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Alfath AhmedBusiness Member
Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
10mo
Quote from @Megan Tyberg:

My tenants don't have bank accounts and therefore have been paying their previous landlord through money orders and would drop it off at the PM office. I live out of state and am self managing...how do I collect their rent? I use Innago to track everything and woudl prefer that the rent be automatically deposited into my account every moneth.

Just have the deposit to your bank. I would honestly look at getting a PM. it is very much worth the cost.
[email protected]614-802-5698
ReafCo | Ahmed Group 536 Reviews
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Janice Carter
Real Estate Broker · Atlanta · Member since 2024 · 1k+ posts · 606 votes
10mo
While I would be hesitant to rent to a tenant without a bank account. If there is a legitimate reason, Innago offers Cash Pay which allows tenants without bank accounts to pay their rent in cash or money order at thousands of retail locations such as Walmart, Kroger, 7-Eleven, CVS, etc. The payment is then automatically deposited into your account. This is usually the simplest and most reliable option for tenants without bank access.

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Lokesh W.
Property Manager · Milwaukee, WI · Member since 2011 · 185 posts · 16 votes
10mo
If you living nearby the property, having a tenant without bank account can be problematic for obvious reasons; you cannot track them. It is easier if you spend some more time finding the right tenant. It is worth the time considering you live out of state.
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- Lokesh W.
  Property Manager · Milwaukee, WI · Member since 2011 · 185 posts · 16 votes
  10mo
  Quote from @Lokesh W.:
  
  If you living nearby the property, having a tenant without bank account can be problematic for obvious reasons; you cannot track them. It is easier if you spend some more time finding the right tenant. It is worth the time considering you live out of state.
  
  there is a typo in the first sentence. I meant - if you are NOT living nearby the property, then it can be problematic.
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