Having tenants pay using internet?

33 Replies

Hi everyone!

I am debating weather or not having making a tenant pay rent on a smart phone/ or computer that would require internet is ethical. 

I would think the vast majority of renters now use internet on the daily and will find this a helpful method. 

But, what happens when someone does not use the internet? 

Or does not even want to get it, do you then pay for it? 

Thanks everyone for reading!

Best, Bill :)

I am curious about this too.

If you require a tenant to pay with an online service. Should you, out of courtesy, provide internet for them to then utilize that service?

It seems like many landlords are still going the old route with checks in the mail. 

What are you asking exactly? Are you saying that you want to require that your tenants pay for internet or that you want to require your tenants to pay you via the internet?

I suspect you are saying that you want all of your tenants to make their payments online.

No I would not require this. I offer this as one of the many options for my tenants. You need to be open to all forms of payments. Some tenants are old school and will want to hand you a check in person and get a receipt, some will mail a check, some pay through my website, some pay via paypal.  Be open to all forms of payment. If you restrict it to one you may find that its too much work for even the best of tenant and you will start getting your rents late, or not at all.

Online payments are an amazing advancement in the apartment industry, no doubt.  In fact, it's so convenient that I as a management company pay the .50 transaction fee.  It automatically synchs with my online accounting, it time stamps, and tags the late fee the second it becomes past due.  That being said, In CA we can mutually agree to allow online payments, but I believe we are also required to provide the alternative payment such as a check.  But laws aside, why not allow a tenant to mail a check or money order to a PO Box?  I know I have many low income and elderly tenants that would be at a complete loss of online was the only payment option.  I will say that I'm continually surprised at how many people are paying rent and logging into their account on their smart phones.

I have all my tenants direct deposit their rent into my account. I manage 11 homes and not really had an issue with this. Make it easy for everyone!

Another option that would give you the convenience of not having to collect and deposit rent without requiring tenants to have access to the Internet would be PayNearMe. I offer this option as an alternative to my tenants who don't want to make online ACH payment for there rent (via Dwolla). Check it out if you're not familiar with it. I think it would be a good solution to address your dilemma.

Originally posted by @Elizabeth Colegrove:

I have all my tenants direct deposit their rent into my account. I manage 11 homes and not really had an issue with this. Make it easy for everyone!

 I use to collect rent this way but I got tired of trying to figure out who had paid and who was late and who only made a partial payment, etc. I switched over to Dwolla and PayNearMe and have been happy I made the transition. Much easier for me to keep track of.

Also, one thing to watch out for would be a "professional" tenant working the eviction rules against you. Most jurisdictions say that you cannot collect any partial payment during the eviction process so if tenants are able to make deposits directly into your account, they could work the system and make a small payment to reset the eviction process and send you back to square one. I'm not saying this is likely to happen but just something to consider.

Originally posted by @Elizabeth Colegrove:

@Jeremy Zindel 

Each tenant has their own account. This make this easier :) So they only pay in their account!

Nice! That definitely solves the problem of keeping track of deposits. :)

It would also be easy to simply close a single account if a tenant started playing games.

@Elizabeth Colegrove

I use the same method. With out of town rentals it makes it easy for them to pay the rent and I always know when they are late.  I use Wells Fargo as they have locations just about everywhere.  Do you use a national bank or set up new accounts with a local bank? 

Just FYI - I strongly suggest you do NOT pay for your tenants internet!  Liability reasons, for example if they download an illegal movie or "questionable content" YOU could be on the hook for it!  After all, your name is on the bill!

Most of the population have some type of smartphone or laptop.  WIFI usually FREE at local restaurants and business and there is the local Library if they don't have a computer.

I use an online rent collection site called rentpost. In my opinion, this site is awesome! It uses a banking method of automated clearing house (ACH). The tenant uses their checking account and routing number through the tenant portal. It is similar to what is used to make a mortgage payment through a bank web site. They can pay using their checking account through smart phone, ipad, computer, etc. You can apply a late fee schedule and if they are late the site automatically applies a late fee. I have used the service for approximately 2 years on 10 properties and I have probably collected $2,500 in just late fees during that time period that I would have never received if I was not using the service. It is also nice to know when a tenant has logged into their account and you can just use your smart phone to know if they have paid rent or not...I think it is a great site!

Hey everyone, 

Thanks for the responses! This certainly expanded my understanding of the topic. 

I noticed a couple people used automated clearing house (ACH) allowing the tenant to pay the rent at ease of a computer. And then using the PayNearMe service or a P.O Box if they don't use internet. 

Is a combo of these two methods frowned upon? 

@Blake Densmore  

@Jeremy Zindel  

Cheers, Bill

Originally posted by @Bill Womeldorf :

Hi everyone!

I am debating weather or not having making a tenant pay rent on a smart phone/ or computer that would require internet is ethical. 

I would think the vast majority of renters now use internet on the daily and will find this a helpful method. 

But, what happens when someone does not use the internet? 

Or does not even want to get it, do you then pay for it? 

Thanks everyone for reading!

Best, Bill :)

 I dont think you can make them pay online.  

I did not read through all of the responses. 

Our tenants utilize the bill pay service their banks offer. They have it set up to auto deduct from their account and the bank either direct deposits for us or mails us a check. They clearly understand that we are not responsible for lost checks and late fees still apply so they utilize that service at their own risk. Haven't had any issues so far. 

@Bill Womeldorf  , I don't think using two different methods is frowned upon at all. My tenants like that they have the option to use whichever method is more convenient for them. It caters to people who like the simplicity of paying bills online as well as people who operate their finances on a strictly cash basis and prefer not to deal with bank accounts.

I just started using www.cozy.co  Its free and very straightforward.

does cozy.co allow for setting up late fees?

It pulls the money out of their bank account and deposits into mine on the date that you choose so theoretically there should be no lateness.

Originally posted by @Sonny Sach :

It pulls the money out of their bank account and deposits into mine on the date that you choose so theoretically there should be no lateness.

 I would think that they would have the ability to stop it from pulling from their bank account through their online interface. Maybe they have a car repair, lost job, or a medical bill and it put them over their budget and they didn't have the money in the account. They would then not allow the draft or if the system drafted on an account with insufficient funds that would be a time when I would want a late fee applied. It sounds like this doesn't have the ability maybe?

honestly I am not sure.  I would suggest that you contact Cozy to confirm.

I don't require electronic payment but push for it. Check is a pain in the behind.

There are so many free and secured options for electronic payments. Why would anyone use a paid service?

I mainly use Chase Quickpay. You don't need a Chase account to use Quickpay. I also use Cash app by Square (same founder of Twitter). There is also Venmo app but I dont use it. They also clearly show who makes what how much payment. You can also request the payment as a way to remind the tenants to pay instead of calling or texting them.

I also use this mobile app called DIYLandlord to manage and keep track of all my retals. It works pretty well to replace excel.

DIY LandLord -
https://appsto.re/us/7QxiN.i

Hope that helps.

Originally posted by @Leo N. :

I don't require electronic payment but push for it. Check is a pain in the behind.

There are so many free and secured options for electronic payments. Why would anyone use a paid service?

I mainly use Chase Quickpay. You don't need a Chase account to use Quickpay. I also use Cash app by Square (same founder of Twitter). There is also Venmo app but I dont use it. They also clearly show who makes what how much payment. You can also request the payment as a way to remind the tenants to pay instead of calling or texting them.

I also use this mobile app called DIYLandlord to manage and keep track of all my retals. It works pretty well to replace excel.

DIY LandLord -
https://appsto.re/us/7QxiN.i

Hope that helps.

The paid service that I use allows me to collect late fees. The late fees collected spend just like real money. I have spent $300 on the service over the two year period and have collected $2,000 in late fees during that same period. Just another way to make a little more money.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here