How come some tenants don't have bank accounts?

Question

I am renting out my house, and noticed a few tenants put N/A on the application form where it asks for their checking / savings account.

Aren't checking accounts free to open? What does a lack of bank account say about the tenant?

Dawn Anastasi · Answer

Most of my tenants don't have bank accounts. Cash doesn't bounce and I don't have to worry about that.

Jeremy Pace · Answer

usually it means either:

1) that they have over-drafted a bank account, and now can't get another

2) they don't have enough of the required documentation to open a bank account

Jay Hinrichs · Answer

@Joe Holly

your tenant base in the B - C and D are mostly money order folks and cash.

REason:

1. bounced to many checks and they are in a federal data base and will never be able to open a checking account under that SSN again

2. foreigners Hispanics don't trust banks and just use cash.

The Aussie clients I had were astounded that renters could be in such a place as their system is far more advanced than us... no checks in AU everything is electronic.

Hugh Ayles · Answer

The reason they don't have a bank account is to avoid having creditors or the government from garnishing their wages.

I am an employer. Add this to the list of things I miss not knowing about when I worked for someone else.

Anna Buffkin · Answer

With or without a bank account, I prefer money order over check. Can't bounce a money order.

Garrett F. · Answer

The bank of Mom closed it's doors and Walmart cashes pay checks.. No bank account is typically a tall tale sign of credit/child support/ or financial issues.

If your rule of thumb is 3x the rent as income then there should be a bank account to support this. A tenant that cant take care of their finances will struggle to care for your property. Its not worth giving up the insurance of a bank garnishment if they leave your property in shambles

Don't be reckless with cash

Garrett

Gabe G. · Answer

Had the same thing on a tenant that moved into one side of my duplex recently.

Get's her paycheck put a debit card, no checking account, so she couldn't do the online option we planned. Other side of duplex same way, cash only.

The rest of my units are SFH, I very rarely get people in that space, that doesn't have a bank account. And If I do, I know I made a mistake. Only person that didn't have a bank account, I let into my nicest house(my 2nd property) Degenerate was evicted 2 months later, didn't take care for the place. Big mistake. I will be apprehensive in the future if I approve someone for a SFH, that doesn't have a checking account.

Ross Bernard · Answer

If they have a good credit score and no bank account, I wouldn't be very concerned. If they have a bad credit score and no bank account, I would not spend another second considering them. But then, it comes down to your risk tolerance.

Randy E. · Answer

Unless a customer maintains substantial deposits, nearly every commercial bank charges fees to customers to open checking accounts. It's been that way for years, decades even. Some banks require over $10,000 in deposits if a customer wants a free checking account.

Jeremy Pace · Answer

I've had pretty good success charging my tenant's benefit cards (MasterCard stamped). In the town where they live, the best ATM charges $3.50 and caps withdrawals at $100, so even a $2.75 fee from Square (per $100, 2.75%) saves them money, and then they don't have to stand there at the ATM for 20 minutes while it tries to dispense all of their money (fun side note, it only dispenses $10 bills ... and $1500+ in $10 bills is a real pain for me to lug around in my pocket.

How come some tenants don't have bank accounts?

How come some tenants don't have bank accounts?

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