In preparation for our move into our first investment property (which we will be occupying) I was curious if anyone had some information on some options for the renters to make payments. We will likely be doing checks only however are there any SECURE and trusted direct deposit applications that have been an easy transition for payments? Please let me know what you've used in the past and your experience.
Thanks in advance
There are so many ways, it's difficult to enumerate them all. You can ACH the rent directly out of their account, you can charge a credit card ... paysimple.com is the first hit on google for ACH . I use square, but usually I get cash or money orders.
Just keep in mind that direct deposits can be a double edged sword. The downside happens in the case of evictions. A tenant can make a partial payment which can stop the eviction. So screen your tenant quality wisely when doing direct deposits. Include a clause concerning partial payments in your lease as well.
While not everyone wants it, I have found that the younger crowd (sub 30 say) loves when I offer credit card payments. Now that tends to strike many people as odd, but remember that most millennials don't know the first thing about even writing a check. And "credit card" often ends up being a debit card instead.
Also, I love to make a point of suggesting tenants use their bank's FREE bill pay service. I've even helped them set the payment up. Most banks offer this now, even the small ones, and the checks get setup on an automatic setup where they are mailed out by the bank and arrive on time! While I cannot require that, the power of suggestion helps often and the results are incredible! It's the reliability of section 8 payments, without the section 8 tenants!
Cozy.co is a service many people use. I just started it for one of my units where the roommates want to split their rent. It aggregates their payment and once they've all paid it transfers to your account. This way they don't have your account information and you don't have to care about who is paying how much.
Cozy gets their money when you use them for credit checks and such, so their payment processing does not cost.
We use Intuit Payment Network- $.50 per transaction and the funds are available in 1-2 business days. You can send e mail invoices and accept credit cards (or leave that feature off like I do).
I too like to suggest the free bill pay. I have helped folks set up the bill pay and it's a great option because they can automate the payments just like they would with direct deposit. The only downside is that you (the landlord) still has to cash their check. My bank offers the mobile deposit so it makes it super easy to do that and it's a win-win as they can automate payments and I never have to go to the bank.
Chase Bank has a "QuickPay" feature available where you can send money directly, free of charge, and it takes about one business day to get the money. This may be an option for some folks who are really dead set on electronic payments. I've used it with friends in the past and it's worked out great.
We offer Chase Quick Pay and online payments through Cozy.co and for our less computer savvy tenants we offer PayNearMe
Whatever you do, don't require them to give it to you in person at your address (even if its just the next unit over).
I'd also recommend using software and collecting rent electronically. That way, you can collect rent AND track the tenant's ledger in one place automatically, so you don't have to manually enter rent in a spreadsheet somewhere or something. It's well worth the money.
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