Auto pay

24 Replies

Hi all, I just had a tenant request to set up automatic rent payments so he does not have to deal with writing checks every month. This is the first time anyone requested this and i dont have any idea how to set it up (but i like the idea).  PayPal seems to be the most well known..? Does anyone have any suggestions??

It would probably be easiest to have them set it up on there banking end. That way they are in control and can't blame on you if you pull and it overdrafts
Originally posted by @Matthew Cole :
Most banks will allow payments by using your email address. I do the majority of mine through CHASE.

 I will give this a try... Does this work If I have a different bank? What is a typical fee?

Thx for the response!

Originally posted by @Kimberly H. :

We take 1 years worth of postdated checks.

 That's interesting, I haven't heard of anyone doing that. Do you find some prospective tenants being turned off by this? I assume you would need to lay this out in the lease up front?

There is no fee for CHASE quick pay. Tenant sends rent, you receive email notification and accept payment. You can also request rent this way, but I tell tenants up front I want payment this way and they just send. That way if I haven't reviewed rent by the 1st I send a notice to start the eviction process.

You can use a variety of options. If you have the same bank as your tenant, there are some person to person options available through the bank interface. I recommend some more formal business oriented options below:

cozy.co - website with no fee rent collection service- no fees for either party. newer entrant but seems trustworthy and user friendly. haven't used this yet.

https://www.biggerpockets.com/forums/92/topics/198046-cozyco-reviews

https://ipn.intuit.com/ - Intuit payment network- 50 cent fee per transaction and can be recurring payment. reputable company and relatively easy to setup. I use this for one of my properties. not as feature rich as others but does online payments easily and securely.

https://www.erentpayment.com/- i used this once and has good customer service and good auto payment features. $3 fee per transaction/month for landlord or you can opt to bill the fee to tenant since they want to do this...

I've used other free services before but they have closed down in the past few years since they weren't able to generate a profit with their other non-free services (go figure!)

Good luck!

If you aren't set up to accept electronic payments but tenant is already doing automatic bill pay, then the tenant can just treat the rent like another bill and have their bank mail a check to you. 

@Joe Doman

We don’t require it, we offer it as an option and it’s our most popular option, they like not having to worry about remembering the first of the month. I explain that since the checks are postdated we cannot cash them before the first of each month. If they want to mail or drop off a check they can still do that. We just require that the postdated checks be for the entire lease term and whatever method they pick is for the entire lease term so I’m not increasing my management burden. Knock on wood none have bounced yet.

After we set up a bunch of bank accounts and got it all set up in Quicken,a year later found out our bank charges $40/month to accept autopay payments so we that’s why we don’t do that. I’m not interested in moving all the accounts to another bank and the bank we use does have the best location for where we are located.

Also, I had thought based on what I read online that if you are in the process of evicting someone, and you accept some money, it screws up the eviction; it’s one of those things that depends on your local eviction laws. Erentpayment.com allows you to block accepting payments from certain tenants for that reason last I checked.

@Jeff Bridges

Thanks for the post. I am looking into cozy.co and intuit... I guess my only concern would be security/liability. Maybe I am being paranoid but if there was a hack of some sort where the tenants' money was stolen, i would bet the landlord will be held responsible. Where as if the auto pay was done through a bank, the bank would pay for any fraudulent activity..? 

Hey Joe,

Another option would be through Vanco payment solutions.  I use this for another business of mine.  They are super cheap (25 cents a transaction) and fairly quick as well.  I highly recommend them.

I use erentpayment.com and it's easy. I split the $3 fee in half so the tenant pays $1.50 and I pay $1.50, since it really makes it easier on both of us. It's a nice service because it emails the tenants automatically to let them know rent is due, and you can set it up so that if they are late paying rent, the late fees are included automatically and they can't pay anything less. They also do auto/recurring payments and have a feature where you can customize a rental application and email it to prospective tenants. Good small business and I recommend them

@Joe Doman I have one tenant using cozy.co because her and her boyfriend want to pay their halves and I don't want to deal with any splitting. I want 1 payment, on time. Cozy allows them to do this and I don't pay anything.

For my other tenant I use the bill pay through Quickbooks. It works just fine except that there is a glitch when downloading the transaction into your books (the transfer is fine, but the download has problems). They said it's known and ignore it. The transaction still goes into the books, it just doesn't mark it as finished in the software.

Overall, both very easy. I prefer quickbooks because it is faster for me to enter, but both work great for different reasons.

we use intuit. been using it now for about 3 months since the previous one went bankrupt. there are a ton of others too. hard part is to try one and find out you dont like them and having to change.

@Joe Doman I use Cozy.co.  This will be my second month of accepting payments which are facilitated through their website.  They don't take or hold the money, they simply initiated the ACH transfers from your tenants bank account to your bank account.  First month went fine, though it was slow.  The 4th of July weekend was partially to blame for this, and I'm also wondering if it was slower given it was the first month.  I guess I'll find out in a few days, though with the 1st falling on a Saturday, it may also be a bit slow.  

It is very convenient and you can't beat the price of free.  

Originally posted by @Joe Doman :

Hi all, I just had a tenant request to set up automatic rent payments so he does not have to deal with writing checks every month. This is the first time anyone requested this and i dont have any idea how to set it up (but i like the idea).  PayPal seems to be the most well known..? Does anyone have any suggestions??

Joe,

RISK. If tenant stops paying rent and you proceed to evict them, there's no way of blocking their late deposit of rent directly into your account. If it's mail away check, and it arrives late, you can just not accept it late.So...

I would tell your tenant to set that up, but before you do that, if you do not have an LLC, you will have to give them your bank account and routing numbers...so don't do it unless they've proven themselves to be a good tenant and you trust them.

Most of my tenants direct deposit, but they set that up with their bank.  I also will not offer direct deposit until I'm sure they won't turn into a problem tenant (they've been renting from me for 6+ months with no missed/late pays.

Alternatives...

-AppFolio

-Buildium

-Smart Property Systems

-If you have an LLC setup you can get "deposit-only" cards and provide those to your tenants

Best of luck to you.

Another vote  for erentpayment.com. I offer it to all new tenants. If they agree to an auto-draft that they can not change, I pay the $3 a month. If they just want the ability to pay but they control initiating it, they pay $3.

The other thing I do is if someone does not use erentpayment and they are late for the first time, I offer to waive the late fee if they will sign up for the autodraft (and I'll pay the $3 a month). So far it has worked great - and as others have said it is a small business with very responsive customer service.

I use Intuit as well, no issues in 2+ years.  $.50 per transaction, you can send invoice automatically, they can pay automatically.  You can accept credit cards (for a fee) but I do not.

I pay all our bills except taxes through my Chase online banking, free and easy to set up auto payments there too.

Kelly

Originally posted by @Jennifer L. :

@Joe Doman I use Cozy.co.  This will be my second month of accepting payments which are facilitated through their website.  They don't take or hold the money, they simply initiated the ACH transfers from your tenants bank account to your bank account.  First month went fine, though it was slow.  The 4th of July weekend was partially to blame for this, and I'm also wondering if it was slower given it was the first month.  I guess I'll find out in a few days, though with the 1st falling on a Saturday, it may also be a bit slow.  

It is very convenient and you can't beat the price of free.  

 Hi Jennifer,

The Federal Reserve wasn't closed this year for the 4th of July holiday, either that Friday or following Monday, so there should have been no banking delays this year.  I actually work for eRentPayment and our payments that ran on the 1st were deposited that following Monday.  

I was going to have them set it up through their bank but they will be switching in the near future because they are getting married. I will look into cozy.co and follow up with a review.

Thanks everyone!