Paying rent with Cash - Simplifying processes

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Paying rent with Cash - Simplifying processes

Brie SchmidtBusiness Member
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes

Our tenants pay rent with cash.  Some send money orders, some deposit cash in our account, but a majority used PayNearMe to pay at family dollar locations.  Now the Family Dollar in our area will no longer accept PayNearMe.

What are some alternative options?  

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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
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I used to be a very big fan of tenants depositing money into my bank accounts but found on a larger scale it does not work out that well.

One problem is they never completely fill out the slip. They leave out important information such as their address, name and or unit number.

One solution to this problem was suggested by @J Scott which is to hand them out pre-printed slips. I have been there and done that. Unfortunately a large amount of tenants will loose their slips every month, thus creating more issues for the landlord.

As I have scaled up the number of rental units I have found that the very best and simplest method is they must have their money order or cash at our office on or before the due date. They can mail it, hand deliver to our drop box or come inside during business hours and hand it to a Holton Wise employee. Obviously tenants are told that a money order is the way to go if they are mailing or dropping rent in the box.

Doing it this way allows you to overcome common objections and excuses tenants will have for each of the ways they can deliver to us the rent.

"It's in the mail"------Should have hand delivered it.

"Your office is closed by the time I am off work"------Drop box is open 24/7.

"I don't have a car"-------Put it in the mail.

One more issue I have with direct deposit rent collections. A savvy tenant can stall the eviction process by depositing a partial rent payment in your account and receiving a payment receipt from the bank teller.

If they come in with a partial payment you can refuse it. If they mail or place a partial payment in the drop box you can refuse payment by not cashing it.

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  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
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    @Account Closed

    You must have misquoted me.  I've never said anything like that and I've never had any tenant steal from my bank accounts.

    It's not a good idea to have tenants deposit directly into your accounts because you cannot refuse partial payment of rent.  That was what I mentioned initially.

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  • Maggie Tasseron
    Investor · Palm Desert, CA · Member since 2015 · 215 posts · 64 votes
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    Originally posted by @Vincent Crane:

    You need to set up some form of online payment or do checks that they mail. There's no way anyone should be driving around picking up checks from them, and definitely no way that you should be accepting cash. One of these times you'll hear, "I put the envelope in the mail or at your door with all my rent in cash and now I can't pay it" when in reality they never did.

     You got that right! I had a tenant once who told me she had put her rent (cash) in an envelope in my mailbox. Funny coincidence that she was chronically late and eventually I had to evict her. PS: Did you know that the Post Office can remove anything they find in your mailbox that wasn't put there by their carriers? 

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  • Maggie Tasseron
    Investor · Palm Desert, CA · Member since 2015 · 215 posts · 64 votes
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    Originally posted by @Brie Schmidt:

    Our tenants pay rent with cash.  Some send money orders, some deposit cash in our account, but a majority used PayNearMe to pay at family dollar locations.  Now the Family Dollar in our area will no longer accept PayNearMe.

    What are some alternative options?  

     Hi Brie: Isn't there a bank near where the tenants live? You may need to open a new account if you don't already bank there but better than them sending it through the mail.

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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    @Maggie Tasseron yes, there is a bank location in our area, and some tenants deposit cash in our account.  

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  • Kyle Goldich
    Investor · Atlanta, GA · Member since 2015 · 3 posts · 1 vote
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    We use an ATM "deposit only" card for all of our tenants. This allows them to stop by a nearby branch/ATM and deposit rent. The deposit only card does not allow them to withdraw or see the account balance. To get these, just ask you bank and get "tenant 1", "tenant 2", etc. as the name on the card, so you can reuse them with future tenants. Hope this helps!

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
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    Originally posted by @Jon Q.:
    Originally posted by @Account Closed:
    Originally posted by @Jon Q.:

    @Steve Babiak

    We both know that most tenants aren't that smart and will not go through those steps in reality.

    C'mon  you can do better than that. :) This argument shows up here on BP quite often.  Anyone you write a check to and anyone who pays you via check has your checking account number.  Those are the facts.   These same tenants that you say aren't smart enough to get the the checking account # off an endorsed check probably aren't smart enough to commit bank and mail fraud either.  So, where are the examples of tenants stealing from a landlord's checking account. How do they do it? What's their hustle?

     I'm not sure what you're talking about.  Who said tenants are stealing from landlords bank accounts?  I'm I missing something?

    Sorry about that.  Thought it was you saying not to let tenants deposit into bank accounts due to fraud.  

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  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
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    @K. Marie

    No worries. Thx

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  • Maggie Tasseron
    Investor · Palm Desert, CA · Member since 2015 · 215 posts · 64 votes
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    Originally posted by @Kyle Goldich:

    We use an ATM "deposit only" card for all of our tenants. This allows them to stop by a nearby branch/ATM and deposit rent. The deposit only card does not allow them to withdraw or see the account balance. To get these, just ask you bank and get "tenant 1", "tenant 2", etc. as the name on the card, so you can reuse them with future tenants. Hope this helps!

     Wow, I'd never heard of that. What a good idea and thanks for posting this.

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  • Kyle Goldich
    Investor · Atlanta, GA · Member since 2015 · 3 posts · 1 vote
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    Originally posted by @Maggie Tasseron:
    Originally posted by @Kyle Goldich:

    We use an ATM "deposit only" card for all of our tenants. This allows them to stop by a nearby branch/ATM and deposit rent. The deposit only card does not allow them to withdraw or see the account balance. To get these, just ask you bank and get "tenant 1", "tenant 2", etc. as the name on the card, so you can reuse them with future tenants. Hope this helps!

     Wow, I'd never heard of that. What a good idea and thanks for posting this.

     My pleasure :)

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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    Originally posted by @Brie Schmidt:

    @Timothy Gleason and @Brandon Turner and @K. Marie P. and @Jassem A.

    http://www.paylease.com is just like PNM but they use MyCheckFree locations.  

    I just spoke with them and their pricing is similar to PNM - But they deposit into your checking account much faster, within 24 hours.  PM me if you are interested and I can give you the guy's contact information.  

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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    Originally posted by @Account Closed:

    See above post with an update

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  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
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    Originally posted by @Brie Schmidt:
    Originally posted by @Brie Schmidt:

    @Timothy Gleason and @Brandon Turner and @K. Marie P. and @Jassem A.

    http://www.paylease.com is just like PNM but they use MyCheckFree locations.  

    I just spoke with them and their pricing is similar to PNM - But they deposit into your checking account much faster, within 24 hours.  PM me if you are interested and I can give you the guy's contact information.  

    Keep in mind these are all ACH payment systems, so your funds are subject to ACH clearing rules. Like IPN, the funds are available quicker, but if the ACH fails to clear, they will debit your account. Usually the debit occurs about a week after the funds are deposited into your account. Hopefully you never have this issue... I'm just relaying from experience of tenants paying w/o account balances to support their payment.

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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    @Chris Martin - these are cash paying tenants so it is a different system than ACH

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  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
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    So if you go to their web site, which is in your post, they say "Residents pay online with credit card or ACH." I guess I'm missing something.

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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    Originally posted by @Brie Schmidt:

    @Timothy Gleason and @Brandon Turner and @K. Marie P. and @Jassem A.

    Here is what I found out - 

    http://www.rentpayment.com/ is just like PNM but they use Moneygram locations.  The underwriting process was pretty simple and it took 6 days to approve.  They needed bank statements, drivers license,and a copy of our EIN docs.  Tenants will need a receiver code and ID to pay and they just get charged the moneygram fee, which varies by location.  

    http://www.paylease.com is just like PNM but they use MyCheckFree locations.  The underwriting process has been a pain.  It has been a week and a half and they still have not approved me.  They asked for a ton of docs and now they want a personal letter from my bank verifying info my bank would not have.  The cost is $25 a month to use the service and the tenants pay $4 per transaction flat rate.  

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  • Scott Lewis
    Developer / Investor · Denver, CO · Member since 2014 · 64 posts · 31 votes
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    Hi Brie,

    Have you looked into using PayPal or Square (not helpful for cash tenants though?) With PayPal, your tenants have a couple of options to pay you as long as they have a bank account or credit/debit card.

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  • Jassem A.
    Investor · PA · Member since 2013 · 1k+ posts · 602 votes
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    @Brie Schmidt

    Sounds like more of a pain than it's worth to me.  I've decided to let tenants pay rent to my Woodforest account in Walmart; they are open weekends and until 7 PM most days.  If they aren't open, I believe Walmart has a "Bill Pay" counter where they can print money orders and mail them for about $1.

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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    @Scott Lewis we already offer online payments, but 95% of these tenants pay in cash

    @Jassem A. yea, it was a pain, but we don't have any walmart close by

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
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    Originally posted by @Brie Schmidt:
    Originally posted by @Brie Schmidt:

    @Timothy Gleason and @Brandon Turner and @K. Marie P. and @Jassem A.

    Here is what I found out - 

    http://www.rentpayment.com/ is just like PNM but they use Moneygram locations.  The underwriting process was pretty simple and it took 6 days to approve.  They needed bank statements, drivers license,and a copy of our EIN docs.  Tenants will need a receiver code and ID to pay and they just get charged the moneygram fee, which varies by location.  

    http://www.paylease.com is just like PNM but they use MyCheckFree locations.  The underwriting process has been a pain.  It has been a week and a half and they still have not approved me.  They asked for a ton of docs and now they want a personal letter from my bank verifying info my bank would not have.  The cost is $25 a month to use the service and the tenants pay $4 per transaction flat rate.  

    Great info Brie.  This makes cash rents seem like a non issue.  Moneygram is widely represented, even in rural locations where I am.  Tenants pay the fee.  You get direct deposits. I'm assuming you can set the exact amount?  So the payment will be rejected if it's a partial or for the wrong amount?

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  • Nicole A.Pro Member
    Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
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    I've read this entire thread and it is crazy how many times you have had to repeat that your tenants are CASH-ONLY type of people. lol!

    I read into renterup.com and see there is a $4.95 fee that you can have the tenant pay (just like with paynearme), but there is also monthly per unit fees you must pay:
    https://www.renterup.com/pricing/#toggle-id-2

    As abundant as 7-Eleven is, I can't believe there is none near your rentals....or the ACE Cash Express. What terrible luck! You did double check their location map, @Brie Schmidt?
    http://paynearme.com/en/payment-locations/

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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    Originally posted by @Account Closed:

    Great info Brie.  This makes cash rents seem like a non issue.  Moneygram is widely represented, even in rural locations where I am.  Tenants pay the fee.  You get direct deposits. I'm assuming you can set the exact amount?  So the payment will be rejected if it's a partial or for the wrong amount?

    I don't know, we can evict with a partial payment so I did not ask.  

    PayLease lets me set up the tenants online and issue a ID number whereas RentPayment requires the tenant to sign up online and get issued an ID 

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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    Originally posted by @Nicole A.:

    I've read this entire thread and it is crazy how many times you have had to repeat that your tenants are CASH-ONLY type of people. lol! 

    Seriously. I am not sure I could have said it enough


    I read into renterup.com and see there is a $4.95 fee that you can have the tenant pay (just like with paynearme), but there is also monthly per unit fees you must pay:
    https://www.renterup.com/pricing/#toggle-id-2

    I did look into this too, but there are not any close Dollar General Stores and that is all they support right now

    As abundant as 7-Eleven is, I can't believe there is none near your rentals....or the ACE Cash Express. What terrible luck! You did double check their location map, @Brie Schmidt?

    http://paynearme.com/en/payment-locations/

     Believe it or not, there are only four 7-11 stores in the entire city of Milwaukee that accept it.  No family dollar or Ace cash express stores accept it in our area

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  • Timothy Gleason
    Military · Pensacola, FL · Member since 2014 · 53 posts · 63 votes
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    ...this smells like a business opportunity for Milwaukee!  Could even be as simple as a reverse-ATM kiosk. (Put the cash in, instead of taking it out) 

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  • Adam Kozuch
    Investor · Milwaukee, WI · Member since 2015 · 74 posts · 13 votes
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    @Brie Schmidt To clarify, no Ace or Family Dollar in Milwaukee accepts it? I was able to find Family Dollar locations all over the greater Milwaukee area. 

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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    Originally posted by @Adam Kozuch:

    @Brie Schmidt To clarify, no Ace or Family Dollar in Milwaukee accepts it? I was able to find Family Dollar locations all over the greater Milwaukee area. 

     As of 8/20 Family Dollar terminated their relationship with Pay near me in certain areas, Milwaukee is one of them.  

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