Paying rent with Cash - Simplifying processes

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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

11y

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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Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
11y
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!
This made me laugh too. 7 pages where 75% of the respondents suggest online payment systems that require bank accounts. I can't tell if it's a Millennial tech prejudice, or a class thing. Cash paying, totally unbanked tenants are real. Millions and millions of 'em. This thread is a real service in that Brie is in the trenches with the cash services currently available in her tenant area.
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Brie SchmidtBusiness Member
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
11y
Don't get me wrong, I prefer ACH - We offer it for free to tenants in that market, just none have chosen it.
14 Months ago I owned none of these properties, and we bought from 9 different sellers, each with their own way of doing things. So the training of the tenants has been an ongoing process, but 90% of them are used to their landlord picking up cash and that is what their leases says
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Ronda R.
Investor · Atascadero, CA · Member since 2015 · 238 posts · 90 votes
10y
@Brie Schmidt Thank you for taking the time to report back with all the info you have gathered. Many of us have benefited from it. I found this thread researching a cash payment method for my sister-in-law who just bought a rental with cash paying tenants. We will see what she chooses.
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Jerry Bruckenheimer
Investor · Harker Heights, TX · Member since 2015 · 76 posts · 34 votes
10y
Hi, if a newb may offer a piece of advice:
American Express offers a product called Serve.
Tenants can load cash into their card at 7-11, Walmart, Family Dollar, CVS
Tenants can then use Serve's Bill Pay function to send checks to you or
Tenants can transfer money from their Serve account directly to your Serve acct (faster)
No credit check required for the tenants to get a Serve card.
No fees (depending on the Serve version you choose)
Serve is superior to all of the other prepaid loading cards in lower fees, faster processing, more locations for loading, easiest transfer or movement of money loaded onto card, monthly/daily load limits, etc.
The unbanked population is a real thing, it's not as simple as just telling them to open an account, Chex system and poor credit prevents that in many cases. Serve will also accept and encourages direct deposit of funds to Serve cards from whatever source they get them, work, social help programs, tax returns, etc. This may be a benefit to the tenant as well as many of them pay exorbitant check cashing fees.
Serve is also great for Manufactured Spending if anyone is in to that but that's a subject for another day.
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Mike Wood
Developer · New Orleans, LA · Member since 2015 · 1k+ posts · 898 votes
10y
@Brie Schmidt I don't know if you solved your problem yet. I have some tenants that pay need to pay in cash or money order (they do not have bank accounts). I use rentpayment.com and I not that their is an option to pay at any MoneyGram location using the rentpayment.com account number, and some specific other info. I do not believe that the tenant needs to set this up online, as I have set up all the tenants in they system.
Most of my tenants use the ACH payment function. But having the MoneyGram option was what drove me to use rentpayment.com (in addition to the company's background/size).
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Curt Smith
Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
10y
@Brie Schmidt Have you found a working solution?
@Jerry Bruckenheimer offered:
American Express offers a product called Serve.
https://www.americanexpress.com/serve/
I have not tried Jerry's suggestion of Serve it looks like a tenant needs a computer or a better smart phone to get the card. Idealy I'd get the card FOR the tenant, mail it to them... I doubt that would work for AmEx... What ever the system, the tenant can't be required to have good internet or computer skills or a bank account.
Brie?
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Brie SchmidtBusiness Member
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
10y
Originally posted by @Curt Smith:

@Brie Schmidt Have you found a working solution?
@Jerry Bruckenheimer offered:
American Express offers a product called Serve.
https://www.americanexpress.com/serve/
I have not tried Jerry's suggestion of Serve it looks like a tenant needs a computer or a better smart phone to get the card. Idealy I'd get the card FOR the tenant, mail it to them... I doubt that would work for AmEx... What ever the system, the tenant can't be required to have good internet or computer skills or a bank account.
Brie?
We did, we went with PayLease and have been happy with it.
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Curt Smith
Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
10y
@Brie Schmidt
Paylease: any details re landlord setup, renter setup for cash only renters?
Their website has a lot of features and not much setup explanation. tnx
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Brie SchmidtBusiness Member
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
10y
Originally posted by @Curt Smith:

@Brie Schmidt
Paylease: any details re landlord setup, renter setup for cash only renters?
Their website has a lot of features and not much setup explanation. tnx
It was a lengthy set up process, but then we just got cards for tenants and tagged each tenant to a card
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Erik Orozco
Mcallen, TX · Member since 2017 · 92 posts · 72 votes
8y
@Brie Schmidt Gotta love it when you have the same question and it’s been answered with many solutions on BP already!
@Adam Johnson Thanks for sharing. I will be trying this exact method for my 1st property since most of my tenants pay cash.
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