What forms of payment do you accept?

33 Replies

What is the norm for accepted payment forms? (eg, cash, money order, etc)

Why do or don't you accept certain forms of payment?

@Michael Julian - Yes, you can turn away cash, and you should write it in your lease (acceptable forms of payment). However, make sure to check your state laws. For example, in CA, you must provide one option of payment that is neither cash or electronic payment.

@Joe Henry - Here is my list of what I like / don't like:

  • Not my preferred methods:
    • Cash
      • prone to theft
      • difficult to track
    • Personal checks
      • can bounce
      • must manually track
    • Direct deposit
      • you have to give your account & routing # to tenants
      • tenants choose how much and when to pay (difficult when late fees & evictions are involved)
    • Paypal
      • difficult to automate monthly
      • clawback (Paypal takes tenants' side)
      • irregular fees if tenant selects wrong option (pay via credit, not friends and family, etc.)
  • My preferred methods:
    • Money order
      • not likely to bounce
      • difficult to cancel (although many have limits)
    • Online rent collection
      • easy to track
      • auto-pay to reduce late payments

hmm; "this note is legal tender for all debts, public and private" so refusing would appear to me that a legal challenge could be made.

As I am not readily accessible to my property, cash is not practical, but when signing the lease, I do take it.  When payments are by cash, it prompt me to ask "How do you intend to make payments?"

Originally posted by NA Beard:

hmm; "this note is legal tender for all debts, public and private" so refusing would appear to me that a legal challenge could be made.

As I am not readily accessible to my property, cash is not practical, but when signing the lease, I do take it.  When payments are by cash, it prompt me to ask "How do you intend to make payments?"

 That's exactly what I was thinking. I rarely have this come up, but have taken cash before for a deposit and a rare rent payment, (was at the unit making repairs and she had it in cash). I can see the video's point, and I would not want to go door to door every month advertising I was collecting cash rent payments, but I wouldn't lose 5 C notes in my car either and am not afraid of carrying cash.

Dirty paper is just as easy to deposit as a check, and I know it is good, (unlike a check), so there is that....

Originally posted by :

- Yes, you can turn away cash, and you should write it in your lease (acceptable forms of payment). However, make sure to check your state laws. For example, in CA, you must provide one option of payment that is neither cash or electronic payment. [/quote]

I might do so if I had many units rented by people without checking accounts, but like to leave every option open when collecting dead presidents and my properties are higher end so it rarely comes up. Thanks for the reply!

@Joe Henry You could accept cash using PayNearMe. I use it for some units and it solves my need to be automated and traceable as well as the tents desire to pay cash. Their fee is only about $4 per transaction so for me it's worth it. I also accept credit cards and money orders. No personal checks.

Thanks for all the answers guys. I didn't know about several of these methods, and will be looking into whether I can/can't legally accept/deny cash payments.

ACH looks interesting. Does anybody have experience or advice they're willing to share on this? Seems as a tenant I would be less comfortable giving direct access to debit my accounts than to use other forms of payment. Anybody have trouble with this?

Interesting view on cash. I have always happily accepted cash, because I see no risk. I do see the point about theft, but in my case I am in safe areas. 

One thing I recommend if you do accept cash is count the money when you are standing in front of them. I have had situations where I was shorted and even a situation where the tenant gave me an extra $50. Then I also give a receipt. The receipt is to protect both of you. 

We have been considering working with an online rent payment service. My wife listens to Dave Ramsey and just heard a caller who told him that his tenant had given the online payment service a bank account number for the Salvation Army. It was something like 6 months before the Salvation Army noticed and now they have to give the money back. I am really wondering why the online payment service wouldn't be responsible. It is kind of scary. I am sure there is more to the story.

As far as ACH and checks, most people don't realize that someone can come back later and dispute only to have the money leave your account. Cash cannot be taken once in your account. I think cashiers checks and money orders are pretty secure too.

Originally posted by @Joe Henry :

Seems as a tenant I would be less comfortable giving direct access to debit my accounts than to use other forms of payment. Anybody have trouble with this?

If you were a tenant you don't think that way. If you did think that way you'd probably be a landlord or at least a home owner and not a renter.

Originally posted by @Joe Splitrock :

We have been considering working with an online rent payment service. My wife listens to Dave Ramsey and just heard a caller who told him that his tenant had given the online payment service a bank account number for the Salvation Army. It was something like 6 months before the Salvation Army noticed and now they have to give the money back. I am really wondering why the online payment service wouldn't be responsible. It is kind of scary. I am sure there is more to the story.

Probably a lot more to that story as I don't know how a rent payment service would be able to just debit an account because they had the account numbers, it's typically a verification by the account holder giving the inquiry permission.

@Joe Henry , Some of my tenants are uncomfortable with ACH or run into technical difficulties with IPN (Intuit Payment Network) which is what I use. 

Some of my tenants love ACH.

Sadly IPN is going away. It is being replaced by a service that will eventually cost $13 per month. I don't think I have enough incoming payments to warrant paying $13 per month. Dwolla.com looks like a reasonable alternative but they don't publish their pricing online. Anyone know what their pricing is?

For background check fees, I will take cash, check, money order or payment via IPN*.

For balances due prior to moving in (first month's rent and deposit) I will take all of the above, however the check must clear the bank prior to me handing over the keys. 

For rent, I prefer IPN* or they can send a check or money order to my PO box. 

*Now that IPN is being discontinued, I just sent out notices today that we are switching to Intuit Quickbooks Payments, which is basically the same thing except you have to have QB2016 or pay the fee to use it online. I already use QB so the $200 to upgrade it now was a little annoying, but seems to be the best solution for us currently.  Still $.50 per transaction, and I don't have to take credit cards (which I don't want to do anyways).

@George P. came up with another solution to the IPN mess for those that don't want QB, he is using Chase Bank and their person to person payment system.

 I had a few tenants paying in cash but I wasn't comfortable with it, plus it meant time out of my day to meet them, pick up the cash, write a receipt, then go deposit it on my way home.  The ones paying in cash were stopping by while I was working on an apartment in the building (or next to it) or asking me to stop in while I was on site.