Tenant payment options

10 Replies

I try to direct my internet savvy tenants to use cozy.co and pay via ACH. For my non-internet savvy tenants or lower income ones without steady bank account balances, I issue them a deposit-only ATM card from my business checking account, which allows them to pay with any combination of cash or checks as necessary at the nearest bank location (in my case, its any bank of america ATM). I no longer supply my home address for them to mail checks or alternate payments. trying to simplify rent collection and eliminate need to physically be present to collect or deposit rent checks...

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I generally leave my tenants the flexibility to pay the way that is convenient for them. I have taken some options away from tenants who misused the method they chose. Those tenants preferred to mail checks, often late, and the checks bounced too often. I always enforced the fees but it was still too much work. I limited a few of those tenants to online payment only. That made collection much easier for me.

I am quite flexible with rental payments as I believe it can encourage tenants to pay on time.  I accept most methods except cash as it can't be tracked.  

I deal with mostly higher income tenants and it's quite easy to convince them to set up either a reoccuring online bank transfer or online bill pay which sends a bank check to my mailing address.  

The other option is accepting personal checks or money order by mail.  I use Bank of America so a few tenants like to actually go to a physical location and deposit money into the account (I provide them with the account info) and that has worked quite well.  I am not willing to pay fees to accept payment from tenants at this time.

@Yvette M. Two.

1) We send monthly invoices (generated automatically) that tenants can click the link to pay electronically from their bank account.

2) Deposit their payment at any Chase branch into an acct number I give them. I have two tenants who prefer to pay in cash, so this is what they do.

I'd venture to say every tenant I have views this as a perk rather than a limitation.

I allow my tenants to pay electronic or with check but I push them heavily to electronic because checks go through the post office, then deposit, then clearing. I make it clear they had better send them very early because until the check clears they have not paid. For electronic payments I offer cozy.co and ACH payments with Intuit. Both give me notices when the payment is scheduled so I sleep better at night. So far all of my tenants are okay using e-payments. I have heard some landlords offer a $5/month discount for electronic payments as an incentive. Pretty good idea I think.

I let them pay whichever way is most convenient for them (except cash), but I highly prefer and encourage ACH. I've give up to $10/mo discounts for ACH because it's so much more convenient for me.  It happens automatically and automatically shows up in my accounting system so I literally have to do nothing to accept it.  No trip to the bank, entries, it's just done.

I recently started allowing credit card payments too, but most tenants don't like to pay the fee which can be around 3%.  That adds up fast on larger payments.

@Yvette M. I run everything through Quickbooks Online.  I love it, and I'm a big fan of making the accounting system the center of the business.  We've got around 15 units at the moment - I suspect when it gets much higher than that (25 units?) it will make sense to move to something along the lines of Buildium.