Rent Payment via ACH transfer downside?

Question

Hello BP!

I currently have two rental properties and both tenants pay their rent via ACH transfer into my bank account.  It's pretty much a bank account to bank account transfer.

Are there any downsides to electronically collecting rent THIS way?  I've read about other e-methods (sites) to use on BP.

Thanks!

John T. · Answer

@Jordan Moorhead and @Mike S. Thanks.  That makes sense - protecting the information.  I guess it's just the norm in my market.  Cozy is definitely something I'll look into.

@Andrew Boettcher That is crazy.  You're right - not worth the risk.

@Amy Fowler Thanks and np.  Do you see the transaction in your account as pending though?  My tenants directly send ACH on the first and I usually get it by the 3rd or 4th.  If it takes 5 days to clear with Cozy, how do you handle or determine late fees?

Jordan Moorhead · Answer

@John T. I personally wouldn't have the tenant having my personal information. Cozy is very organized and professional looking, even offering to sell the tenant renters insurance. They don't charge you anything and also do background checks, listings, etc.

Jordan Moorhead · Answer

Cozy lets you know when the money has been drawn so you know they've paid on time.

Jeff Gates · Answer

The professional renter story. They give you funds, get the rental key in their hand, take possession of the property, then the funds are never cleared against the bank, due to NSF. My suggestion is; never take a deposit from a new renter by ACH.

Does Cozy provide this deposit by ACH feature? If so it is dangerous.

Anthony Wick · Answer

They all seem to be about the same. Cozy. PayPal. ACH. But I have a question to those worried the tenant will have your account info. You do realize that your routing number and account number has been printed on checks for decades, right?

Lisa W. · Answer

@Mike H, what Cozy date do you use to determine if the tenant 'submitted' by the 4th?  The "in progress" date?

John T. · Answer

Thanks Mike!  Many good points and you're so right  - I won't be able to tell who's who with 8+ tenants.  Come to think of it, I've been lucky so far because both of my tenants have different banks and that's how I've been telling them apart.  I definitely need to rethink my system and switch over to one of these services.  Thanks again for the insight.

John T. · Answer

Thanks, Sean.  I didn't even consider that side of it - stopping payments.  Right now, I don't think I have control over tenants depositing money, and that would become a problem during an eviction.  Although, not being able to stop tenants from depositing money is a good problem to have haha.  Thanks for the insight.

John T. · Answer

Interesting.  Can you make the deposits online or is this at the branch itself?  Do both parties need a BoA account?  Thanks!

Rent Payment via ACH transfer downside?

Most Popular Reply