Collecting Rent Online

32 Replies

Hello All!

I'm about to close on my first deal. I found an owner-financed 8 unit, and we're writing up the contract this week. 

As the property is about to change hands, I've started thinking about how I'm going to collect rents. BP has a great article on this:

https://www.biggerpockets.com/rei/pay-rent-online-...

But the problem is, everyone I reach out to (I've only tried two so far) has said they have a minimum of 100-500ish units. I'm going to have 8. What do you recommend? 

Collecting rent online is truly the only way to go, it is what your tenants want and what you ultimately want to save time and money. I would go to your local bank that you are with and I would what your best options are. I am sure they will have some programs

I haven't bought my first rental yet, but I'm close and once I do I'll strongly prefer online payment and I a majority of tenant would too. I think on-time rent payments would occur at a higher rate through online pay.

There has been a few threads about this recently but I currently use Cozy.co and have been really happy with their service. They also are adding on additional features such as estimated rents and maintenance requests from the tenants in their suite. I suggest you check them out.

I use Cash App but the most current payments I get with Tenants who go to my bank and deposit cash into my account. I do give them my bank name and account number though, which plenty of landlords don't like.

Cash App deposit for free in 1-2 business days which lead to late fees (mine are after third of the month). 

Unfortunately, bank won't take their money if they don't know the account number, so I put it in the lease.

There are some tenants who even mail checks! Ohh, well :)

I just started using buildium for managing properties, leasing, and tracking financials. It is a great tool and they also have additional added services such as online rent collection, inspections, tenant screening, etc. Since I don’t manage many units the added cost of their rent collection service was not worth it for me so I use cozy.co I like the cozy service as it is free and you have visibility to scheduled and completed payments on the website. The only downside of cozy is that it takes a bit longer for payments to transfer. If a tenant pays on 1st you won’t likely receive until 7th.

So based on responses, it seems like it's between cozy and venmo... Venmo is a PayPal app on the phone, and I'm not too familiar with Cozi. Anyone able to compare these two?

One more vote for Cozy.co. Very low maintenance and they are free.

There is a 3-5 day delay from when the money leaves the tenant until it ends up in your account but that isn't really noticeable as you get your money every 30 days.

I also love not having to deal with the " I forgots" and "the check is in the mail"

We started out with 8 units and selected Buildium for both online rent pay, screening, and accounting capabilities.

If you use one of those online rent collecting companies, how do you know it won't go under or have all those problems like what we saw with erentpayment?

https://www.biggerpockets.com/forums/52/topics/499696-beware-of-fraud-by-erentpaymentcom

I use tenantcloud. 9 bucks a month for online payments for you, free for tenants, and a bunch of other stuff. It is a full property management cloud based software though. I enjoy it. 

I use Cozy.co and have used them for a couple years. I started with one property and slowly moved several other over to them. The service is free and they continue to add features. They are perfect for a smaller landlord. 

@Dana R. just because some people had problems with one electronic rent payment company hardly means that all electronic payment is bad. I have been paying bills electronically for over 20 years, I would hardly go back to paper at this point. To my understanding, eRentpayment didn't go under. They changed ACH processors and there were issues during the transition. The eRentpayment website is up and running and the service claims to have been in business since 2004. I am not affiliated with eRentpayment or Cozy. 

Originally posted by @Kevin Mosier :

Hello All!

I'm about to close on my first deal. I found an owner-financed 8 unit, and we're writing up the contract this week. 

As the property is about to change hands, I've started thinking about how I'm going to collect rents. BP has a great article on this:

https://www.biggerpockets.com/rei/pay-rent-online-...

But the problem is, everyone I reach out to (I've only tried two so far) has said they have a minimum of 100-500ish units. I'm going to have 8. What do you recommend? 

  I use "ClearNow" for online rent collection and I started with one tenant, and now I have two. The monthly fee is $14.95, plus a $2.00 fee per check collected. So far it worked well. So I don't understand the part about 100-500'ish units. Believe ClearNow is the 1st online payment servicer listed in the article.

As to the fees, here in NYC where I am, rents are high, and charge $2,500 for my SFH, and other units. If I'm bothered by the fees, I can have easily charge $25.00 more per unit. The advantage to online payments is we don't have to make numerous trips to the bank. I had a stroke some time back, and my wife was sick for several months this past winter so it was a great help.

Compared to other payment methods like Venmo, which my daughter use extensively, the money is taken out if the tenant's checking accounts on the 1st, I don't have to depend on them making the payment "when they get paid".

Another vote for cozy.co -- the tenants can choose if they want their good rental payment history to be reported to Experian which is a value add for younger tenants that may not have much credit history. Also I can send out one time payment requests to my tenants.  This is handy when dividing up the utility bills in the property I am house hacking or when one of my tenants wanted to rent my parking spot but only for one month or if you need to collect a late fee.  Cozy is very flexible and you can keep track of which tenant has paid and when.  You can't really do that with venmo if all your other venmo transactions are mixed in with your tenant's payments. I suppose if you only have one or two tenants venmo would work but I have 12 tenants that I self-manage right now so cozy is the way to go for me.