Anyone have their tenants using "Bill Pay" to electronically pay rent?

11 Replies

My tenant recently requested my bank info so he can do an electronic rent payment. I'm guessing he will need my routing number / account number. I'm hesitant to give it out without first consulting here. Anyone know the pro's & potential con's of this?

Thanks,
Mark

I pay some owners this way. They usually set up a deposit only account. Once the money hits the account, it's automatically transferred to their account.

The benefit of this is your tenants don't get your actual account number, in case they do decide to get froggy.

What Marc said...set up a set of "transfer accounts" that carry no yield.

If you do enough business with the bank and they are small their treasury management department can set you up with some ZBA accounts that automatically sweep to an operations account or an account you set up solely for that project. This is nice if your accountant tracks your credits and debits online and they can be given read only access to do so.

These accounts carry large fees so you generally need to get those waived or to carry enough in deposits to offset the cost of the accounts.

There are potential pit falls to using "direct" deposit accounts.

For example, one of my clients recently had a tenant who was on direct deposit. Made the monthly rent payment, gave her notice to vacate, went to the bank and reversed the direct deposit and there was nothing this client could do. In fact, she was told that the tenant could have requested the reversal of up to 6 months payments and there was nothing she (my client) could have done to stop the reversal.

I have never been fond of this approach... although it can be a great time saver... I guess I am just old fashion.

I want to see the checks/money orders come in the mail every month.

Best of luck!

Thanks so much everyone! I'm going to look into transfer accounts.

I figured giving the info out wasn't the smartest move, but they could always get the same info off their return SD deposit. So if I'm writing checks for that I'm no safer than just doing ACH anyway... Do you use separate accounts for making SD returns & payments etc?

@Mark Updegraff  

One of my Tenants pays through Chase Bank Quick Pay.  She doesn't have to have my account or anything.  I believe she set it up on her side with just my email address.

At the first of the month she makes the payment to me.  I get an email that a payment is waiting.  I hit the link in the email and it takes me to the site were I approve the payment and the money is sent to my Bank of America account.

All that was required of me was to setup my transfer account number (my BofA ACH and account#) and verify a small transaction amount.  The funds show up in my account in just 3 business days and my tenant never needed to know my bank information.

This works out well for me as I am actually working out of the country and no in person paper transactions are required. 

@Mark Updegraff
I agree with @Peter Giardini
It's too easy for someone to do that if they're dishonest who has all that information
Have you looked at third party rent collecting services there's a list here on BP
Pay near me for cash tenants and other online ach services

http://www.biggerpockets.com/rei/pay-rent-online-payment-tools/

Hth

As a tenant/rent payer now, I do prefer to e-pay my landlord to save the direct contact and for convenience. Plus we live in different states. Bill Pay is a good way to set up with your online banking, however, they don't need your routing or account number. All they should need is your name and email address that's linked to your online banking account. I know Chase has system like this, BOA also and a few others. Nowadays people use PayPall, or even Facebook Messenger to set up automatic incurring money request. There are so many creative way of collecting money. And they all have some sort of security. But make sure you do your bookkeeping and stay organized. Hope it's helpful for the folks out there.

Best,

Lin

All banks now have Bill pay you only need to have their email or set one up just for bill pay I created an email just for receiving  and this account is sweep into operating account at end of each day. ACH is much cheaper then using Paypal or a Credit Card like in Tenant cloud.  

I know this is an old thread, but what the hey. I've been paying my rent through my bank for about a year now. I set it up to be automatic. My bank sends out a check to my land lord. All I needed was my land lord's name and address. It's just as if I were sending the check. The difference is I don't pay for stamps or envelops or checks.  Now if I could only get my tenant to do this! (Yes, I rent and have a rental.)

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