Rental Property Investor · San Diego, CA · Member since 2017 · 60 posts · 29 votes
I just acquired a 4-plex today. I currently have 18 units, and will have another 4 here within the month. As crazy as it might seem to many, I self manage from out of state. I have a reliable maintenance team and listing agent, and historically handle leases and rental payments electronically. This post is not about that, so please no comments on my decision to self manage.
However, one of my tenants does not have an e-mail or a bank account. I inherited this tenant...not my first choice. The prior landlord allowed cash payments, and he never missed a single payment in over a year. I do not allow cash payments. Being out of state, it doesn't work with my business model.
The options I have considered:
My thoughts are that the tenant gets a money order every month and physically mails it to me.
The tenant directly deposits into my account at the bank (is there a way to do this without disclosing my account number?)
I see services that allow the tenant to deposit cash at a local Walmart, but everyone of these services is a separate product that I would have to license or enroll in. I don't want to manage a separate system for one tenant.
Does anyone have any suggestions of what works for them? Thank you very much for your help!!!
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Your account number really isn't that big of a security concern.... If you've ever written a check, your acct number was there for all to see.
But like said, chase and other banks are starting to cut back on letting anyone put cash into an account.
Depending how your set up, this could work? Doubt it'd work for 1 person though... https://www.biggerpockets.com/forums/52/topics/108305-using-paynearme-for-rent
Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
8y
@Edward Burke I like the idea about the money order. There doesnt seem to be any reason the tenant cant go and buy a money order and mail it to you. Thats seems to be the easiest method. If they are physically not able then they have someone who helps them grocery shop etc.. So there you have it. Also you will notice I didnt comment on your decision to self manage
Rental Property Investor · Littleton, CO · Member since 2017 · 61 posts · 18 votes
8y
When we had a friend renting our out of state house, we had him deposit his rent directly into our account. He has been one of Matt's best friends for almost 30 years though, so we weren't at all concerned with him possibly getting information about our account and It was a small local credit union. Check with your bank for notes/holds you can put on the account to prohibit information like account numbers and balances being given out to see if they have any options that would work for a direct deposit. Otherwise the money order seems like a good idea too.
Rental Property Investor · San Diego, CA · Member since 2017 · 60 posts · 29 votes
8y
@Alex Deacon - Thanks...I do think the Money order might be best. I was also going to ask my bank about adding another checking account (a sub account to my primary) that carries no fees. I would give him access to the account number as I would transfer the money out of it right away, and would make sure that it didn't allow overdraft.
@Kevin Manz - Thanks for the compliment! :) P.S. I use cozy and love it. That's why I am not a fan of this cash situation.
@Jennifer Delmore - I like the idea about meeting with the bank. See above for my latest thinking on the matter. Like you said, perhaps the bank can help.
Rental Property Investor · San Diego, CA · Member since 2017 · 60 posts · 29 votes
8y
@Alex Deacon - It seems that the self managing topic on BP is about as polarizing as politics and religion, so I try to avoid it. :) Thanks for not commenting. Lol!
Investor · River City, Manitoba · Member since 2017 · 162 posts · 193 votes
8y
Talk to your banking institution... I just arranged my bank to set up a direct deposit system with one of my tenants. The banks will do the paperwork. Basically my bank will take the funds directly from my tenants bank account on the agreed upon date. It's super easy and convenient!
Lees summit, MO · Member since 2013 · 32 posts · 25 votes
8y
Banks are starting to not allowing people to deposit cash anymore into other peoples accounts unless they are on the account now. This is to help protect against money laundering. But direct deposit or something into a business account is still an option or money order but risky of a fake one and you getting stuck with the charges.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Your account number really isn't that big of a security concern.... If you've ever written a check, your acct number was there for all to see.
But like said, chase and other banks are starting to cut back on letting anyone put cash into an account.
Depending how your set up, this could work? Doubt it'd work for 1 person though... https://www.biggerpockets.com/forums/52/topics/108305-using-paynearme-for-rent
Rental Property Investor · San Diego, CA · Member since 2017 · 60 posts · 29 votes
8y
@Steve S. - Believe it or not, I don't think the tenant has a bank account...I know, crazy.
@Jesse Moran - I forgot about them! I had looked into it a while ago before I had an LLC (a EIN is required), and it wasn't allowed. That is no longer an issue! I will look into that again...good advice.
Rental Property Investor · San Diego, CA · Member since 2017 · 60 posts · 29 votes
8y
Thanks everyone for the help. I think Paynearme is the option that works best with my business model. I assume this won't be the first time I encounter this, and perhaps it's nice to offer tenants this option.
Rockaway, NJ · Member since 2016 · 2k+ posts · 2k+ votes
8y
Several options are available. In addition to money orders, he can utilize money transfer services like Western Union, Money Gram, and Walmart-Walmart Transfer. Of course, these require you to physically pick up the money. Also, you can ask your bank about a deposit only account/atm card. If your bank will not offer this, call a bank that happens to be in his and your area. I have also heard of a service called PayNearMe, that allows him to bring cash to local stores, I think 7-11, maybe others, then they send it to you.
Rental Property Investor · San Diego, CA · Member since 2017 · 60 posts · 29 votes
8y
@Andrew B. - A deposit only account sounds appealing....I will have to look into that as well. Just when I thought paynearme was the for sure answer. :)
@Andrew B. - A deposit only account sounds appealing....I will have to look into that as well. Just when I thought paynearme was the for sure answer. :)
I have never used one, but I have heard some banks will give you the option to give tenant an ATM card, that only gives access to deposit into the account. Not sure what abnks if any offer tho.
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
8y
We use buildium property managment software which allows tenants to set up online rent payment via ACH. When tenants don't have email or internet (we have a number of tenants in their seventies and eighties) we have them sign a permission form and then we set up the ACH for them.
Richmond, VA · Member since 2018 · 18 posts · 22 votes
8y
Not to sound unsympathetic, but you're providing a good (a home) that your tenant is paying for. I think most would agree that using an email address + bank is a reasonable expectation for pretty much any transaction in 2018, much less one with such a high value.
I suggest that you should seriously consider either forcing the tenant to adapt to your online management (given that you aren't asking doing anything unreasonable with the rest of your tenants which I presume you aren't) or increase their rent as you see fit to pay for whatever inconveniences you're taking on to accommodate the tenant.
You may have inherited the tenant in this "state", but unless some agreement was written into the lease prior, I personally wouldn't see that to be enough reason for you to go through so much trouble.
With that being said, I believe 100% in going above and beyond for my tenants and if you feel that this is makes sense for maintaining the brand of your landlord business, I say go for it and good luck!
Property Manager · Gilbert, AZ · Member since 2009 · 1k+ posts · 451 votes
8y
Many times I have told inherited tenants that I don't take cash and I'm not coming to pick it up. Get a money order and mail it to this address, be sure to mail it a couple days early because it needs to be in my office by the 1st.
We use buildium property managment software which allows tenants to set up online rent payment via ACH. When tenants don't have email or internet (we have a number of tenants in their seventies and eighties) we have them sign a permission form and then we set up the ACH for them.
We use buildium property managment software which allows tenants to set up online rent payment via ACH. When tenants don't have email or internet (we have a number of tenants in their seventies and eighties) we have them sign a permission form and then we set up the ACH for them.
Don't you need a bank account to use ACH....
No! They can get one of those green dot cards at Walmart or a convenience store and put money on it.
I have employees with no bank accounts and we can even direct deposit the pay to their card.
Many times I have told inherited tenants that I don't take cash and I'm not coming to pick it up. Get a money order and mail it to this address, be sure to mail it a couple days early because it needs to be in my office by the 1st.
My landlord accepts personal checks, but not cash. Once a personal check bounces, money orders are required from then on. There is also an online payment system that charges a small convenience fee.
Rent is due by the first and late by the fourth (no exceptions for holidays). The leasing office has a dropbox for after-hours rent payments.
Rental Property Investor · Edison, NJ · Member since 2016 · 753 posts · 565 votes
8y
I would ask him or her to send you a money order until your lease expires. Once the lease is up for renewal I would inform the tenant you only accept rent at Cozy and they will figure out a way to do it if they want to stay. Most people whom are not tech savvy know someone whom has at least a rudimentary knowledge and can set up an email for them.