What is your favorite way to accept rent from tenants?

165 Replies

What payment method do you all prefer when it comes to accepting rent? I’m looking for something easy, organized, and hopefully automated.

Cash in an envelope, a thick sheaf of well-used bills given in return for a handwritten receipt. No, it won't scale, and it's no fun to deposit, but the firm, full, heavy feel of the envelope in my hand...oh yeah, it just does something for me...

@Jim K. Really? That’s the first time I’ve heard of someone using cash. Love it.

One year of post dated checks in advance. I like the control it gives me and when good tenants ask for a delay in paying I just hold the check. It is also possible to provide the checks to some banks and they will auto deposit them on the first of each month.

I personally do not like electronic payment system as they can be open to abuse by tenants. I do not  operate my business on the internet. I prefer old school but I am fully aware that is far too much work for todays arm chair investors.

Originally posted by @Thomas S. :

One year of post dated checks in advance. I like the control it gives me and when good tenants ask for a delay in paying I just hold the check. It is also possible to provide the checks to some banks and they will auto deposit them on the first of each month.

I personally do not like electronic payment system as they can be open to abuse by tenants. I do not  operate my business on the internet. I prefer old school but I am fully aware that is far too much work for todays arm chair investors.

one issue in the US in many markets a significant amount of tenants do not have checking accounts and never will.. either they are un trusting of banks or bounced too many checks.. in the US bank system if your a habitual bouncer of checks your SSN will get flagged and you will no longer be able to open a checking account.. 

that's why buying money orders is so popular in the US>. 

I had a client back in the day I sold a big 1,200 acre trophy ranch to in northern CA.. ( which yes has had one of the fires go through it this summer).. anyway he was a big landlord in Alameda 160 doors.. and that in today market is probably 100 mil or more in real estate and it was all free and clear.. ( why I like free and clear )  and he paid cash for the ranch.

BUT the moral of the story is he collected rent personally twice a month.. tenants were trained like Thomas trains his.. rent is to be in an envelope on pinned to the front door on one of those days.. no rent he then posted a 3 day notice.. so it was one or the other 3 day notice or collect the rent.. the front doors looked like pin cushions.  

@Jess White some people use cash to avoid taxes. As simple as is...

I let my managers collect the rent for me.

Most properties no longer take cheque or cash. Paypal, Apple Pay, Square,  Zelle. No more chickens, eggs anymore....

I have always used cash or checks in the past, but now I use Cozy.co and enjoy it for the most part, BUT, I did have a tenant claim online fraud and Cozy pulled the tenants deposit from my account 15 days after it was paid. This was very disheartening because by the time I figured out what was going on and spoke to the tenant , he was almost a full month behind. This resulted in two months late by the time I evicted. If I had only taken cash or a check I would still have the money. 

Jay I know some don't have checking accounts and never will. Some applicants have indicated that paying by check will be a problem for that reason.  I have discovered they generally don't have bank accounts due to past questionable behaviour.  I use this as one of my screen tools and don't rent to anyone without a bank account. Not because they can't provide checks but because they do not measure up to my standards of reliability. Now if it's because they do not trust banks I have to question what other idiosyncrasies they may have. Do they also wear tin foil hats or believe the moon landing was a government hoax. 

I could easily accept money orders but that relies on tenants getting rent payment to me prior to the first each month. Since I consider the calibre of a tenant that does not have a bank account as being of lower quality I assume they will not be reliable with paying rent on time. Pass.  

I haven't used it but there's something called "Pay Near Me"  It lets people pay at a few retail locations.  There is also Pay Lease that has cards or website integration.  Both charge a small fee that's paid by the customer.

I have a business bank account with my local bank for my property management LLC. I let tenants choose to mail me a check/MO/cashiers check to my UPS box made out to my LLC. Or I will give them deposit slips for my bank that they can deposit in person at the bank. My leases all say check physically in the UPS box on the first, but if the tenant wants too I'll give em the deposit slips. So far I've been doing this for over 12 mo with 3 properties and it works fine. They can go to the bank and deposit pennies for all I care. Yes, they have my LLC account number from the slips. But for those of you who haven't noticed, it seems like the only thing harder than getting a check cashed is getting money OUT of your OWN business bank account.... ;-) .

In the old days (40 to 50 years ago), my father's favorite way to get paid the rent was "any way he could get it".

For some tenants, we used to knock on doors every Friday or Saturday and get paid cash.

I remember one time, before I started driving, my father was in the hospital and I had to ride all over town on my bike and collect rent. I was a 14 year old kid, on my bike, with about $1000 cash in my pocket.

Times have changed.

@Jess White I prefer Cash app or any other direct deposit type app. However, it depends what kind of tenants you have. Some tenants won't have access to direct deposit so they would have to either give cash or check.

We give tenants options, but those options also make things easier on us:

1. They can pay through our website.

2. They give us permission to run their payment on a card on the 1st business day of the month.

3. We have "RENT" slot on the front of our building if tenants want to drop off a check

I believe the key to rent payments is to tell tenants when you are screening how they are expected to pay. It is best to not give them options. A condition of the lease is that they pay by the method you choose.

Tenants are responsible for having rent payment to the landlord or in their account by midnight on the day rent is due. Anything later is considered as late.

What no landlord should ever do is chase tenants around and pick up their rent payments. That is a extremely poor business practice that places the tenant in control and the landlord at their beck and call begging for money.

I can guess the excuse landlords use for doing it...... T C O T P … and it BS.

@Jess White I require tenants to have the funds deposited into an account and cleared by the 1st of each month as agreed in the lease. I let them decide how it gets there, my only concern is that it is there and cleared.
@Jess White I like Venmo, Cash app and PayPal. Of the 3, I find Venmo the easiest. I have a lot of young tenants and this seems easy for them as well
@Jess White Venmo and ApplePay have been working well so far for my tenants.
@Jess White Cozy.co is my vote. It takes about 5 days to deposit but it is free. They also have pretty good screening tools paid for by applicant.

@Jess White I have dulexes where the tenants are younger and they pay by auto pay. In my apartment, a 12 unit building, the tenants deposit checks into a lock box in the laundry area. I visit the property once a month to collect check and coins from the washer and dryer, and fondle my asset. ;<)

I use ACH. I set it up so that rent automatically draws from tenants accounts on the day I choose.  

As part of the lease tenants agree to this and it is GREAT

It allows me to be in complete control.  Tenants love it as they dont have to do anything or remember rent etc. win/win!!

My favorite way to accept payments of any kind is cash. No charge backs, no bouncing. But since I don't go pick it up, and don't give tenants my address, it doesn't work too well. So my fallback is Cozy.

I like Cozy very much, but hit a snag a couple of months ago. As others have said, it usually takes about 5 days for a Cozy payment to hit my bank account, but one month the tenant paid by credit card and it was in my account the next day. Great, right? Well......

2 months later I got a notice from Cozy that the charge was disputed and they withdrew the funds from my account.

I gave the tenant a 3 day pay or quit notice the next day, and let the tenant know that I was NOT happy. They had the funds to us the following day and explained that it was Mom's credit card and there was a misunderstanding. Uh huh.

The point is, receiving payments through any of these online payment processors who allow payment by credit card makes you vulnerable to a charge back. If the charge is disputed the money is immediately removed from your account and it is up to you to prove that the charge is legit. Good luck with that.

I have used ClearNow for the last few years and I love it. I have 8 tenants total and they all opted in. ClearNow payments will impact help them improve their credit score and it only costs me $30 or so per month. The tenant's payments go to ClearNow on the 3rd and are credited to my LLC account on the 8th. I never have to go to the buildings to pick up checks and I love that! If I am looking to sell any of the buildings I have proof of rents and payments at my fingertips.

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