Accepting Deposit to Hold Via Venmo -- Is it a bad idea?

[Christopher Freeman]

Howdy all,

We're trying to iron out a kink in our new tenant onboarding process. We currently follow Brandon Turner's advice to require initial payments via cashier's check or money order. While we see the good reason behind a certified funds policy, we find that it is very clunky. Most of our accepted applicants are working adults and (especially in our somewhat rural area), expecting them to find time to get to a bank within banking hours and hand deliver a cashier's check seems burdensome.

My question is whether or not Venmo might be a viable alternative. It is my understanding that (unlike Paypal), Venmo can't reverse payments without consent from both parties, and the funds can only transfer if they exist.

What are people's thoughts on this practice?

--Chris

[Jonathan Taylor Smith]

@Christopher Freeman - I've not yet tried Venmo, but have accepted holding deposits via Cozy.co, which is also the system I use for the application and background screening. In so doing, I let the prospective tenant know that it is not official until the funds hit my bank account, which can be a few days - so I suggest instead that they deposit the funds directly into the account I have setup for this at any PNC Bank branch, since they have many locations in my area.

They must also sign (or eSign) a Holding Deposit Agreement, which details how and when / if the Holding Deposit will convert to a portion of their Security Deposit and when the remainder along with the first month's rent will be due. I then do require those final funds to be paid via certified check or money order.

It has not happened yet, but should those initial funds bounce or otherwise get returned, I've really not lost anything, as I do not de-list the rental until the lease is signed. In fact, I would consider it dodging a bullet.