Giving your routing & account number to tenant
Most Popular Reply
Salt Lake City, UT · Member since 2016 · 199 posts · 190 votes
7yYes, I would. You given this information to every person you have ever written a check to, so why not your tenant to make collecting rent easier.
21 Replies
- Salt Lake City, UT · Member since 2016 · 199 posts · 190 votes7y
Yes, I would. You given this information to every person you have ever written a check to, so why not your tenant to make collecting rent easier.
- Rental Property Investor · Edmond, OK · Member since 2017 · 1k+ posts · 1k+ votes7y
Not your main account info. :)
I know of people that will create a separate bank account just for this purpose. Tenant deposits rent, landlord transfers rent to a different account and then the bank account that tenant has access to sits with minimal cash in there until they deposit their next rent check.
I prefer to use an online service like cozy.co to handle this, but I know that doesn't work for everyone.
- Rental Property Investor · NJ · Member since 2019 · 442 posts · 40 votes7y
Originally posted by @Anthony Hurlburt:
Yes, I would. You given this information to every person you have ever written a check to, so why not your tenant to make collecting rent easier.
I just know a lot of people hesitate to give it out, so I was wondering why. (In fact, anyone can use your account info. To pay their credit cards etc. Over the phone, and I was wonder how I can protect myself) - Rental Property Investor · Huntsville, AL · Member since 2013 · 419 posts · 323 votes7yFor an account specifically for this tenant and this tenant alone, yes. My bank allows me to create and remove accounts(non-primary) online. Hell, I don't even have to provide the account number, if I name the accounts uniquely, the tenant can just use the name.
- Rental Property Investor · NJ · Member since 2019 · 442 posts · 40 votes7y
Originally posted by @Cassi Justiz:
Not your main account info. :)
I know of people that will create a separate bank account just for this purpose. Tenant deposits rent, landlord transfers rent to a different account and then the bank account that tenant has access to sits with minimal cash in there until they deposit their next rent check.
I prefer to use an online service like cozy.co to handle this, but I know that doesn't work for everyone.
But Anthony Hurlburt has a good point... all checks have it on them?! - Rental Property Investor · New Braunfels, TX · Member since 2018 · 141 posts · 103 votes7y
@Sami Gren
Yes, give it to them, I require all my tenants to direct deposit rent directly into my account. I have a separate account for each property which makes it easy to see who has or has not paid on time.
- Durham, NC · Member since 2014 · 104 posts · 68 votes7yYep, about half my tenants have it. And it’s my main account!
- Rental Property Investor · NJ · Member since 2019 · 442 posts · 40 votes7y
Originally posted by @Aaron Smith:
Yep, about half my tenants have it. And it’s my main account!
nothing to be worried about? - Member since 2018 · 47 posts · 25 votes7y
i called the bank and went to two different branches and they strongly advised me not to give them the account info to direct deposit. they said they could use my info to do bad things. i even asked the same thing about having a separate account for each tenant. still bad they said. i dont get it but whatever im just saying what they told me.
- Fort Collins, CO · Member since 2019 · 185 posts · 61 votes7y
@Sami Gren Probably not. I would recommend going through a third party, such as Venmo, that will let you yourself transfer the money into your personal account. Even with tenant screening, you have no idea what someone could do with your account information! Better to be safe than sorry.
- Philadelphia, PA · Member since 2019 · 174 posts · 124 votes7y
When you return the tenant's security deposit will you do it by check? If so, you have just given them your account number and bank routing number. It's part of the check. right there on the bottom. If you would give it to a tenant that is leaving your unit, why not give it to a tenant who is currently renting to make paying you easier?
A lot of banks now allow ACH transactions if you have the account and routing numbers for another bank account. My tenant's all have my account information. That account has a $50 balance it in. All other payments into the account are moved out the end of that day. The bank I use has instant transfers into other accounts I have at that bank. So the end of each day the money moves out of the checking "Payments" account into my "Operations" account at the same bank (well, technically credit union). Easy peasy.
- Investor · Tempe, AZ · Member since 2018 · 1k+ posts · 731 votes7y
Hi @Sami Gren, great question.
As address above, any check you write will have your routing and account number on it. So it's quasi-public info anytime you write a check.
If you have hesitations then there are other ways to resolve this. 3rd party providers will utilize ACH which allows tenants to directly deposit rent into your bank account, without sharing each others information. Plus it's an easier process for both parties!
- Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes7y
Originally posted by @Tyler Labelle:
i called the bank and went to two different branches and they strongly advised me not to give them the account info to direct deposit. they said they could use my info to do bad things. i even asked the same thing about having a separate account for each tenant. still bad they said. i dont get it but whatever im just saying what they told me.
I have been using this technique for multiple properties for several years without any problem, ever. Is your bank saying they don't have good security at their institution? What do they say is "bad" about giving out your account number? As others have correctly stated, this is not secret information. It might be time to go looking for a more business-friendly bank.
If someone has your account number, they MAY NOT withdraw from your account (unless your bank does not have any security measures in place).
I have a separate bank account for each building that tenants deposit into each month and I typically have a large balance in them to pay taxes, debt service and other monthly expenses, and I don't have any worries about those accounts being drained by some unscrupulous tenant. If that happened, I would hold the bank responsible for not checking that person's photo ID and not asking for my "lock" password. My bank has an image of my photo ID and it comes up on the teller's screen when one of my accounts is accessed. I've also made it a point to be personally known by the staff at the branch in my portfolio's city.
I can tell you from anecdotal evidence from branch management, there are at least several other landlords that have a similar system set up at my banking institution.
Bank-to-bank WITHDRAWALS from my accounts are not allowed unless the bank account receiving the funds is "officially" linked to mine, which is something I would have to set up with the bank by filling out paperwork at a branch. Other outside accounts can deposit money in without issue, which is essentially what we all do when we pay bills online. Is your credit card company freaking out that you have an account number of theirs to which you deposit money? I can assure you their cash balance is much larger than any of us, probably combined.
It's a fair and prudent question for you to ask, and I can understand some people prefer not to use that kind of system in their business, but unless someone can identify a specific vulnerability that does not involve teller negligence, I don't think you have to worry. At least I don't, and I am predisposed to worrying.
- Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes7y
Originally posted by @Wesley W.:
Originally posted by @Tyler Labelle:
i called the bank and went to two different branches and they strongly advised me not to give them the account info to direct deposit. they said they could use my info to do bad things. i even asked the same thing about having a separate account for each tenant. still bad they said. i dont get it but whatever im just saying what they told me.
I have been using this technique for multiple properties for several years without any problem, ever. Is your bank saying they don't have good security at their institution? What do they say is "bad" about giving out your account number? As others have correctly stated, this is not secret information. It might be time to go looking for a more business-friendly bank.
If someone has your account number, they MAY NOT withdraw from your account (unless your bank does not have any security measures in place).
I have a separate bank account for each building that tenants deposit into each month and I typically have a large balance in them to pay taxes, debt service and other monthly expenses, and I don't have any worries about those accounts being drained by some unscrupulous tenant. If that happened, I would hold the bank responsible for not checking that person's photo ID and not asking for my "lock" password. My bank has an image of my photo ID and it comes up on the teller's screen when one of my accounts is accessed. I've also made it a point to be personally known by the staff at the branch in my portfolio's city.
I can tell you from anecdotal evidence from branch management, there are at least several other landlords that have a similar system set up at my banking institution.
Bank-to-bank WITHDRAWALS from my accounts are not allowed unless the bank account receiving the funds is "officially" linked to mine, which is something I would have to set up with the bank by filling out paperwork at a branch. Other outside accounts can deposit money in without issue, which is essentially what we all do when we pay bills online. Is your credit card company freaking out that you have an account number of theirs to which you deposit money? I can assure you their cash balance is much larger than any of us, probably combined.
It's a fair and prudent question for you to ask, and I can understand some people prefer not to use that kind of system in their business, but unless someone can identify a specific vulnerability that does not involve teller negligence, I don't think you have to worry. At least I don't, and I am predisposed to worrying.
The main problem is that now many creditors allow bills to be paid by phone using a checking account; so given a routing number and account number, any bill can be paid by phone. The creditors accepting such payments aren't asking for the name on the creditor's account to match the name of the checking account - otherwise, you couldn't be a nice guy and pay for your brother's or son's mortgage when he is short on funds ;) Then, once you receive your checking statement and see the bogus check by phone on your statement, you get to dispute that fraudulent transaction that you did not originate - but the funds were missing from your account in the meantime.
- Member since 2019 · 19 posts · 5 votes7y
Originally posted by @Sami Gren:
Would you give your routing and account number of your bank account to your tenants, so they can deposit their rent straight into your bank account?
With Navy Fed you can direct deposit with only a name and email, do not know what bank you use but maybe they have a similar setup. There is also a lot of money transfer aps like venmo.
- Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes7y
Originally posted by @Steve Babiak:
Originally posted by @Wesley W.:
Originally posted by @Tyler Labelle:
i called the bank and went to two different branches and they strongly advised me not to give them the account info to direct deposit. they said they could use my info to do bad things. i even asked the same thing about having a separate account for each tenant. still bad they said. i dont get it but whatever im just saying what they told me.
I have been using this technique for multiple properties for several years without any problem, ever. Is your bank saying they don't have good security at their institution? What do they say is "bad" about giving out your account number? As others have correctly stated, this is not secret information. It might be time to go looking for a more business-friendly bank.
If someone has your account number, they MAY NOT withdraw from your account (unless your bank does not have any security measures in place).
I have a separate bank account for each building that tenants deposit into each month and I typically have a large balance in them to pay taxes, debt service and other monthly expenses, and I don't have any worries about those accounts being drained by some unscrupulous tenant. If that happened, I would hold the bank responsible for not checking that person's photo ID and not asking for my "lock" password. My bank has an image of my photo ID and it comes up on the teller's screen when one of my accounts is accessed. I've also made it a point to be personally known by the staff at the branch in my portfolio's city.
I can tell you from anecdotal evidence from branch management, there are at least several other landlords that have a similar system set up at my banking institution.
Bank-to-bank WITHDRAWALS from my accounts are not allowed unless the bank account receiving the funds is "officially" linked to mine, which is something I would have to set up with the bank by filling out paperwork at a branch. Other outside accounts can deposit money in without issue, which is essentially what we all do when we pay bills online. Is your credit card company freaking out that you have an account number of theirs to which you deposit money? I can assure you their cash balance is much larger than any of us, probably combined.
It's a fair and prudent question for you to ask, and I can understand some people prefer not to use that kind of system in their business, but unless someone can identify a specific vulnerability that does not involve teller negligence, I don't think you have to worry. At least I don't, and I am predisposed to worrying.
The main problem is that now many creditors allow bills to be paid by phone using a checking account; so given a routing number and account number, any bill can be paid by phone. The creditors accepting such payments aren't asking for the name on the creditor's account to match the name of the checking account - otherwise, you couldn't be a nice guy and pay for your brother's or son's mortgage when he is short on funds ;) Then, once you receive your checking statement and see the bogus check by phone on your statement, you get to dispute that fraudulent transaction that you did not originate - but the funds were missing from your account in the meantime.
The only situation where I've seen that occur is a company with which you have established a relationship with and a typically recurring charge. Pretty easy for law enforcement to connect the dots on that, and I am pretty certain that is a crime (check fraud?). In this unlikely situation where someone is brazen enough to do that, they get charged, and the transaction is unwound and I am made whole.
I'd be interested to know anecdotally of anyone on the forum that had something like this happen. I'd be very surprised, but would be interested to know.
So, how long have you stopped issuing paper checks to pay people (business or personal, for that matter), since that has the very same information on it? Not every person I need to pay has the capability to be paid via credit card. I'll assume you have the same situation.
- Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes7y
@Wesley W. - I still use checks, and the checks I receive from tenants will have my account info with the endorsement. Any creditor that accepts payments by phone could potentially receive payment via a fraudulent check, not just one where you have a relationship (and it's a creditor the thief owes, so it could be some creditor totally unfamiliar to you). And yes it's a crime and the perpetrator would be readily identifiable I guess. Would still have the potential to cause the unwitting account owner to get overdrawn. I can't say that this has happened, I am just pointing out where there is a potential for abuse.
- Philadelphia, PA · Member since 2019 · 174 posts · 124 votes7y
Originally posted by @Steve Babiak:
@Wesley W. - I still use checks, and the checks I receive from tenants will have my account info with the endorsement. Any creditor that accepts payments by phone could potentially receive payment via a fraudulent check, not just one where you have a relationship (and it's a creditor the thief owes, so it could be some creditor totally unfamiliar to you). And yes it's a crime and the perpetrator would be readily identifiable I guess. Would still have the potential to cause the unwitting account owner to get overdrawn. I can't say that this has happened, I am just pointing out where there is a potential for abuse.
If an account is overdrawn from a fraudulent transaction it will all get reversed. That's the great thing about actually using the banks for transactions and not 3rd party processors. The benefit is that a bank has a set timeframe they must complete the investigation and the bank is advocating for you, their customer. A 3rd party processor isn't a bank and doesn't have those set items. The law hasn't caught up yet and they are only governed by their good graces. That's why you get all the horror stories about Paypal taking peoples money after the goods/services were received. They're just a payment processor like many of the ones you here talked about on here. Oh, and if they accept credit cards as a payment for you, watch out. All the power lies with the credit card company and they advocate for their customer (the tenant).
- Leclaire, IA · Member since 2016 · 161 posts · 130 votes7y
@Sami Gren
I started doing this six months ago and I love it. I’m with a bank with a lot of locations which makes it easy for tenants. I have them text me a picture of the receipt for double confirmation. No more the check is in the mail excuse. Lastly, I don have to give up a percentage to some online service. There is no risk as other comments have shown because they can only deposit.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes7y
That information is readily available on every check you give out. It allows someone to deposit funds, not pull them out.
You should seriously consider Cozy or some other online payment system.
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