How do you guys have your tenants pay rent?

Maple Grove, MN · Member since 2017 · 12 posts · 3 votes

Hey BP,

Im about to close on a 4-plex in NE Minneapolis (my first investment property) and I was wondering what people in the area do to collect rents. Even though I'll be living on the property and they technically could just drop it off to me I would rather have a system in place where they can pay it online (for when I move out in a year). Just wondering what any local people in the Minneapolis area use or what anybody nationwide would suggest. Thanks in advance!

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

Use online payments. Don't tell tenants there's the option of paying with check or cash or mailing payment to your bank. Tell them from the beginning that payments must be made through Cozy or whatever online system you use and then stick with it.

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Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
7y
@Colin Sweeney paying online is preferable. Never accept cash or personal checks. Only pay online or certified check/money order.
I have some tenants who pay online and others who pay with money orders in person. The in person ones are to my PM who then deposits the money directly into my account.
1 Reply
Jason D.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y
@Colin Sweeney my property manager collects online through buildium. The property I self manage I collect online through cozy
2 Reply
Tim SwierczekPro Member
Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
7y
@Colin Sweeney I highly recommend it is cozy.co you can collect rent online and there’s no fees to you or the tenant provided they pay with your bank account and you don’t choose the rush fee.
7 Reply
Jeff Schuler
Member since 2019 · 1 post · 2 votes
7y
I use Zelle. My tenants love it! The only downside is for the initial setup there is a $500 limit per day for the first month so just be sure to give them a heads up so they can accommodate. After that your good to go and they have record of it with notes for accounting purposes.
2 Reply
Bruce Runn
Investor · Minneapolis, MN · Member since 2014 · 743 posts · 927 votes
7y
We use buildium online software which is great
0 Reply
Sylvia B.
Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes
7y
I use Cozy for online payments, which I prefer, but I also accept checks and money orders by mail. When we had an office with regular business hours, we also accepted cash.
Security deposit and first month rent are always cash or money order.
0 Reply
Account Closed
Rental Property Investor · MN · Member since 2015 · 186 posts · 149 votes
7y
I use, and love Buildium
0 Reply
Bryan Tinajero
Real Estate Agent · St. Paul, MN · Member since 2016 · 44 posts · 23 votes
7y
I’ve used Cozy.co for the last couple of years and it’s worked great. It’s free for both you and tenants as long as you don’t expedite deposit. It also can setup for security deposit collection. Check it out to see if it fits your needs.
0 Reply
Allan Smith
Contractor · Nashville, TN · Member since 2014 · 1k+ posts · 1k+ votes
7y
if you just want to collect online, use cozy. It's free. Once you get some more units, use software that will save you time. Buildium has the most value if you are under 50 units ish.
If they dont have checking account, use paynearme to accept cash payments.
2 Reply
Alyssa StromBusiness Member
Real Estate Agent · Saint Paul, MN · Member since 2015 · 225 posts · 214 votes
7y
@Colin Sweeney Congrats on the 4-plex! My vote is also for Cozy. One of my colleagues also allows tenants to pay with Venmo.
1 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
7y
Use online payments. Don't tell tenants there's the option of paying with check or cash or mailing payment to your bank. Tell them from the beginning that payments must be made through Cozy or whatever online system you use and then stick with it.
The DIY Landlord Book4.7248 Reviews
Website View Page
9 Reply
Hideyuki Gojima
Rental Property Investor · Long Island City, NY · Member since 2018 · 82 posts · 18 votes
7y
@Colin Sweeney
If you are looking for only rent payment, cozy may be a good fit for you.
There are other softwares like rentpayment.com or clickpay. you may check them out too.
I use Cozy as a tenant and there is no problem.
Physical check may create unnecessary issues for bookkeeping and accounting so it is always better to collect rent through a software.
If you consider to use a property management, most of the property management softwares have the rent payment feature nowadays. Some property management softwares are built for large properties and you will have features that you will not really need. Find the one that fits your needs.
Good luck!
0 Reply
PJ M.
Philadelphia, PA · Member since 2019 · 174 posts · 124 votes
7y
My preferred method is via ACH transfer. After that I take checks, money orders, or if there has been an issue certified checks or cash.
One thing I avoid is any system that allows a tenant to use a credit card to pay. Any 3rd party processor that doesn't allow you to prevent credit cards from being used is too much of a risk.
0 Reply
Shannon Staff
Yucaipa, CA · Member since 2019 · 10 posts · 5 votes
7y
@Colin Sweeney We set up a business account with BOA and give each tenant deposit cards. They can deposit rent directly into the account through any ATM or BOA location.
3 Reply
Colin Sweeney
OP
Maple Grove, MN · Member since 2017 · 12 posts · 3 votes
7y
Thank you everybody for the info! Ill be checking into a few of these and see which one will do the trick!
0 Reply
Jordan Akins
Member since 2018 · 20 posts · 4 votes
7y
Just purchased my first rent house for $40k. It’s a small house with enough room on the lot to build 3 duplexes . I’m pretty confident with a couple days of work I can rent the house out for at least $500. It’s considered a one bed one bath but has a basement that can easily be made into a bedroom with a big closet/storage space. Also has a detached garage. Just wanted to get some opinions on what you all would do with the property as far as what you would build and so forth. Thanks!
1 Reply
Chad Duval
Rental Property Investor · Boston · Member since 2014 · 103 posts · 21 votes
7y
Through Cozy
0 Reply
Taylor Roeling
Fort Collins, CO · Member since 2019 · 185 posts · 61 votes
7y
@Colin Sweeney There are lots of different ways to pay rent - online is definitely easier, but it depends on the demographic of your tenant. Younger millennials will probably be more into Venmo or PayPal, whereas older generations might still prefer checks or cash - you will just have to preface the fact that you will be moving in a year and see what they would like to do! It shows you are respectful and also have good communication as a landlord.
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
7y
I do online rent payment through Cozy, which is essentially the same as checks, just electronically (ACH). Two of my tenants pay by physical checks. They are just older and seem more comfortable with it. In the past, I have collected cash from tenants when I had C class properties. I have never have any issues with cold cash. The only caution is the theft aspect, so take it to the bank regularly.
Being that the tenants are next door, they may want to pay you directly. Anyone who has lived in an apartment complex is used to paying at the office. Most apartments take cash or checks at the office. Since you live there, they may consider your unit "the office" and understandably so.
I would push for electronic payment, but sometimes that is not an option for certain tenants, because it requires a bank account. Tenants with money management issues may be "all cash". That presents issues for electronic payment and that is where cash or money orders usually become the option.
1 Reply
Etim Fisk
Rental Property Investor · Springfield, IL · Member since 2019 · 21 posts · 6 votes
7y
@Caleb Heimsoth, I’m new to Realestate investing, but I’m curious about your reason why you wouldn’t accept cash from a tenant?
0 Reply
Connie Chan
Investor · Member since 2017 · 239 posts · 149 votes
7y
@Colin Sweeney I use online payments via a landlord app called Tellus. It’s free for rent collection and can also handle one off reimbursements. If you’re just looking for rent collection, I think a lot of the options mentioned here are fine. If you want other cool features like expense tracking, downloadable Income statements, rent reminders, documented communication, etc then I would recommend checking out Tellus. I would caution against cash since it’s hard to document. Checks are better than cash for documenting but even then they aren’t great since they can bounce and also some banks don’t let you easily retrieve check records after a period of time. One other benefit of Tellus payments is you can block partial payments and have a different bank account assigned for each property. It’s also completely free for tenants that pay with bank transfer although they do charge a fee if a tenant uses a credit card to pay rent.
1 Reply
Andrew Clark
Rental Property Investor · Raleigh, NC · Member since 2009 · 90 posts · 52 votes
7y
@Colin Sweeney
I use Rent Manager Software with the PayLease payment add on. It's cheap, the tenants love it. They can pay in person at Walmart, Kroger, most check cashing places, online via checking, saving, debit or credit card. It all goes straight to the bank. I dont deal with any NSF's either, PayLease handles all of it.
0 Reply
Heath M.
Rental Property Investor · Chattanooga, TN · Member since 2017 · 203 posts · 188 votes
7y
Cozy and check by mail for me. I have one that sends a money order in the mail, the rest use cozy. No issues so far. My latest tenant paid 1st months rent and security deposit in cash, I was thrilled!
0 Reply
Frank Wong
Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
7y
I have the tenants bank and my bank link up through Zelle. A free service that all major banks use to transfer money. You can have it linked to your phone. I get a text every time my tenant pays.
0 Reply
Jessica Tomlinson
Rental Property Investor · Haverhill, MA · Member since 2016 · 25 posts · 7 votes
7y
@Colin Sweeney Cozy.co all day.
I use it for my tenants and recommend it all the time to my landlord clients.
There’s plenty of choices and programs out there that all do the same thing though. Good luck!
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