Renters using a credit card to pay rent

15 Replies

Hey guys, I have a potential renter wanting to use a credit card to pay rent. In this case it is a government employee attending a government training camp (FLETC - Brunswick, GA). The government provides the person a government travel card to pay expenses. I am trying to avoid paying out "x" percent to Pay Pal or anything similar but may have to "bite the bullet" and use one of those methods to allow the payment. Just curious and would welcome feedback on what is the least hassle but best method for a renter using a credit card to pay the rent. Thanks in advance.

@Jeff Fountain well like most businesses, charge a fee/extra. When I rented apartments, it was anywhere from a 1.5 to 3.5 percent charge. Most people understand this extra fee.

I know the IRS charges a fee for credit cards even thought hey don’t charge a high enough fee but that is because they just want to get paid. There is a benefit to actually getting paid versus not getting paid :0

Most/all online rent payment tools accept ACH (usually for free) and credit cards (usually for around a 3% fee).

Cozy does this, checking account deposits are free to the tenant and landlord. Credit card charges are free to the landlord and 3% to the tenant.

Gives them options without taking a chunk out of your pocket.

For government employees on official travel, use of the government travel card is generally strongly encouraged (from a legit fraud control perspective). The agency they're with may allow them to separate the rate and lodging taxes on their reimbursement request (as long as it's specified on the bill).  If that's the case, and you can bill for it that way, it might more than make up for the credit card fees. 

Also, for the most part, government travelers don't necessarily care what the rate you charge-- as long as it doesn't exceed the authorized government lodging rate (i.e. they're not out of pocket). If you're under that rate, you're competing on quality and convenience, not price. 

Originally posted by @Jeff Fountain :

Hey guys, I have a potential renter wanting to use a credit card to pay rent. In this case it is a government employee attending a government training camp (FLETC - Brunswick, GA). The government provides the person a government travel card to pay expenses. I am trying to avoid paying out "x" percent to Pay Pal or anything similar but may have to "bite the bullet" and use one of those methods to allow the payment. Just curious and would welcome feedback on what is the least hassle but best method for a renter using a credit card to pay the rent. Thanks in advance.

You charge a processing fee. Mine is $15. Never had any issue. 

@Jeff Fountain I use an app called Tellus. It does free ACH payments and for credit card there is a 3% fee to the renter, free for landlord. I haven’t seen any services that don’t have a fee for the renter and landlord, am curious If others have. I like the Tellus app since it’s made for landlords so it has options like late fees, auto-pay, blocking partial payments, etc.

@Jeff Fountain , credit/debit card should not be an issue at all.  Practically every rent collection software offers this service: Burbz, Cozy, Tenant Cloud, Turbo Tenant, etc.  The tenant will pay the service charge which is typically 2.50-3.50% depending.

In fact, the nice part about tenants paying by card is the faster payout.  Standard ACH takes 4-5 business days because both sides most clear the ACH before payments are fully transferred.  With card, it's immediate on the tenants side which saves you a few days of money sitting in limbo.

Best of luck!