How do you accept rent if self-managing apartment?

Question

This is a newbie question - what service do you use to accept rent money when you're managing the property yourself? We're using a property manager right now for the basement apartment we just created in our house. It seems like an extra step for communications, especially when we just live upstairs. I just don't want to accept checks if I can help it - do people use Venmo or are there apps out there specifically for rent collection?

Thanks!

Sharlene Mulchandani · Answer

@Sharon Beatty I suggest collecting your rent via a free property management software. That way your tenant will be invoiced every month, with automatic payment reminders going out to them as well. Another advantage is that late fees are automatically enforced, so you don't have to be the bad guy and ask your tenant for these in person.

Ben Pupa · Answer

So I went through the entire Bigger Pockets list of online rent tools and narrowed it down to 5 free ones. I'm planning to settle on one of these to use for my first rental property: Avail, Cozy, Tellus, Turbotenant, Zuby

All of these offer free rent payments and marketing/listing of the rental. Most offer free credit/background checks, but a couple charge the tenant for the report which gets sent to the landlord. Some other noteworthy features are state-specific leases and maintenance tracking.

I looked into paypall (they own venmo), but landlords are not allowed to use the "free" transactions for rent. Business transactions are supposed to pay a 3% fee to activate buyer/seller protections. For example, without protections a tenant might be able to dispute the transaction and get their money back. Venmo seems to not offer any protections which is why its all free.

Thats my research so far.

Mike McCarthy · Answer

@Ben Pupa out of your list, I’d recommend Cozy. Free (with some add-one) and built for landlords.

I believe turbo tenant had some payment issues a year or two back. I didn’t use them, but if I have the company right, it doesn’t sound like they resolved it in a customer-oriented way.

Matt M. · Answer

@Sharon Beatty

Venmo, cash app, cash, money orders

Matt Nico · Answer

Hey Sharon,

I used to use venmo when I had 1-2 properties. After I got 3+ I switched it to be on a site called Cozy. It collects rent for you and its pretty convenient. I have Cozy linked up to a business bank account and then quickbooks online hooked up to that. I would say if you are living in the garage apartment, I would self manage. Paying a property manager to manage that seems a bit overkill. Plus doing it yourself will give you a good introductory feel to what property management is like. It could help you in the future if you have more rentals.

Hope this helps,

Matt

Ben Pupa · Answer

Hi Sharon,

I am closing on my first investment property next week and have the same question as you. I just started researching a couple minutes ago and found that Zillow has lots of landlord resources, including a rent collection tool. It does charge a fee however (paid by the tenant). I'm pretty sure Venmo or Zelle would work fine. Let us know on BP what you find! Thanks.

Matt Ziegler · Answer

why  not set it up as a direct deposit into your business account? We have several who have their back automatically send us a check on or before the due date. Others use money orders, and direct into the account is easy and hassle free.

Sharon Beatty · Answer

@Matt Nico - thanks!

John Underwood · Answer

They deposit directly into my bank account, Zelle, ACH or Paypal.

Joe Splitrock · Answer

Venmo terms of use state it is only for person to person transactions and not allowed for business, unless you have a business account. Businesses use ACH for bill payment. ACH is how you pay your utility bills, mortgage, etc. All the purpose built rent payment services use ACH, which basically just pulls money directly from the tenants account. ACH is also known as direct deposit, which is how most people get their paychecks.

How do you accept rent if self-managing apartment?

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