Rent payment apps, Venmo?

Question

I'm just getting started being a land lord. My first thought for payment is to have my tenants pay through Venmo. Is there something better?

Thanks

Sharlene Mulchandani · Answer

@John Cantey As far as I know, for Venmo, you will require a business account to collect rent, since by using a personal account, you are in direct violation of their User Agreements. Also, through the use of a business account, you're likely to encounter fees to collect these payments. I suggest looking into a free property management software company for rent collection instead of using these apps.

Nam Trang · Answer

Cozy.co is the one I use. It's free for both sides of the transaction and I can pull data at the end of the year for my taxes, which lessens my personal accounting. My tenants also like it since it sets up email reminders if they opt out of autopay. I'd suggest something like that to them.

Joe Splitrock · Answer

Just be aware that Venmo and Paypal require a business account for rent collection and charge 3% transaction fee. Zelle is a personal pay method so it is not meant for business use. Zelle isn't an option with all banks and has a transaction limit that varies by bank. Some banks limit to $500 or $1000.

Of course you can use any of these payment methods outside their intended use, but there is a risk of funds being frozen or accounts closed. Generally speaking ACH based payment systems are better, because they are purpose built for businesses.

Laurie Watkins · Answer

I used to use Venmo but transitioned out of it due to the legalities stated above. Now I use RentRedi. It works fine but did take some playing around to get used to all the functions. I like that its all legal and the platform has complete functionality in the app on my phone. Downsides are - RentRedi charges the tenant a dollar for ACH. It also takes a 4-6 days get to my account because it takes 2-3 days to clear the tenants account and then another 2-3 to clear my account.

Janette Nason · Answer

@John Cantey

I had that problem a couple of years ago with cozy changing to apt.com

I was not able to access the account at all.

What did you end up using after that?

I've been mostly using Venmo but it may be time for a change.

John Cantey · Answer

Cozy became Apartments.com and none of the 4 tenants I sent links to were able to sign up. Not sure if that sure if that was user error or not.

Calvin Nguyen · Answer

+1 for Cozy.co

Joe Splitrock · Answer

Cozy uses ACH and any ACH based system can have tenants dispute charges and they get pulled back. They just tell the bank it was not authorized. Any ACH payment system has the exact same risk. That being said, EVERY utility and mortgage bill pay system uses ACH. When tenants are disputing charges, it is not the payment system that is the problem, it is the tenant. This can be avoided with better tenant screening.

Timmi Ryerson · Answer

@JohnCanty

The problem with stand alone payment processors is that your tenant can do a chargeback at any time against your account.  There is a theme on bigger pockets that talks about Cozy having these kinds of issues because they use Stripe.  Stripe has no way for the landlord to dispute the chargeback.  Most of the others are also that way.  The reason is complicated but suffice it to say, you as an individual are not PCI compliant.  I use software that allows my tenants to log into a portal and pay rent.  It also shows them the statement, charges, history of payments and a running account balance.

The processing takes 3 business days for ACH and 24 hours for Credit Cards.  The best part is that all of the accounting for the charges and payments is automated and goes right into my ledger.  I can print reports from these legers.  It is just an automated way to collect rents and save time.  And I do not have to go after the tenants to make their payments on time.  If they are late a late fees is added automatically.  I love it and my tenants love it. You might want to check it out.  Smart Property Systems.

Zachary Ray · Answer

Everyone on here is correct, Zelle and Venmo and Paypal work fine. If any hiccups happen stick strong to the lease.

Rent payment apps, Venmo?

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