Ideas for Collecting Cash Payments
I have a 6 unit building and I'm trying to move away from having to go down to the building monthly to collect rent. I was able to move half of the units to paying online/cashapp but a few of my tenants still don't have bank accounts or simply prefer paying cash. I looked into paynearme where you can go to a local store to pay your rent with cash with a small convenience fee but this service no longer provides direct solutions to landlords. I'm looking for alterative solutions to separate my physical self from having to collect the cash payments. The area the building is in is Passaic NJ. Any ideas would help!
for the holdouts is it an option to have them mail you a cashiers check/money order? What does your lease say about making payments? Is you coming to the unit collecting cash payments listed as an option? If so, you might want to remove that as you renew/release. doesn't get much easier then cashap/zelle/online etc....maybe a direct bank transfer via ACH? But that is still online. Unless you want them coming to you try the cashiers check/money order.
Hi Vania!
This is a little different if your tenants don't have bank accounts, but there are a few options. Number one, as far as I'm aware of, anyone can deposit money into any account- just not take it out.
So if you set up an account at a bank where it was easy enough for these other tenets to reach it, it seems like they would just need to know your name (or LLC, whatever it is) the account was held under to do a cash deposit. Basically they are walking in and requesting to deposit 'X amount" into "Vania N's" account and that's it- they don't need the account number or anything else from my experience as long as they are at the correct bank.
That's the free way to go about it anyway.
There is another option from a mobile bill pay like Square, where you can manually type in a card number from any card that has a 'chip' or magnetic strip on it- like a prepaid Visa card. The issue here is going to be paying the terminal or transaction fee, which will add up quickly.
This usually has to be a registered card as well (like a 888 or 800 #) to call at purchase to comply with National Anti Money Laundering laws. One more down side here is usually a fee at purchased the card (around $5 usually) and a 'reload' fee.
Along these same lines, an app like Venmo may work with a prepaid card (registered to a network brand like American Express, Discover, etc), but the issue with the daily/monthly send limit would be an issue I think.
Zelle won't work as they don't accept prepaid cards at this time (at least last I checked) so that free option is out if there are no bank accounts.
Any other option apart from the bank will have a fee attached to it if there are no bank accounts involved, at least that I know of. To even go to a big box store like National grocery or Walmart and wire money would be a fee and hassle for the lines it seems.
Again, the easiest (free) thing that I can think of is just to set up an account an an easy to reach bank (even if not my regular bank) and have the tenants do cash deposits that way. They in no way have to be attached to it, again that's my experience in lending to friends and family without any of them having same last name, address, etc as me and how they've paid me back- so I don't know why this wouldn't work for you the same.
Shouldn't raise any red flags under a certain dollar amount coming in (usually it's one large transaction, or in the amount over $5K that gets held for verification by the bank's holding fees - again National Anti Money Laundering laws) but if you needed to leave it set for a few days until it did clear, still shouldn't be an issue unless you're using these funds for immediate use.
Hope that helps!
@Scott M.
There is an option but I wanted to avoid the potential 'lost in the mail' excuse. I also wanted to move away from having tenants come to the house to drop off payments
@Anna Laud Thank you very much for this. So far it seems using deposit at the bank is the best option. My only question is I use Wells Fargo and I have to enter in my debit card each time I want to make a deposit even with a teller. How do you get around this when you go to deposit money?
Originally posted by @Vania Nettleford:@Anna Laud Thank you very much for this. So far it seems using deposit at the bank is the best option. My only question is I use Wells Fargo and I have to enter in my debit card each time I want to make a deposit even with a teller. How do you get around this when you go to deposit money?
Call your bank and describe what you are trying to do. The tenant should only be going to a teller with cash. You may have to switch banks. My bank allows the tenant to just give our company name, but other banks may require the account number to deposit. Some people think that is risky, but it really isn't. Every time you give someone a check, your account number is on it. Just keep a close eye daily on your accounts. That is best practice regardless.
You bet = ) I know that (at least here in Indy) there a few banks where you don't need to do this. You can try setting one up at BMO Harris maybe if you have nearby or Chase. Either of those here at least work and worth a shot in trying them!
if you got the cash deposit into the bank route be sure to either supply them with slips with their name/address written on it or be sure to request this. Even with requesting odds are 1-3 of them will forget each month. 1, no problem. 2 or 3 forget and now you have to spend time figuring out who paid/didn't pay. Oh the times we have spent looking at handwriting trying to match to previous deposits : ) Be easier to collect it in person.
@Joe Splitrock thank you! I'll give my bank a call!
You can get the paynearme service through buildium property management software. I have found Buildium to be well worth the costs-- we started with 8 units-- especially if you plan to continue to grow your business. It also provides accounting software, online applications, screening, eleases, happy inspector software. (Not affiliated other than as a customer). Paynearme is great for tenants that can't/won't move to online payment and it is also great when you have a problem tenant or eviction in progress-- there are no chargebacks due to insufficient funds or scams. And maybe best of all, all the accounting entries are automatic...just like for online rent pay :). You know that a payment comes in within a couple of minutes.
@Jill F. Thank you Jill I will look into that, as of yesterday I was able to get my tenants set up with my bank without an additional fee if that doesn't work then I will definitely look into that as an all-around solution as I'm combining 3 at the moment
Just an update if anyone is curious to know. I used a blended solution. I setup a zelle account & apartments.com for online payments and for cash payments Wells Fargo business accounts allows cash deposits with just the account number and routing number.
