Dwolla: A Great Rent Payment Option for Landlords and Tenants

Note: This post was originally feature on the   

What's the biggest pain about being a landlord? It's collecting rent.  We've all had tenants from hell that paid their rent on time, but hands down, the biggest problem for landlords is collecting rent.  This can be especially difficult for out of state landlords or those not using a property management company.  It goes without saying that every landlord should qualify their tenants in order to minimize rent issues, but even the most qualified tenants sometimes become problematic.  

Today, I'd like to discuss a payment option for tenants and landlords that can make your life a little easier.  The service is called Dwolla. Dwolla is an online payment service similar to PayPal, but much more efficient, less costly, and more secure.  Essentially, Dwolla allows you to pay directly from one bank account to another (User to User).  This isn't a credit card payment, it's actual cash being transferred from the payor's account to the payee's account.  The entire transaction is conducted online, and Dwolla even let's you connect to other users through social media applications (Facebook, Twitter, FourSquare, etc.).  Unlike Paypal and other online payment services, Dwolla doesn't take a percentage of the transaction. It only charges a $0.25 transaction fee.  Yep. its just 25 cents per transaction.  This just made online payments a reality for renters, landlords,  and even large property management companies.

I first learned about Dwolla about a year ago from a friend that grew up in the Quad Cities, close to the Dwolla headquarters in Des Moines, Iowa. He sent me an article about the founder Ben Milne and his company Dwolla (Article). My buddy thought this might be a good payment option for my tenants - and he was right.  I own rental properties in Texas and in Missouri, and almost all of my tenants use Dwolla to pay their monthly rent.  

Tenants love it because it allows them to pay rent online- it's simple, fast, and secure. Landlords love it because they know exactly when a payment has been made, and it's cash money - No bouncing checks, real-time payment notifications, and it's SECURE!

I have been using Dwolla for my rental properties for over 6 months without issue. Recently I had to use the costumer service to follow up on a payment from one of my tenants that failed.  My email was answered within 30 minutes of the original submittal and my phone call was returned in less than an hour.  A simple error on my tenants part stalled the transaction, but we figured out the matter with help from Dwolla CS. The transaction was good to go before the end of the day.   

I have nothing but positive things to say about the Dwolla. It's been a game changer when it comes to rent collecting (especially out of state).  For more info or to sign-up with Dwolla check out their website: www.dwolla.com.

Seth Teel is a licensed agent for New Western Acquisitions. I specialize in investment property, REOs, foreclosures, sales, acquisitions, rentals, auctions, estate sales, and all types of real estate investment. Call: 210-628-9373 or Email: [email protected]