Do you accept payments in cash?
I definitely don’t – for a lot of reasons. One, I don’t want to get mugged. Two – I want proof that the rent was paid. If I accepted cash and get to the bank with $450 instead of $550 – I have a problem. Did I lose $100?
So cash is out… but a majority of my tenants do not have bank accounts, so I can’t easily deduct it straight from their checking account each month either. Therefore, I’m left with one option: Money Orders.
I’ve been using money orders for years now, and it’s worked okay. Tenants either mail their rent or drop it off at my “drop box” and I’ll pick it up and bring it to the bank.
However, I recently heard of a new service that is going to change the way I collect rent from my tenants to make it easier for me to get rent, on time, with less risk.
It’s called PayNearMe.
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PayNearMe: What Is It?
PayNearMe is a way to let your tenants pay rent at a local 7-11 (or other retailer), in cash, and have the money directly deposited to your bank account.
In other words, your tenant doesn’t need to go get a money order, get a stamp, get an envelope, and mail the check – and you, as the landlord, don’t need to wait around and wonder if your tenant really sent it (“it must have been lost in the mail!”) or if they are simply lying, so they can wait for their next pay day?
When a tenant uses PayNearMe, they simply take a small piece of paper you give them with a bar code OR bring their smartphone to a 7-11 or other approved retailer, and give the cashier the cash rent, and get a printed receipt right then and there.
How Much Does PayNearMe Cost?
Well, for the landlord. For tenants, there is a $4 charge to use the PayNearMe service. In other words, if the tenant chooses to live their life without a bank account, it’s fine – but it’s going to cost them $4 a month to pay their rent. This gives the tenant options, without hurting you (the landlord) at all.
Normally, there is a “set up fee” for landlords ($200) but BiggerPockets negotiated a discount rate for those who use the service through our link so it will cost you:
Yep, nothing. Totally free to set up.
So there is no cost to you, only some time needed to set the system up, which also seems really easy.
Should You Use PayNearMe?
Alright, I know this post sounds like a giant commercial, but I really really like this service and am excited to try it out with my own rentals, and wanted to share it with the BiggerPockets community as well.
I don’t believe this service is for everyone. Obviously, if your tenants all have bank accounts and you can simply enable direct withdrawl from their account – do that. Or if you have a “pay online” option on your website, you can use that.
However, if you (like me) deal with lower income tenants who don’t have bank accounts, and you want an easy and cheap way to collect rent easier, then definitely check out PayNearMe.
I’m about to try it out and I’ll report back my findings!
To try PayNearMe, and get the free setup for being a BiggerPockets’ reader, click the link below:
What do you think? Could you see this being a valuable resource? How do your tenants currently pay rent?