Can I take venmo for rent from tenant?

[Corey Meyer]

Hi,

I have been taking payment from tenants via venmo to my personal account. Recently I moved my rental properties into LLCs and opened business bank accounts that correspond to the properties. My legal advisor is advising I have tenants pay to the LLC. Is there a way I can keep using venmo as it works for my tenants and I. Or is there a different system I should implement?

Thanks,

Corey

[Caleb Brown]

What I have seen people do is note the month/address in the Venmo when the tenant pays. Then have the Venmo linked to the bank account for the LLC. You would transfer it to your bank, just keep those records. Might not be the right way but I have seen people do it

[Alecia Loveless]

@Corey Meyer I have the same issue. I have the rents coming in from Venmo go into one central account and then transfer them to the proper bank account corresponding to each rental.

I was advised to use a business account as opposed to a personal one for this purpose.

I don’t think there’s a way to switch accounts within Venmo. I also don’t want to have 10 different Venmo accounts. I will be sticking to my current method of one account for deposits and then transferring the money around.

[Zachary Jensen]

Quote from @Alecia Loveless:

@Corey Meyer I have the same issue. I have the rents coming in from Venmo go into one central account and then transfer them to the proper bank account corresponding to each rental.

I was advised to use a business account as opposed to a personal one for this purpose.

I don’t think there’s a way to switch accounts within Venmo. I also don’t want to have 10 different Venmo accounts. I will be sticking to my current method of one account for deposits and then transferring the money around.

 Indeed as long as it shows up in the "business bank account" and not your personal you should be good. 

[Colleen F.]

@Corey Meyer my business account I have them pay by zelle or you there are a number of ways for example on apartments .com they can enter info for an ACH transfer. If you want to stick with venmo, you just need to add the business account to transfer to. If you have an LLC your new leases should have payment made to the LLC.

[Mary Smith]

@Corey Meyer I do not recommend collecting rent payments through Venmo. Instead use a free property management software to help you with the rent collection process.

[Michael Smythe]

You can connect a business profile and account to your personal Venmo account.

Isn't easy and you still get all email alerts at your personal email.

You can get a monthly statement though:)

[Paul H.]

Hi Corey, 

So I'm not your accountant or legal advisor here... and people may not like what I'm going to say. It may not "technically" be the best practice. 

But I've been accepting Venmo & other forms of online payments that go into personal accounts for 10 years now from dozens of tenants. 

I simply have a spreadsheet that I update a couple times a month. Typing out EVERY SINGLE income and expense in my life, personal or business. And I label them as such. Personal Item, Rent Income, Rent Expense, Flip Expense, etc. 

I have a personal bank account, two LLC's each having a bank account, about 10 credit cards with 2 of them being business cards.

And guess what?!? Personal and Business transactions run through ALL of them. 

So people can start bashing on me for this, but I don't see a significant problem and haven't had one. 

My thought is that if the IRS audits me, I'm perfectly capable of showing how "Joe Smith" paid my venmo $1K, I transferred it to my personal account, I also have a lease agreement identifying that $1K and Joe Smith's name. I've labeled it Rent Income on my spreadsheet and it matches to my Tax Return details of Income/Expense. As long as the IRS can track it and see I'm not hiding anything, recording it and paying the appropriate tax, I doubt they would have an issue...  

Additionally, over the years I have re-financed over 10 properties with local banks. Yes, they ask for Rent Rolls, Bank Account balances, etc. But not once have I ever had an issue with how I accept, move and track this stuff. I could see some banks not liking it... but I've dealt with 4 or 5 now and it hasn't been an issue. 

So... I'm sticking with my standard practice for now. 

[Wesley W.]

I'm in the minority here, but I prefer not to have a third party vendor handle rent transactions.  My tenants pay directly to a pre-designated bank account at our local credit union.  They can walk in any branch with a personal check or cash, or pay online via ACH bank-to-bank transfer.  From the deposit account, those payments can be swept to where they need to be with no cross collateralization.  My feeling is having another party involved incrementally creates another link in the chain that can be delayed, broken or worse - allowing the payer to "claw back" payments, sometimes months from now.

[John Morgan]

LLC's are worthless. Any attorney can pierce them showing you're behind your LLC. And when you evict, you'll need an attorney to represent you in court. That being said, I have an LLC. lol. I collect rent with 8 tenants with Venmo and it's easy and free. However, I've been switching people over to apartments.com to transfer rent into my business account under my (worthless) LLC. It's free and easy. And they charge late dues at midnight on the 5th so I don't have to tell my tenants they owe the additional $75 late fee. lol

[Mose Gebremeskel]

Yes, you can do that as long as it doesn't go into personal accounts. I wouldn't recommend it though as I use a property management software that does it automatically.