Is Allowing Your Residents to Deposit Money Directly into Your Account a Good Idea?

[Steve Rozenberg]

Why You Should Not Allow Residents to Deposit Money Directly Into Your Bank Account.

[Rick H.]

Neither rental management nor bookkeeping are my strengths. However, here's my simple system:

I have one master corporate trust account for the rentals. Each property has a separate account identified by the street name and unique bank account number.

Tenant receives a one-page rental addendum with that bank account # as well as closest branch address, banking hours and phone number.

Tenant pays in branch into "deposit only" account privileges. They get a printed receipt. No personal checks accepted. I decided not to use deposit-only cards offered by my bank to ensure tenant or proxy enters bank branch and not just an ATM.

Money shows up online. It's either there or not. A late charge applies after 3rd day.

If on time, the only further action is for me to move money to master trust account

If not in account by 8th, I refer to U/D attorney to serve 3 Day Notice to Quit. Once served, I ask tenant to pay thru law firm. That's a hassle for them. 

If not resolved by the 15th, account is suspended so that bank will not accept any deposits, full, partial or otherwise. This prevents any games by tenant claiming a some form of payment was made to me to counter eviction proceedings.

So far, this system has worked well. Any improvement suggestions appreciated.