Do you rent to the tenants whom have no bank account?

Question

Having a bank account should be a necessity for a renter you may approve. If a renter says they do not have a bank account and will only pay everything with cash, this request could be a big red flag for them performing illegal activities for making money. Illegal income activities could put your home at risk if you should rent to them.

Ask for a checking account, because to open a checking account the bank runs a Chexsystems and checks and if this person is not on the blacklist. If they can't get a bank account they are probably a very bad credit risk.

Account Closed · Answer

I required all of my tenants to have a checking account.  For new immigrants and foreign students, I sent them to the local Chase bank, where it was easy for them to get an account.  No bank account, no apartment.

Thomas S. · Answer

It is very simple for a landlord to require all tenants to have bank accounts. The fact that in some areas people may not have them does not make it impossible for a landlord to insist on bank accounts. If there are banks within a reasonable driving distance, closest small town, then anyone a landlord would choose to rent to should be of reasonable enough intelligence to manage a bank account. What ever their attitude or reasoning for not having an account is simply not relevant.

Landlords of the opinion that it is not possible to get tenants to have accounts are not requiring bank accounts. If it is a condition of acceptance as a tenant it is then the tenants choice as to whether they wish to put aside their paranoia's or not. If they refuse then they are hiding from bill collectors and you do not want them as a tenant.

Landlords are simply catering to their tenants rather than establishing proper business practices if they do not require bank accounts.

Jeff Gates · Answer

I noticed Paypal has a fund account with cash now.

Jay Hinrichs · Answer

@Gino Barbaro  the reason your tenants are paying with money order is they Have NO BANK account LOL.

having owned several hundred  ( over 350 deep south mid west rentals) I would say its RARE that they have bank accounts.

@Curt Smith  Is correct in this...

And this is what many Austrialian investors who invested in the hoods of America came to realize.

There are NO CHECKS in AU... its all on line. .so the thought that even one American renter did not have a bank account and pay rent electronically shocked the hell out them.

But once you explain you have cronic bad credit cant get an account ( Deep south mid west) Hispanic or other foriegners ( distrust banking altogether).. they just were shocked..

the only on time rent payment in these areas IS HUD.. everything else is 90% cash and carry or money order and carry.. @Gino Barbaro  your clients are an exception no doubt.

Curt Smith · Answer

Renters in rural america at least in my GA rural locations rarely have a bank account!

I agree with above as a result of the statistics if an applicant has a bank account that is a huge plus, does it have move amount plus some that is plus #2.  I'm not kidding.  We have 33 rentals, 2/3 are semi rural / small towns.

I'm looking for a solution for paying rent with other than mailed money orders which are a night mare.  If you loose one it causes a royal pain for the renter. Or it "mysteriously" got lost in the mail yet the renter has a picture of it as it was being mailed...  Happens.  Not jerking around by the renter, it can get lost in the mail.  That is a royal pain too.

I hate taking rent via Walmart to Walmart the other option that is dead safe.  It means I'm always going to walmart and I don't want to do that.  But I'm forced to to pay contractors in remote rehabs in rural GA.

Blue card, green dot all have disadvantages of max pay per send, max pay per month or something.

Yes I rent to folks who have good jobs that I verify, 3x rent, ideally 4x but that's rare, have move in amount plus safety margin, no evictions. Few charge offs in their credit check (MrLandlord.com).  I ignore medical charge offs. Rural folks have no choice re medical care.  Go to emergency room.  Never pay is how this 1st world country works.  Us well off types don't realize...  :)

Jeff Gates · Answer

How many tenants have no bank account?

Jeff Gates · Answer

What about this (2014)

New data released yesterday by the Federal Deposit Insurance Corporation, or FDIC, showed that 68 million adults in America are disconnected from the financial system in some way. Currently, 17 million are unbanked—meaning they do not have any bank accounts at all—and another 51 million are underbanked—meaning that they have bank accounts but rely on alternative financial providers, such as check cashers and pawn shops, to meet some of their banking needs.

Thomas S. · Answer

No bank account is usually a indication of a individual being hunted by creditors. This may not always be the  case but landlords need to keep two primary factors front and center when selecting tenants. Number one obviously is their ability to pay. This would be determined through your screening process, employment, income, credit score, tenant history etc. Secondly, and equally important, is your ability to collect in the event they should stop paying. You need as much info as possible in regards to their SI#, employment  and banking information. Banks can be changed but having a bank account adds to a individuals stability factor.

Gino Barbaro · Answer

@Jeff Gates

Hi Jeff

how do they fall on the other parameters, job, income, credit score, any references.  It is highly unusual not to have a bank account, but verify all these other criteria and see where they fall.

I have not encountered a tenant without a bank account, and our company only takes checks or money orders.

Good Luck

Gino