Favorite rental payment method?

[David Sray]

Hello friends!

Thought I'd check in and see what the landlords of the world like to offer in order for their tenants to pay rent? I only have one SFH rental right now, but want to get into more when the deal makes sense. We are super-old skool, and are accepting personal checks (I know!) from our current renter in the mail, which we then deposit with the ole take-a-pic-of-the-check method. I want to offer our tenant an electronic method that doesn't cost too terribly much or is free. Do folks use Dwolla or Paypal?

[Daniel Chang]

I went through this not too long ago. Keep in mind I rent to businesses, some of them national multimillion dollar businesses. Your situation is very different since you are dealing with SFH residential. But here are my thoughts regardless:

Checks.  Most of these larger businesses have a separate payroll department that sends out checks once a month to all their vendors.  What's most important is that the check arrives on time and it is good.  For a few of my tenants, I'm willing to go through the "picture-deposit" method because getting paid, and not the method of payment, is the most important. Plus I'll never get them to sign up for ACH payments.  

 ACH payments.  Remember for all ACH payments, you need to get your tenant to sign up for it as well.  At minimum, they need to submit their financial/bank information.  There may be a lot of hesitancy to do this.  I do agree this is best if the cost and situation is right.  

- Chase Quickpay.  A bit informal/unprofessional but secure and trustworthy.  You need to have a Chase account.  As you scale, you may need to switch to something else.  They have a limit "per day", I think it's like $5000.  So if you have 3 rentals at $2K rent each all due on the 1st, then it's time to find another method.

- Paypal.  Professional and secure.  However, in order to avoid the 3% (or so) fee  they charge, you have to ask your tenants to send you money "to a friend".  That part is a bit unprofessional.  If they accidentally do it the wrong way, you will get hit with a 3% fee.  Are you going to ask your tenant to call into Paypal to correct it?

- Dwolla.  Seems great at the surface.  However a few months ago, they got cited and fined for lying about how secure their servers are.  Keep in mind, you need to ask your tenant to submit sensitive financial information to this business.

- Erentpayment.  Been around for awhile so a good track record.  I would say it's pretty secure.  Only down side is $3/payment is a bit steep (or am I just too cheap?)

- Cozy.  Too new.  Untested in terms of security.  Business plan (free) may be not be sustainable, just like Williampaid (ACH payment service that went out of service).  

- Quickbook Payments.  Intuit just shut down their awesome awesome service of Intuitpaymentnetwork which charges 50cents / payment and had these awesome features like auto request payment.  You also didn't need to use Quickbooks.  They replaced it with a clunky Quickbook Payments.  It still only charges 50 cents per payment, but there is no auto request feature, and you have to use Quickbooks 2015 or later or Quickbooks Online.  If you use Quickbooks then I think it's the best method.  Otherwise not worth it.

I personally use Quickbooks so I use Quickbook Payments.  Intuit is a very secure company, and it has more of an air of professionalism.  

Most of the other ACH companies I didn't mention generally gear more towards multiple units and monthly subscription plan. Probably not cost effective for a single SFR.