Tenant has no account: I am not confortable with cash payment any

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Tenant has no account: I am not confortable with cash payment any

Abidogun B Kehinde
Real Estate Agent · Owings Mills, MD · Member since 2016 · 22 posts · 2 votes

Advise on how tenant can pay me with a visa card. she has no bank account. In the past she handed me the card to draw money from ATM. A lawyer advice against it citing potential for many complications. How else can I get paid.

Bola

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Aaron Treloar
Vendor · Kalamazoo, MI · Member since 2016 · 93 posts · 56 votes
10y

They can buy a money order at just about any gas station or liquor store.

6Reply
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  • Aaron Treloar
    Vendor · Kalamazoo, MI · Member since 2016 · 93 posts · 56 votes
    10y

    They can buy a money order at just about any gas station or liquor store.

    6Reply
  • Phil G.
    Real Estate Broker · MA · Member since 2013 · 361 posts · 297 votes
    10y

    I had a lot of lower income tenants that didn't have bank accounts, in a 4 family I USED to own.  Logistics aside, I've found it tends to be a sign of some financial chaos in their lives.  I wouldn't rent to someone without a checking account any longer.

    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    10y

    Money order. I have some tenants that use them regularly.

    1Reply
  • Abidogun B Kehinde
    OP
    Real Estate Agent · Owings Mills, MD · Member since 2016 · 22 posts · 2 votes
    10y

    is there any electronic platform like pay pal that she can use.

    0Reply
  • John CasmonPro Member
    Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes
    10y

    Are they digitally savvy? There are a few online options (e.g. PayPal) that don't require a bank account. If not, just have them provide a money order. 

    0Reply
  • Abidogun B Kehinde
    OP
    Real Estate Agent · Owings Mills, MD · Member since 2016 · 22 posts · 2 votes
    10y

    OK, I guess money order has it. Thanks y'all. If there is any other person with bright ideas, I am open to further suggestions.

    0Reply
  • Gail K.
    Augusta, GA · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    I have a fair number of tenants who have never had a bank account.  One pays in cash (I know him well so I don't mind him dropping by my house to pay this and it means I don't have to go to the bank myself for cash as needed).   The others do the money order thing.

    Gail

    0Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    10y

    Can you set up a bank account for her to deposit the cash into?

    There is some pay system where she can make payments at 7-11, but I'm drawing a blank right now what it's called. Anyone?

    [email protected]Podcast Guest on Show #261
    BiggerPockets
    1Reply
  • Kyle J.
    Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
    10y
    Originally posted by @Mindy Jensen:

    There is some pay system where she can make payments at 7-11, but I'm drawing a blank right now what it's called. Anyone?

     I think you're thinking of PayNearMe.

    1Reply
  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    10y

    Cash only is a red flag.  I found they frequently get paid under the table too.  There are some cultures that run cash for everything.  Fair Housing regs say we have to take payments in any form offered (gulp), and as I was very remote, these tenants sent Money Orders.

    When performing your background checks, mention you need to verify income and when you can't do that with bank records, you can deny the application.

    0Reply
  • Account Closed
    Investor · Buffalo, NY · Member since 2016 · 668 posts · 209 votes
    10y

    The tenant has no bank account to seize and therefore makes collecting your judgement that much harder come eviction time. Have you verified income? Getting paid in cash makes wage garnishment darn near impossible. Both are signs of a professional tenant. Proceed with caution...

    0Reply
  • Penny ClarkPro Member
    Sacramento, CA · Member since 2014 · 513 posts · 319 votes
    10y

    @Abidogun B Kehinde, I receive money orders from two of my tenants who don't have bank accounts. Having no bank account is is not always indicative of a bad tenant as long as you can verify income with other methods. I would not be comfortable accepting a visa debit card for payment and would not want a tenant to deposit money into a designated account. The reason being that if you plan to evict that tenant in the future, you do not want them having access to a bank account that they can deposit money into. A client of mine made this mistake and it delayed the eviction process by an extra 30 days.

    I would never accept cash, simply because there is no paper trail to document it for either you or the tenant.

    0Reply
  • Abidogun B Kehinde
    OP
    Real Estate Agent · Owings Mills, MD · Member since 2016 · 22 posts · 2 votes
    10y

    well I just learnt something new today, I just gave her the info to transfer to my account. Thanks anyway, you live and learn.

    0Reply
  • Sam Shueh
    Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
    10y

    Go to the bank deposit it under your bank account. 

    0Reply
  • Sam Shueh
    Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
    10y

    Go to the bank deposit it under your bank account is what works for 100% of tenants.

    0Reply
  • Rick S.
    Fort Collins, CO · Member since 2014 · 397 posts · 161 votes
    10y

    @Abidogun B Kehinde I know you mentioned the bank transfer but make sure you have the ability to block transfer in the event you were going through an eviction and you don't want to allow them to submit partial payments.  

    Another option is have them get a NetSpend card or a similar prepaid debit card that allows ACH debits and they can use that with a payment service, such as PayPal or a rent payment service.  We have a number of tenants that make payments this way.  

     (Disclaimer: I work for a rent payment service)

    0Reply
  • Brian J Peterson
    North Riverside, IL · Member since 2015 · 77 posts · 21 votes
    10y

    I'm thinking a Money Order would be the cheapest and best solution for your issue.. Or maybe consider signing up with a company like Tenant Cloud, it's free to manage up to 75 units for a landlord and they have systems in place with PayPal and another company to accept your rent payments from the tenants! I'm in no way affiliated with the above mentioned company, and there are plenty of options out there for similar services.. Take a look at them and see what you think would fit your REI Platform the best and most efficiently so you don't deal with headaches of withdrawing money for her.. Also, why didn't she get the money out and give it to you like a normal person would do, why did you have to take that responsibility??

    1Reply
  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    10y

    Well if funny when it's Money.. 

    Cash in any rental office is rather a security issue, were not banks and nobody wants to get robbed.  A private owner of a small property can deal with accepting cash, much easier.

    Checks are still the best form of payment in my opinion.

    My experience with Money Orders

    I worked at a large over 300 unit Section 8, Tax Credit, property, most of our tenants paid with money orders, most didn't speak English, some couldn't read or write, or know how to properly fill out a money order. Most never kept the stub showing proof of the money order. Most never understood why a former employee was no longer around because she offered to fill out their Money Order and then after they left, made them payable to her, her boyfriend, or to pay her car loan. These were hard working people that never suspected they would be caught in a mess, having to get proof of payment by tracing a money order, that you can't trace, because they didn't retain the stub. 

    The former employee dodged scrutiny because she falsified records giving rent concessions, and move in specials on those accounts. I had to trace and verify deposits and found this employee had taken over 57K during her trusted years of employment. 

    Ya I liked Checks. 

    1Reply
  • Tommy F.
    Investor · Charlotte, NC · Member since 2015 · 183 posts · 146 votes
    10y
    Abidogun B Kehinde go to cozy.co not .com cozy.co and tenant can pay with credit or debit card. Fees apply. Or accept only money order or cashiers check.
    0Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    10y
    Originally posted by @Deanna McCormick:

    Well if funny when it's Money.. 

    Cash in any rental office is rather a security issue, were not banks and nobody wants to get robbed.  A private owner of a small property can deal with accepting cash, much easier.

    Checks are still the best form of payment in my opinion.

    My experience with Money Orders

    I worked at a large over 300 unit Section 8, Tax Credit, property, most of our tenants paid with money orders, most didn't speak English, some couldn't read or write, or know how to properly fill out a money order. Most never kept the stub showing proof of the money order. Most never understood why a former employee was no longer around because she offered to fill out their Money Order and then after they left, made them payable to her, her boyfriend, or to pay her car loan. These were hard working people that never suspected they would be caught in a mess, having to get proof of payment by tracing a money order, that you can't trace, because they didn't retain the stub. 

    The former employee dodged scrutiny because she falsified records giving rent concessions, and move in specials on those accounts. I had to trace and verify deposits and found this employee had taken over 57K during her trusted years of employment. 

    Ya I liked Checks. 

     Please tell me you nabbed her!  That you were able to press charges.

    0Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    10y

    I know the issue was resolved, but I also heard there is some type of money transfer they can do at the Walmart financial centers.  Don't remember details.

    0Reply
  • Brendon Woirhaye
    Rental Property Investor · Whittier, CA · Member since 2014 · 325 posts · 269 votes
    10y

    I use cozy.co for electronic payments, and I do have one tenant paying via credit card.  In general I don't like tenants running up a visa bill paying rent, but it works.  My cash economy tenants use money orders, but if I come by the property while the rent is due and they offer cash, I need to take it.  That rarely happens to me though.

    I do take cash for the security deposit and first month's rent, although I prefer a money order.

    0Reply
  • Martin Kruger
    Saint Paul, MN · Member since 2015 · 19 posts · 13 votes
    10y

    Square sounds like it might be an option.  You could swipe her card right on your phone.  https://squareup.com/

    0Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    10y
    Originally posted by @Martin Kruger:

    Square sounds like it might be an option.  You could swipe her card right on your phone.  https://squareup.com/

     That's a good idea.  The service fee isn't too bad for Square, either.   I actually just ordered their free reader for my phone for selling at craft fairs.  They seem to be a much better option than PayPal.  

    0Reply
  • Ben Dao
    Rental Property Investor · Saint Louis, MO · Member since 2016 · 123 posts · 84 votes
    10y

    I have quite a few tenants with no bank accounts. Some do mail money orders but the best solution for me is to give the tenant my bank account info and they physically go to the bank to deposit it. I tell them to send me a text right after its done.  If you want to do this, just make sure that you have a bank near the location of your property. 

    0Reply
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