Hi everyone! I'm so happy to be posting for the first time here at BP! I'm a long time podcast-listener and have been reading the forums and blog posts for a while. Also, I'd like to share that I'm closing on my first rental property (duplex)! I'm signing the final loan docs tomorrow!! :) Here's my challenge I'd love to get your feedback on. I'm trying to figure out the best way to collect rent for tenants who don't have bank accounts and want to pay in cash. Here's my specific situation: • I inherited a tenant from the sale and she pays only in cash • The property is 2+ hours from where I live so collecting in person is not doable • I'm going to be managing the property myself (I'd like to learn more about this) • The property is in a C neighborhood so I won't be putting a rental box to collect monies I looked into PayNearMe but that's not available to me since I only have one property. It looks like the only option I have is to open a bank account and give them my bank account # to make deposits in person. Is there anything else I can look into? Or, any precautions I should take regarding the bank deposit solution? Thanks so much in advance! Jessica P.S. I've reached out to PayLease to see how much their services are but I have to be careful on expenses to keep a positive cash flow.

I'm really not very concerned about giving my account number to a tenant. If they were able to do something just by having the number, we would never give checks to anyone, as the account number is always listed.

Never take rent in cash. Why? - You have no paper trail. If you are trying to evict, there is no proof they gave you only $100 or maybe $1000. It becomes a he-said, she-said issue. - It is unsafe to carry large amounts of cash. You become a target. Have your tenants get money orders. The nice thing about money orders is you have a paper trail, and if they get lost, you can recover the money (for a fee).

Open an account with Wells Fargo. They're everywhere and they do accept cash deposits from tenanta. That's what my tenants do, if they don't use Zelle

I've been working in a low-income neighborhood with evictions left and right. Yes, people can do that, but the chances that they actually do are pretty slim. Have never had anyone try that, even though they deposit rents into my account. Tell them that any payment they'd make you'd turn over to the courts into their escrow account. That way they don't even bother. Yeah, it can happen, but there's always something that can go wrong and if you worry about all of the potentials all the time you probably can't get out of bed.

Cash is a no go. Dangerous. Checks bounce so even if they had a bank account you wouldn't want to take those. Directly depositing into your bank account sounds great on the surface until a professional tenant whom your evicting deposits $1 into that account w/out your knowledge on his way to eviction court. Judge speaks, he whips out that receipt, case closed you just lost. Have them pay you in money order. Simple, easy & C-Class tenants are familiar with the process.

I second MoneyGram. I’ve also had tenants deposit directly into a local bank. The bank receipt from the teller/atm then is their proof of deposit (it doesn’t give any info other than it was deposited) and my online record is a second paper trail.

Most banks will not accept cash deposits by someone other than the account owner holder or a atm card holder for the account. One way I’ve heard of is getting a deposit only ATM card for the account and giving it to the tenant. I have a couple of tenants that buy money orders or cashiers checks and I give them my LLC deposit slips, but this is only because I let them. Leases say it has to be check or money order at my mailbox by the first.

@James Wise makes a great point on evictions. If you are in the process of evicting (at least in my State) you cannot accept any partial payments or it resets the clock. So if a tenant has the ability to deposit $1 and you don't have a good way to reject it, the tenant gets to stay another month or so for free. Yuck!

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Updated about 7 years ago on 02/21/2018. Most recent reply

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Posts: 9
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Jessica H.Poster

Southern, CA

General Landlording & Rental Properties

First-Time Landlady: How to collect rent from cash-only tenants?

Jessica H.Poster

Southern, CA

Posted February 11, 2018 13:01

Hi everyone! I'm so happy to be posting for the first time here at BP! I'm a long time podcast-listener and have been reading the forums and blog posts for a while. Also, I'd like to share that I'm closing on my first rental property (duplex)! I'm signing the final loan docs tomorrow!! :)

Here's my challenge I'd love to get your feedback on. I'm trying to figure out the best way to collect rent for tenants who don't have bank accounts and want to pay in cash. Here's my specific situation:

I inherited a tenant from the sale and she pays only in cash
The property is 2+ hours from where I live so collecting in person is not doable
I'm going to be managing the property myself (I'd like to learn more about this)
The property is in a C neighborhood so I won't be putting a rental box to collect monies

I looked into PayNearMe but that's not available to me since I only have one property. It looks like the only option I have is to open a bank account and give them my bank account # to make deposits in person. Is there anything else I can look into? Or, any precautions I should take regarding the bank deposit solution?

Thanks so much in advance!

Jessica

P.S. I've reached out to PayLease to see how much their services are but I have to be careful on expenses to keep a positive cash flow.

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