Hands off option to collect rent from cash-paying tenants?

Question

Hey, all. I've searched the forums on this topic, but everything I've seen seems to be outdated at this point, so I'll bring up the question again...

I am transitioning to self-managing my 8 units. Of those units, I have just two tenants who pay in cash. I definitely don't want to pick up cash, and I'd prefer not to deal with them sending payment through the mail (and the excuses that could come with that). I did consider having them deposit directly to my bank, but I think it's a bit far away for them.

SO... I've been looking at various PayNearMe options. Most of the ones I've seen referenced on older forum posts, such as PayNearMe, PayLease, etc. don't work with smaller investors. They seem to want you to have 100+ units paying with cash before they'll let you use their services. OR, the options I could pay for are far too expensive to justify when I only have two tenants paying rent with cash.

The only option I've found that makes sense so far is MoneyGram... they have locations near my units where the tenants can pay with cash. However, I still have to go pick up the payment from a MoneyGram location near me.

Have I missed any potential options? I use TenantCloud as my online property management portal with my tenants. If anyone has other ideas, I'd appreciate it!

Alex Smith · Answer

Why bother accepting cash at all? Is that the absolute only way they can pay? Seems like a lot to do for just two tenants.

Account Closed · Answer

@Megan Greathouse

Transition them off cash. Get them set up on auto debit. If they’ve got a bank account all you do is fill out the PAD form and have them sign it.

May be different where you’re at, but here it is tenants responsibility to get it to me, not my responsibility to retrieve it from them. I don’t babysit. They get 2 options, auto debit or etransfer and I push auto debit very hard.

Tyrell Perry · Answer

Here is your solution:

https://www.amsbilling.com/

Tenants have the option to pay at CVS, 7-Eleven and designated check cashing locations. After enrolling the tenant, AMS provides you with a tenant statement in PDF format. Provide that doc to the tenant via email or hand deliver. When the tenant wants to pay rent, they go to one of the locations listed above and provides the cashier with their tenant statement. The tenant statement has instructions for the cashier to follow to generate the tenant account. Following tenant payment, you receive an email with the payment confirmation details. There is a surcharge of $4.99 per transaction which the tenant can pay by adding the fee to their rent or you can pay by the tenant only paying their base rent. They have an online portal as well. Rents get transferred to your bank account around the 13th of the month.

Theresa Harris · Answer

Is there a branch of your bank nearby?  If so, they can deposit the rent there.  I know there are other options that people on BP have mentioned in other threads, but I can't remember what they were.  Try doing a search for cash and see if that pulls anything up.

Megan Greathouse · Answer

Thanks, all. I agree with many of your sentiments about the tenants' responsibility to pay. To be clear, I do NOT pick up cash. And I won't. These two particular tenants are older, inherited tenants who don't have bank accounts, but they have always been good about paying rent when I used a property management company. However, now that I'm moving to self-management, I need an option for them to pay at a physical location (like a gas station or convenience store) that will allow me to get their rent without going to collect it myself.

I don't plan to take on new tenants who can't pay online, but I also don't feel the need to kick these tenants out tomorrow. They have been there a while, pay their rent, and I have other units turning over now... so I need to focus on those turnovers first!

I appreciate everyone's feedback. If anyone knows of a MoneyGram or PayNearMe type option that actually works for someone with only a couple of cash-paying tenants, let me know. I know these options exist, but so far I've found I'm too small to use the services.

Peter Tverdov · Answer

There is a lot of downside risk to accepting cash payments. You need to take the time to drive there and get it (and hope they are there), you need to take the time to create a receipt. Take the time to count it in front of them. It takes up your time, which is money.

Now the risk part, you have to drive home/to the bank with the cash (more time wasted), you have to hope you don't lose it/misplace it.

It's 2019, there are so many options to accept rent payment instead of cash.

Kyle Bruns · Answer

You could get a deposit only card to give to your tenants. Then they should be able to take their cash to any ATM that accepts cash deposits. I personally haven't used this service, but I think BOA offers this card.

Dennis M. · Answer

nothing wrong with collecting cash imho

Megan Greathouse · Answer

Thanks, @Rachel Foster... if I'm already using a a property management system, could I use Tellus just for cash payments? I just got set up with TenantCloud, so I'd prefer not to switch altogether. But if Tellus has a way to allow cash paying tenants to pay at physical locations, I'd be interested in that feature alone!

Hands off option to collect rent from cash-paying tenants?

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