Investor · Atlanta, GA · Member since 2012 · 408 posts · 37 votes
Many people are against collecting rent by credit card because of the fees, as low as 2.9% + $0.30. Landlords would love to push these fees onto tenants, and vice-versa.
But given that so many tenants make payments a bit late, would you be willing to have a more steady cash flow for a 3% charge? The cash flow would be steady because even if the tenant is waiting for his paycheck in 2 weeks, he can still pay by credit card.
Is your answer different if you are a solo landlord or are using a property management company?
If 2.9% was too high for you, would you be willing to split the charge with the tenant?
We are self-managing our properties right now, and sometimes spend close to $30 in gas to collect rent.
The virtues of checking account direct deposit are obvious, but a large percentage of rent is collected otherwise: cash, mailed check, check in dropbox.
I'm not opposed to accepting credit card payments for rent, but I think there are better solutions to your problem. I switched from picking up the money at the house to the tenant depositing the money in the bank. Works like a charm. I send them a bill every month with a pre-filled deposit slip. I notified them in writing that they are responsible for deposting the money whether I send them the bill or not and that that the pre-filled deposit slip is only a courtesy. I like to send it to remind them anyways.
Also, people have been getting paid bi-weekly for ages and have managed to figure out how to pay rent on time. No need to accomodate something that historically does not require accomodating. A late fee here and there will help them prioritize their rent.
I have never had the situation arise, quite frankly, so never had to explore this option. Rents come in on time with my tenants - they've been advised that this is required.
I have to say that tenants who have a hard time making payments might have a hard time even getting a credit card, and I would imagine that many don't even have one.
Accepting credit cards for rent on a regular basis is kind of like "kicking the can down the road" - they will dig themselves into a financial hole from which they might not be able to escape.
Accepting credit cards for rent on a regular basis is kind of like "kicking the can down the road" - they will dig themselves into a financial hole from which they might not be able to escape.
If you ever visit FatWallet.com, you'll meet people that love using their credit cards to get points and make sure to always pay on time. I'm sure the same for many here at Bigger Pockets who might pay rent by CC if given the chance.
I have most of my tenants use www.erentpayment.com, very convenient for all of us and I don't have to track who paid what when. It automatically adds the late fee too. It's $3 per transaction, far cheaper than a credit card fee, and I pay it.
For the 2 tenants I have that don't "trust" online payment, they go to the bank every month and deposit the rent into my business account. I've never taken checks or anything by mail.
My tenants have the option of mailing check or money order to me or paying online by ACH. The ACH transactions cost a few dollars which I pay. I am working on adding credit card payments as an option because several of my tenants have the prepaid cards that their pay is direct deposited to and they have requested this payment option. For credit card payments, the tenant will pay the convenience charge because it is expensive and the tenant gets the most benefit.