Collecting rent from tenants who don't have bank accounts

How do you collect rent? Hopefully not by waiting for it to arrive in the mail! Payment by mail is time-consuming and causes problems. Once you receive it, then you have to take the time to deposit it. Or say the payment arrives late but you can’t read the post-marked date on the envelope. Do you charge a late fee or believe them? Or worse, if you have a bad tenant, they tell you rent was sent in the mail only to have you checking for days and holding off on filing those rent court papers!

Credit: www.QuickMeme.com

If you’re investing in a C-class area, you’ll notice that many of your tenants may not have bank accounts. In addition, several of them may not have internet access or be internet savvy to pay bills online. So what are some ways around this?

Direct deposit into your bank

The first option is to have them deposit their rent directly into your bank account. You’d need to set up a bank that has branches convenient to your rental properties. You’ll see the deposits online quickly and they will receive a receipt! Very easy and you didn’t have to do a thing. If you have several rentals, try to have a different rent amount for each one, even if the difference is a dollar. This way you can easily tell who paid. A second idea is to have them put their address on the deposit slip.

PayNearMe.com

This is a wonderful service that the tenant can pay at a nearby 7-11, Family Dollar, or ACE cash express. They simply bring cash to one of these locations and pay it, along with a $3.99 fee, to the desk clerk. Once the transaction is complete, you are instantly emailed a notification of the rent amount paid and tenant’s name. The funds usually clear into your bank account within 2-3 business days. The tenant also receives a receipt. The trick is just to get set up first and be sure you can receive payments, and then you’re ready to go! Most of my tenants use this service and it’s made my life very easy! You can read more about the service here: PayNearMe

Online Payments
For your internet-savvy and bank-account owning tenants, there are tons of online payment systems out there, but here is my favorite. Intuit is an online payment system with low fees. To receive a bank payment, it only costs you .50 cents. However, to receive a credit card payment, the fee is 3.25%. I suggest that you turn this option off. You are instantly notified of the payment and it usually clears into your bank account within 1-2 business days. Here’s more details: Intuit

Finally, another option online could be PayPal. We have received rental payments from our live-in tenants before with no problems. There is no fee if the tenant sends the payment to “family and friends”. See PayPal

So, no more waiting for the mail! Even tenants without bank accounts and internet can pay electronically!