All Forum Posts by: Elford Stephens

@Elford Stephens if she wants to keep records she still can. It's just safer if she pays on line. It's a risk factor if anything is mailed. Paying online is fast simple and I'm sure she'll receive a confirmation email of payment.

Hi @Elford Stephens ,

For our tenants that do not have bank accounts, we suggest that they take a look at Simplebank.com (no affiliation). We like Simplebank because they do not charge  fees like most of the pre-paid debit cards and provide more complete services. However, Simplebank is an online bank, not a payment processor service.

Netspend is a pre-paid debit card that can be used in lieu of a bank account for ACH debit transactions required by our payment processor. We don't recommend it due to pretty high fees compared to Simplebank. 

We use Buildium for our property management software and they provide for online rent payments via a third-party payment processor, Forte payment systems.  Buildium allows our tenants to pay by ACH debit which requires an account number and a routing number for fifty cents (.50) or by credit card with a fee (2.75%). One of the really nice things about Buildium is that our accounting entries are done automatically for payments made online.

Paynearme.com is a cash payment system that lets your tenants pay rent in cash at a network of stores and then you receive the money electronically. I don't think they are directly serving small landlords at this time; the service just became available to Buildium clients and it is nicely integrated with the Buildium accounting software. The tenant pays $3.99 for the paynearme service. Buildium might be overkill for one property but if you are planning on scaling up pretty quickly we recommend it; it has been a big help to us. (No affiliation other than as customer)

All of my tenants pay me via Venmo or PayPal. Works like a charm, although PayPal takes 24 hours to transfer into my bank account.

I had this exact situation recently. I inherited a tenant who doesn't have a bank account and used to pay rent via money orders. After asking around, the best solution I found was to simply have them deposit the money order into my bank account directly at the bank. It's safe, secure, and most importantly simple for the tenant. Sure, it's not as ideal as an ACH transfer but it's better than cash, checks, prepaid cards, or anything involving the mail.

Note: Paynearme and Propertyware do allow cash deposits but have minimum usage amounts that are untenable for a landlord with only a few tenants.

@Elford Stephens I just acquired an inherited tenant with my third property last week who is used to paying with money orders for the past 12 years. I'm out of state and told her that it's not recommended to mail a money order because it can get lost in the mail and no one can get it back. I gave her a few options: 1) Use cozy.co, 2) use Zelle from her Wells Fargo bank directly to my Chase bank, or 3) deposit the money directly into my Chase bank. Just tell them that you definitely cannot accept cash payments because there would be no record of this, and that you do not accept checks or money orders. All monthly rents must be paid online via Cozy or some other online payment system. I had one tenant that ended up asking if she can use Venmo and I said yes. Whatever makes it easier and it's all electronic and free for me so it's fine. Just make it sound like you have a process in place, these are the rules and they have to follow them if they want to stay in your property. Best of luck!!

The only time I MAY consider lowering my criteria and accepting other payment methods than electronic means is for the baby boomers and above generation if they require it upfront.  Enforcing them using electronic systems may stress them enough to look somewhere else than my property. 

Elford, 

   Is the tenant residing in the same city as you are? I was concerned about this as well.. when i purchase my first property.  If the tenant is older or is not willing to pay electronically.. what's the plan? I can see how it would be necessary to receive it electronically if you reside in another city.. but how much of a headache would it be to go pick it up? Or have someone pick it up for you? I'm creating a gameplan for myself by inquiring. 

@Elford Stephens how difficult it may or may not be will really depend on the class of tenant at your property. In my case, I had zero issues when I switched all 20 or so tenants to electronic payments at the same time a few years ago. Tell the tenants how the new system will be better for them in terms of money/time savings and convenience factor. One tenant continued to make her deposit directly at my bank simply because she did not have internet at the time. 

I used the payment systems through Buildium which is pretty straight forward. Send your tenants a PDF guide showing them how easy your electronic rent payment system will be. They can even set up recurring payments so they won't miss another rent payment. 

We insist that all payment be made online. We set up a buildium account for each tenant if the tenant doesn't want to sign on and use it we have an ACH permission form and we set it up for them. 

Some of the prepaid debit cards are capable of ACH debit transactions (netspend). A lot of "unbanked" people like and use these cards but they are such a bad deal that the federal goverment negotiated a deal with a bank for the "Direct Express" card for the receipt of government benefits but unfortunately it DOES NOT permit ACH debit transactions. We tell tenants that don't have a bank account or ACH debit capable card about simplebank.com, a no fee online bank that we like but it's up to the tenant to get it done... and we do insist that it be done. We are working on getting paynearme set up through Buildium and then tenants will be able to pay cash at 7-11 and ace and we'll still get our money electronically (with all accounting entries done).