If you collect rent, how does a tenant pay you?

[crazyforlatin]

I've researched a few options such as Paypal, cozy.co, and bank to bank electronic transfer. Are there are other ways besides bill pay or physical checks? I would prefer automatic electronic payments (tenants would like this), but I'm not sure online sites such as cozy.co will last long enough.

 

Any experiences? 

 

 

[Noreen Claire]

We rent out two condos (neither of which we've been able to sell, we don't want to be landlords).

 

Tenant #1 (my old home) pays with bank check that is dropped off in my mail slot the day it is due (15th of each month).

 

Tenant #2 (husband's old home) requires multiple text messages/phone calls/emails to remind him that the rent is past due. When he finally shows up, he pays with a starter check, usually post-dated. Last time it bounced.  :cursing:

[StephanieZ]

I use cozy. It's awesome. Free for both ends so long as the renter sets it up to debit from a bank. (They would pay some fee if they used a credit card.) Love that the renter can set it up to auto-pay. Both my tenants that pay with cozy set that up, so their rent comes in like clockwork. 

 

Only down side of cozy is the 5-7 day "float" between when the renter pays and when it comes into my actual bank account. I am in no big rush for rent, so, to me, that's a small price to pay for ease of fee-free and pain-free rent collection. 

 

Been using it about a year, so far, so good. Love it.

 

One tenant paid a year up front, and they paid by check. 

 

 

 

 

[creekland]

We get physical checks or money orders (almost always checks) mailed to us.  Only once did one bounce (and the tenants quickly made it right), so we're happy with it.  They've never asked for anything else, so can't say I've checked into any other possibilities. 

[crazyforlatin]

I use cozy. It's awesome. Free for both ends so long as the renter sets it up to debit from a bank. (They would pay some fee if they used a credit card.) Love that the renter can set it up to auto-pay. Both my tenants that pay with cozy set that up, so their rent comes in like clockwork. 

 

Only down side of cozy is the 5-7 day "float" between when the renter pays and when it comes into my actual bank account. I am in no big rush for rent, so, to me, that's a small price to pay for ease of fee-free and pain-free rent collection. 

 

Been using it about a year, so far, so good. Love it.

 

One tenant paid a year up front, and they paid by check. 

 

Thanks, this is very helpful. I just found tenantcloud.com. They both have pros and cons, but I just need something that is free, easy to use, and automatic. I've emailed cozy customer service a few times already, and they've responded within an hour. I remember there was another site a couple of years ago that closed down. I never used the site - it was just something I noticed. Anyway, that's what worries me, site just closing down. But then we just switch, right?  So the rent is entered into cozy as pending/paid, but it's really our bank that receives it, correct? 

[Ravin]

My landlord has us deposit check directly to his bank account. One of these days I need to figure out how to do that electronically.

[StephanieZ]

Thanks, this is very helpful. I just found tenantcloud.com. They both have pros and cons, but I just need something that is free, easy to use, and automatic. I've emailed cozy customer service a few times already, and they've responded within an hour. I remember there was another site a couple of years ago that closed down. I never used the site - it was just something I noticed. Anyway, that's what worries me, site just closing down. But then we just switch, right?  So the rent is entered into cozy as pending/paid, but it's really our bank that receives it, correct? 

 

Yup. You link up the bank account where you want deposits to go. You get notices in Cozy (and an email) when a payment is made to your Cozy account, but it takes a bit less than a week for the $$ to appear in your checking account. (I believe that's how they make much of their money -- the float.)

[crazyforlatin]

My landlord has us deposit check directly to his bank account. One of these days I need to figure out how to do that electronically.

If you have online access to your account, there is an option to transfer money from one bank to another bank via ACH which is free. It still takes 3 or so days to clear.

 

It's just that everything is supposed to be easier for us given new technology and smart phones, so one less chore would be nice.

[crazyforlatin]

Yup. You link up the bank account where you want deposits to go. You get notices in Cozy (and an email) when a payment is made to your Cozy account, but it takes a bit less than a week for the $$ to appear in your checking account. (I believe that's how they make much of their money -- the float.)

Thanks, I'll go with cozy then. They also make money through credit checks, I think. I didn't use it.

[Laura Corin]

In the UK: direct deposit into our bank account. Husband watches out for the deposits.

[EmseB]

We transfer money directly to our landlord's account.  We set it up with our bank with his checking account number and routing number. What is the advantage to using a middle man?

[Ravi B]

Thanks, I'll go with cozy then. They also make money through credit checks, I think. I didn't use it.

I've used Cozy for more than a year.  I agree with Stephanie: it makes rent collection easy and automatic for you and the tenant.

 

[StephanieZ]

We transfer money directly to our landlord's account.  We set it up with our bank with his checking account number and routing number. What is the advantage to using a middle man?

 

As a landlord, there are some risks and disadvantages in giving out your banking info.

 

Some states don't allow to evict someone for failure to pay rent if you accept partial payment. So, you deposit $50 instead of $500, and I can't evict. . . (Same issue could come up with cozy, but I could easily cancel your lease in cozy, stopping you from paying that way . . . That's a WHOLE lot easier than closing my bank account!) This is one benefit of requiring a paper check -- the landlord can easily choose not to deposit/accept it if it's not full (or fails to cover late fees/etc.)

 

Also, if you have several renters that pay the same amount each month, it could be a big hassle to figure out whose deposit is whose (if one is late or absent). In general, I can't view deposited checks, so your note line won't be visible for me on my end. Landlords who use this technique generally set each tenant to have somewhat different rent (so, $505 for the Jones family, $515 for the Millers, etc) just to tell what's what. I do have two tenants with identical rent amounts, so that's be a pain for me.

 

 

And, as you probably know, it is pretty easy to steal money from someone's checking account w/ just the same info you need to do a wire transfer INTO the account. Of course, this is the case any time you give out a check . . . But, frankly, I almost never write checks from my real estate company's account. I pay bills online . . . I have maybe written 10 checks, ever, and most of them were the first month or two of ownership and were related to inspections/etc before I had all my online banking figured out for that company. So, my tenants never see my bank account info. 

 

In general, the cozy payments are just clean and easy to keep track of, to me. Once I got it set up, I never had to worry about it again! I like that!!

[creekland]

I'll admit the risk of hackers is one reason I'd rather not use cozy or any other online system.  I prefer the good old fashioned check, money order, or cash.  Too many companies thought they were safe and secure.

 

But that's just my thinking - perhaps old and outdated or too overly worried or something - who knows?  We don't use our direct bank account for much.  We tend to use cash or credit cards - checks occasionally (like to church).  I pay our credit cards online, but I trust they'll make right anything that goes wrong just like they do when someone illegally uses our credit card.

[Ravin]

If you have online access to your account, there is an option to transfer money from one bank to another bank via ACH which is free. It still takes 3 or so days to clear.

 

It's just that everything is supposed to be easier for us given new technology and smart phones, so one less chore would be nice.

 

Yes, I sat down and figured this out yesterday. I will test it out with April rent. We were nearly late last time because I write the check, and I work an hour and a half from the nearest Chase bank (where Landlord's account is). Usually if rent was due after payday and before weekend, I would leave the check with DH (there is a Chase bank across the street from our townhouse complex), but I forgot to do that so I had to cut out of work early to make it to the bank before it closed on Friday the 3rd (it's not late if it's deposited on the 3rd, but that's really to account for weekends, not because it isn't due on the 1st).

 

DH doesn't even have paper checks, so transferring him the money wasn't an option.

 

Now, I won't need paper checks either, though I may still occasionally use them for this or that (mostly at kids' schools or scouts).

Edited March 23, 2017 by Ravin

[LMV]

We have multiple rental properties currently. My husband's law firm processes all rent for us (and yes we personally pay a fee to his law firm for this service every month) so they accept checks, credit card/debit card payments, and will set up EFT/direct deposit transactions for tenants. Our tenants receive rent discounts for having direct deposit and or having rent received before the first of the month. They pay late fees if rent is received on or after the fifth of the month.

[Guest]

Since we are on the same general area, we just go to his bank and deposit a check into his account. We put the info for the payment in the memo line, and they send him a receipt. He appreciates it, and I know that he won't forget to deposit the check. (He runs a business and has forgotten, thus our current set up.)