How You Should (and Shouldn’t) Accept Rent Payments

It’s the first of the month, and it’s time to collect the rent. But what is the best way to go about collecting rent payments? There are many methods, and some are better than others. Here are a few ways landlords can accept rent money.

Rent Checks

Rent checks are about as old-fashioned as it gets. The concept is simple — the tenant writes out a check made out to the landlord and transfers it appropriately.

• P.O. Box

When using a post office box, the landlord must understand that the check may be received a few days later if the tenant mails it on the 1st of the month. To give tenants some peace of mind, some landlords give tenants a three to five day grace period to allow the check to get there on time.

• Deposit it into Landlord’s Bank Account

Landlords can provide their bank account numbers to tenants who want to deposit their checks directly into their landlords’ accounts. It may take a few days for the money to go through, but the deposit is documented and the tenants are provided with a receipt from the bank as proof of payment.

• Leasing Company Drop Off

Landlords who work for a leasing agency could allow tenants to drop off rent checks directly. It’s a good idea to have a secure dropbox outside of the building for tenants who aren’t able to drop off their check during normal business hours. When the checks are received, most banks apps allow checks to be deposited by taking a picture of the checks.

Online

Online rent transfers may be the most convenient way of payment transfers for both landlords and tenants.

• Real estate investing superapps like Tellus make it easy and convenient for both parties free of charge. Landlords and tenants simply enter in their bank account information to begin. Setting up autopayments ensures that rent is paid on time every time. If there are multiple tenants in one rental unit, Tellus lets each person pay their own share.
• Venmo

Venmo is an easy way to transfer money to someone. Money goes directly from one account to another. People can also use their credit or debit with a small processing fee. Venmo users must be careful that they’re sending the money to the correct user. One small typo could make @JimWilliams $500 richer for having a similar handle as @KimWillams (the actual landlord). There’s no guarantee Jim will be nice enough to send it back.

Cash and Why You Should Not Accept it

Cash payment may seem like a simple and to-the-point way of accepting rent, but it is the riskiest. While accepting cash for rent is not illegal, it is not a wise method.

• Lost or Stolen

Opposed to digital transfers, cash is physical. When accepting cash, landlords run the risk of misplacing the money or the possibility of it getting stolen. If someone steals physical money, then one can assume that they’re never getting it back. Money stolen from a bank account would most likely be covered if reported in a timely manner.

• No Proof of Payment

Keeping records is extremely important in all aspects of being a landlord. When tenants pay in cash, the landlord can only rely on memory to remember if they paid rent. Landlords must give the tenant some sort of written receipt and also keep records for themselves.

• Inconvenience

Landlords are responsible for counting the cash to make sure it’s all there, and then depositing it at the bank. Online payments or rent checks could easily cut out the inconvenience of cash.

Final Thoughts

There are various options for collecting rent, and there’s no right or wrong way (except cash). Test a few of them out, and pick the method that you find to be the most convenient.