Electronic Payment System - Landlording

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
roamin survivor
Posts: 121
Joined: Fri Nov 20, 2009 5:32 pm

Electronic Payment System - Landlording

Post by roamin survivor »

So my tenants are asking about some sort of electronic payment system for the rent. This may be convenient as I may be relocating out of the area/state, though having a paper trail was nice. In any case, for any landlords out there that do electronic payment, what would be the best option? I'm thinking just having them do bank transfers, as Paypal will have fees associated with the transfers. On the other hand, something like Paypal would have some sort of trail when tax season rolls around and this will be the first time I'm declaring rental income.
BuckyBadger
Posts: 1192
Joined: Tue Nov 01, 2011 11:28 am

Re: Electronic Payment System - Landlording

Post by BuckyBadger »

Paypal has no fees if you go from a checking account to a checking account -- at least as long as you don't have a business account. (As far as I know.)

I use Paypal to repay friends for splitting meals, for paying my dad back for supplies when he fixes something at my house (only his labor is free!) and I've used it to pay back roommates for my half of utility payments. Once I borrowed $5k from my dad and paid him back on Paypal. No fees were charged for any of this.
sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: Electronic Payment System - Landlording

Post by sscritic »

Ask a bank other than your own how they would handle a bill-pay entry from one of their customers who wanted to pay you. See what they would require.

I can pay anyone from my large bank bill-pay, but that may result in a check being mailed (not what you want) if the recipient isn't set up. On the other hand, my apartment building just changed hands. The new owners said that I should enter the name and address of the apartment in the bill-pay and gave me an account number to use (just like a credit card account number, it was my account number on their records, a number that included my apartment number as part of the sequence). The apartment did not show up in the bank's list of known payees, so I thought a mailed check was in the cards. Nope, they got the electronic payment the same day the money was taken out of my account, two days after I entered the payment on-line.

So ask another bank (it wouldn't hurt to ask yours as well) how their bill-pay works.
jimmyrules712
Posts: 640
Joined: Thu Jan 06, 2011 11:36 pm

Re: Electronic Payment System - Landlording

Post by jimmyrules712 »

Paypal and Amazon Payments are possibilities.

You may also want to look at www.popmoney.com. I use a bank that has the popmoney service embedded into their site, but it looks like you can use it without a specific bank account.
User avatar
interplanetjanet
Posts: 2226
Joined: Mon Jan 24, 2011 4:52 pm
Location: the wilds of central California

Re: Electronic Payment System - Landlording

Post by interplanetjanet »

If your tenants use USAA for banking (which anyone can do) they can do a free ACH push to your account, no matter what bank it's at. I pay my rent this way. Payment clears next-day.

Many banks allow bank transfers between their own customers, so if you have an account at the same bank that they do that may work.

Otherwise, the bill pay solution sounds cleanest. You may get paper checks until things are completely set up for electronic payment.

-janet
User avatar
Jay69
Posts: 1801
Joined: Thu Feb 17, 2011 9:42 pm

Re: Electronic Payment System - Landlording

Post by Jay69 »

For my Kids gym I pay online thru my banks bill pay system to a gym that has nothing set up.

I have the gym set up as a payee and the bank just sends them a paper check, cost me nothing.

This may be a option, it does take the bank something like 5 days to process it but it works well for me.

I really hate dealing with checks, much eaiser for me to track if done electronic style.
"Out of clutter, find simplicity” Albert Einstein
User avatar
interplanetjanet
Posts: 2226
Joined: Mon Jan 24, 2011 4:52 pm
Location: the wilds of central California

Re: Electronic Payment System - Landlording

Post by interplanetjanet »

Jay69 wrote:I really hate dealing with checks, much eaiser for me to track if done electronic style.
Same - I hate not knowing when they're going to clear, so I've developed a tiered system that makes it easy for me to see what is outstanding and keeps checks away from my "main" account.

I have three "checking" accounts, but only one of them is ever used to write (or receive) checks. Another is "debit only", and the third is "ACH only" (for direct deposits/debits). Normally the checking and debit accounts sit with a small balance and the ACH account receives my direct deposits and handles ACH based payments that clear immediately (or within a day). When I write a check, I transfer the amount of the check from the ACH account to the checking account, and when I do an ATM withdrawal or debit payment, I transfer money to that account instead. This lets me see at a glance if there are any checks outstanding just by looking at the balance. I never have to explicitly "balance" a checkbook as I just check off the stubs in my register as they clear and the funds will always be there.

It sounds like extra work but it's really not, especially if you only write a few checks a month (and mostly write them at home where you can transfer the money at the same time as writing the check). I use USAA as a bank which has no minimum balances or activity requirements, so there's no cost for having the extra accounts.

I pay for as much as I can with credit cards (paid in full), but sometimes you still need to write a check. Only in America...

-janet
FinanceIsFun(ds)
Posts: 10
Joined: Tue Dec 28, 2010 11:00 am

Re: Electronic Payment System - Landlording

Post by FinanceIsFun(ds) »

I use http://www.rentmatic.com. My tenants have different bank accounts than I do, so a transfer didn't seem to be realistic. They charge $3.95 per transaction, which is much lower than some of the other EFT services out there. There is more value add than just the electronic payments. You can keep lease documents stored, property photos, applications, rent history, etc. Also you can communicate with your tenants and have all email correspondence in one place. I've been using it about 6 months and have been very pleased with the results.

Good luck!
Ben
Sidney
Posts: 6753
Joined: Thu Mar 08, 2007 6:06 pm

Re: Electronic Payment System - Landlording

Post by Sidney »

Jay69 wrote:I really hate dealing with checks, much eaiser for me to track if done electronic style.
Some day, probably not in my lifetime, the US will join (most of) the rest of the developed world and get rid of checks.
I always wanted to be a procrastinator.
RedJones
Posts: 72
Joined: Sat Nov 12, 2011 1:39 am

Re: Electronic Payment System - Landlording

Post by RedJones »

dwolla.com lets you transfer for a total fixed cost of 25 cents to each party. They do ACH transactions for you. Can use any bank.
leonard
Posts: 5993
Joined: Wed Feb 21, 2007 11:56 am

Re: Electronic Payment System - Landlording

Post by leonard »

roamin survivor wrote:So my tenants are asking about some sort of electronic payment system for the rent. This may be convenient as I may be relocating out of the area/state, though having a paper trail was nice. In any case, for any landlords out there that do electronic payment, what would be the best option? I'm thinking just having them do bank transfers, as Paypal will have fees associated with the transfers. On the other hand, something like Paypal would have some sort of trail when tax season rolls around and this will be the first time I'm declaring rental income.
Go ahead and give them a pack of envelopes addressed to you and a book of stamps. "Convenience" problem solved. If they aren't competent enough to make out a check and get it in the mail on time, I wouldn't renew their lease. This really makes it easy for them and it adresses your need for a paper trail.
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
rogermexico
Posts: 161
Joined: Tue Jan 08, 2008 5:58 pm

Re: Electronic Payment System - Landlording

Post by rogermexico »

Tenant would probably want to use the on-line bill pay at their bank. How it works after that seems to be very bank dependent. My local bank's checking account does not accept such electronic transfers, which would then necessitate the tenant's bill pay service generating a physical check mailed to you which you then deposit. Not a great improvement although it would be automated so tenant wouldn't forget. However my online bank's savings account does accept electronic transfers. Even then it's not straightforward as the tenant's bank will either do straight electronic transfers or might use the issue a physical check method, depending on the volume of transfers between the tenant's bank and yours.
Post Reply