If you’re a landlord or you’re going to become a landlord in the future, it’ll serve you well to learn how you can accept electronic rent payments. As you probably know, many people don’t care to write checks anymore and the days of landlords showing up at tenants’ doors are long gone. But beware, some options are good, and others can lead to large headaches.
Electronic rent payments
If you’re interested in having a tenant directly deposit their rent into your banking account, the process is quite simple. In fact, many landlords and apartment complexes now arrange direct rent payments through automatic withdrawals from the tenant’s bank account or having the tenant direct deposit into the landlord’s account. These are wonderful options for those landlord’s that may live out of town.
If you’re interested in accepting electronic rent payments, please consider the following before you decide on how to accept electronic payments:
Automatic withdrawal
This is probably the best way to go, as it’s a great method to have the rent payment automatically transferred from the tenant’s account into yours. With this method, you’re more likely to receive rent payments on time unless the tenant is overdrawn. This method is probably the favorite of most landlords due to being able to set it up automatically and not having to do anything else to get the rent payments.
Direct deposits
A landlord can give the tenant their banking information and that tenant can directly deposit funds into their account. This is not usually the preferred way to accept rent payments, as there are some risks involved. Not every tenant is trustable to furnish banking information with, especially with the amount of fraud these days. You can always talk to your bank to see just how secure your information is, should you want to give your tenant your banking information.
Also, should your tenant fall behind on payments and you need to evict them, some states will essentially invalidate the eviction if that tenant makes just a small payment like $10. This is coined as “partial rent” and can become frustrating for landlords having to restart the eviction process. Check your state laws regarding how this is handled.
PayPal
PayPal is an online payment venue that is very popular with businesses all over the world. It’s a web-based electronic payment system that keeps your banking information safe. Renters simply set up their own PayPal account, link it to their banking information, and send you payment through PayPal. All they need is your email to send you payment.
Be aware, there are fees associated with receiving funds in PayPal, usually a 6 percent processing fee for business transactions.
Check out these various ways to accept electronic rent payments and decide what will work best for you. The good news is that you can try one way and if you aren’t pleased with that way, try something different. In this day and age, receiving rent payments online is easy and can save you time.
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