How are you collecting rent from tenants?

Still receiving checks in the mail? Or do you have an automated payment process in place?

I have asked around.... friends, colleagues, and acquaintances and want to share what I have learned and started using as an EASY and FREE solution for collecting ACH rent payments from tenants.

Will your tenants pay ACH?

Depending on the age and demographic of your tenants, paying by ACH might not be an option.  We may likely always have tenants that prefer to pay via check.  

Collecting checks, delayed payments, depositing and recording of checks takes TIME out of your business and life. 

...and then we have insufficient funds and returned check fees to add that just adds on frustration, fees and more time to resolve.

Making rent payments easy for tenants

I was recently on the hunt for a perfect solution that didn't charge me 3% fees for collecting rent payments.  

It had to be easy to use for me as the landlord...and easy to use for my tenants.

Was there a perfect solution?

Venmo may have worked in the past, but....

Venmo may have worked in the past, but if you haven't read my article on using personal Venmo accounts for business transactions, it's worth a read to keep you out of IRS hot water!

"Venmo for business. If you use it, know what's coming!"

Fees are coming, business use is on the IRS radar and you may receive a 1099-K at year-end.

Bank-to-bank transfer

An ideal rent payment is a bank-to-bank transfer... note I am NOT recommending handing out your routing and bank number to your tenants.

So what is the solution?

I was recommended to use Zelle for this as it connects banks. 

Literally, the day before my rent was due, Zelle sent me an email saying they had changed their limitations and transactions could no longer exceed $1,000. 

In today's rental market, this simply doesn't work.

I knew there is a solution.... so I kept looking.

Apartments.com is a breeze and does it all

In a conversation with a good friend of mine, who happens to be an awesome realtor and real estate attorney, I asked her what she used.  

And that's when I learned about Apartments.com.  Apparently, the rent collection feature was under a different name and consolidated into Apartments.com during a buyout/merger.

I don't have an apartment, so I wouldn't have thought to go there, but... 

But... this is a good one, so keep reading!

I created a FREE account in less than 5 minutes and sent an email to my tenants. Within 10 minutes, they had scheduled monthly ACH rent payments direct to me for the remainder of our lease!

They said it was a breeze, and it made my life simpler!

What's the catch?

Ok, call me a pessimist. But free? What's the catch? 

You don't get your money immediately.  In fact it can take 5 days to hit your account.  

They make their money off the float.  So, if setting this up, keep that in mind. 

Collect rent with a buffer so that the rent hits your bank before the mortgage payment is taken out.

Stay above board?

How do you stay above board? Track your ins and outs from your rentals and issue 1099s for non-incorporated service providers you pay more than $600/year.  

Need help setting up QuickBooks Online, let us know!

We work with QuickBooks Online for clients, but if you are a do-it-yourself 'er, you need to know about WaveApps. WaveApps is also a FREE online accounting software that works great for tracking your rental transactions.  Apartments.com and Stessa also have transaction tracking built in. 

Sometimes...a spreadsheet works best.

Keep receipts and books for your rentals and report all your income, keep it simple and use what works for you.

What are you using to collect rent?

What do you use? In my search, did I miss another solution that works better, just as well or similarly?  Comment below and let us know. 

Let's work smarter and live harder together!