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I actually set up my own "auto-pay" to my apartment landlord and my parking space landlord. My bank (Fidelity) mails my check for me closet to the end of the month, after emailing me an alert to let me know it is about to be sent. My landlord likes this consistency very much, and it makes me appear like an organized and reliable tenant that they want to keep.
I have a online bill pay that my tenants can use if they wish. One used it the rest pay cash or check. But it doesn't charge me fees as if I were to take a payment on a CC. I don't have a issue with taking a online payment. I just don't feel like paying fees for the "convenience." I'll gladly be inconvenienced for a hour if it means 150-200 in my pocket while I run to the bank and make a deposit.
Looking at my statement is appears I'm being charged 2.35% per transaction plus 30 cents... this is for visa, american express, discover and mastercard. Way too expensive, I will try to see if I can get better rates because those are ridiculous when processing larger dollar amounts.
So if one of my tenants were paying $3,000/month that would cost me about $70 for the transaction. Suddenly this auto pay isn't looking as attractive! Especially if someone has numerous tenants. I will have to investigate this further and see what costs are involved in setting up a monthly auto checking account draft. Anyone here know?
Must find better solution than having tenants manually mail checks. If I were a tenant myself I would much prefer to have it set on auto pay.
Some of these have a daily limit on the transfer and the transfers are reversible which can cause a cascade of headaches.
Before I bought my house (around 2 years ago) the apartments I was staying at offered a monthly program to have your account billed. We signed up immediately because they were a reasonable apartment company and we trusted them. The apartments we were at before that had some program like that, but we didn't sign up in over 4 years because they were scummy pieces of **** and there was no way they were going to be permitted to access our checking account in any manner other than a non-negotiable order (a check).
If our apartments took credit cards, I would've been happy to do that, since I could refuse any charges that were incorrect. For residents that pay their bills on time, autodraft is wonderful. It's also a clear indication of whom you want to do business with, because it simply isn't worth having residents that might not pay.
Checks do not simply bounce. That's like saying "what if a car filled with clowns and machine guns broke down in front of your house..." If someone is bouncing checks, they have completely and utterly failed at managing their banking. There is a feature called "overdraft protect", or some similar name, and every bank/credit union that isn't trash offers it for free. If yours doesn't, tough luck, it is trash. Under that program they will access your other accounts (even a credit card) to get the funds to pay the check. Then, they WONT CHARGE you any BS fees. You only pay the original amount. If you have NO money saved in the bank, you should consider living with parents or relatives or friends while getting a reasonable emergency cushion.
In short, use autodraft. Don't bill a credit card. Find a reason to deny renters that you don't expect to pay rent, because those aren't renters.
If your tenants wanted to they could avoid writing checks by doing online bill pay themselves through their bank or credit union. From what I remember though, it's not EFT it is just the bank mailing you a check.
If you have a common bank in the rental state you can have them direct deposit the check into your account like some landlords do in FLORIDA but I hate that system. My kid had to do that every month SCHLEP to the bank and deposit the money but OH WELL, he agreed to it.
There is no significantly FREE or CHEAPER online card/cash processing company.
I have a business and we'd all be using it if it existed.
And your rentals are BUSINESSES. You cannot use PayPal "send money" person to person because it's a business. So you'll potentially get a tax avoidance claim from the IRS (even though it's not the "same" as selling goods or services).
You realize that a credit card can be disputed, right?
Would you be willing to pay an extra 3% over your rent to do it?
I'm not, ever, paying the premium for the landlord to be assured the money is coming in and not having to deal with cashing the checks. I bought my own house and fortunately never have to deal with an ***hat landlord again. It is possible for the tenant to set up a monthly recurring payment to a different account with no fees. I know that also, I used such a deal when I had a family member cover a monthly expense for me. I simply set up my bank account to pay them the money that would be due on the first of each month. No fee for me, no fee for them.
PS. I went to a college that charged a 3 dollar "convenience fee" to pay online with a credit card. I still despise that college that I went to for my undergrad, because that fee says everything there is to say about the school. I lived by campus. I gave the college exactly what it deserved. I walked my butt down to their office, wasted their employees time for several minutes, and then had them charge it to my credit card. There was no fee for using the credit card, but instead of me and the college both saving time by me paying online, I ensured they had to waste their resources to process the payment since they were so arrogant they felt they should charge a fee for people using an online system that saved them labor costs. I didn't ask to receive part of their saved labor costs, but they wanted to make sure to stick it to me. Don't spit on the customers, literally or figuratively.
I could always have the tenant sign an agreement they must setup auto pay to have the funds deposited into my account.
I don't believe you can legally impose that demand on a tenant.
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