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I'm new to this forum and was curious about an issue. I apologize if this is a "silly" question, but I am curious for those who have rental properties..... does anyone here have their tenants enrolled in auto pay monthly via credit card or echeck?
I have an existing business where I have customers being billed automatically every month via credit card. It just makes life so much easier rather than having to deal with customers who do not pay on time etc. It would drive me crazy having to police these customers in regards to payment. Thus, my billing system handles everything on auto pilot and immediately notifies me if someone is past due, declined etc. This billing system works so well for my current business, so I was hoping this could also be applied to tenants?
Would there be any downside to having tenants enrolled in auto pay as described? I myself cannot stand writing checks every month and have all my bills paid on auto billing.
One issue would be that the merchant that handles your current credit card billing system will have to approve this type of payment. They may not agree to it. And no, I wouldn't be screwing around with trying to hide it, figuring that they would never figure it out. Why? Because IF you get caught, you're gonna lose the ability to get paid via cc for that other business you have. Too much of a risk.
I also do not believe that you could demand the tenant set this up for auto pay via their cc or autopay on their checking. You COULD offer a discount if they do set it up - and most people could do that by autopay from their checking accounts.
I currently rent a garage spot from a nearby apartment complex. The LL requires online payment, and auto-pay is an option. The system works with either checking account info or CC. quite frankly I strongly prefer this, and I also hate the hassle of making out and mailing checks.
As a renter I don't see a downside, and obviously the LL doesn't either or it wouldn't be the only form of payment accepted. I know you're looking for LLs to chime in, but I certainly appreciate it as a tenant.
I already have a DBA account and a merchant account, since I use it for my other business to process online payments. I also called my merchant provider and there would be no problems whatsoever if I wanted to open another DBA account and start processing online payments from tenants.
I'm just curious to see how many others do this? To me it just seems incredibly impractical (for various reasons) to have tenants mail checks manually every month. I actually convinced my lawn guy to start accepting payments via CC on auto pay. I couldn't stand having to constantly write him checks. Sometimes I would forget or this and that, plus I travel extensively... it was just a hassle. One less thing to worry about is always a good thing
One thing I didn't think about though is what the transaction costs would be for each transaction. I will have to double check on this issue.... the dollar amounts I'm currently charging for my customers is only $9-$29 dollar per month. The amount being charged from tenants would be much larger of course. Its been so many yrs I don't even recall what I'm being charged per transaction. Yikes!
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.
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.
How about having them deposit the check into your bank account.
Apologies, I woke up too early this morning and having a brain block here. I just realized there are no fees for auto bank drafts, or is there? I could always have the tenant sign an agreement they must setup auto pay to have the funds deposited into my account.
I know there is a way for me to setup auto pay with my bank account to pay certain bills. However, I have never used that feature before. I will call them on monday and investigate further because this credit card processing seems to be a no go due to the high costs of the transaction fees on such large dollar amounts.
It is their responsibility to pay the rent. Not yours, to "bill them" and collect. What if they didn't make a deposit at the usual time and the payment "bounced"? You're causing a problem where there isn't one. also this is not a debt payment so I think you could be crossing the line by automatically deducting payments from a person's bank account. They could set up auto pay, though,if they choose to. But you can't force them to pay that way. You're going too far with this situation.
No. I don't like giving a CC company a percent of my income. 2-3% in fees can add up to a substantial amount over the months if years of a tenant. I take any Dort of monetary payment as long as I don't get charged for it, so its cash check or direct deposit into a specific account. I'm not gonna give 2-3% a month from every one of my rentals to a bank. Screw that. Lots of people argue well its convenient. For 2-3% a month out of each rental I'll drag my azz down and deposit the money into my account. Now why would you want to be giving up about $1800-2500 a year for some imaginary convenience. Yeah no thanks.
When I had my business I has to offer a CC payment. I didn't care for the "convenience". Over time it adds up to a substantial amount of money. I know plenty of places that now charge the 2-3% additional if you use a CC because they're tired of eating those charges
And it's their responsibility to pay the rent. As a renter I'm not gonna give you my CC number.
Last edited by Electrician4you; 08-17-2014 at 04:22 PM..
I'm new to this forum and was curious about an issue. I apologize if this is a "silly" question, but I am curious for those who have rental properties..... does anyone here have their tenants enrolled in auto pay monthly via credit card or echeck?
I have an existing business where I have customers being billed automatically every month via credit card. It just makes life so much easier rather than having to deal with customers who do not pay on time etc. It would drive me crazy having to police these customers in regards to payment. Thus, my billing system handles everything on auto pilot and immediately notifies me if someone is past due, declined etc. This billing system works so well for my current business, so I was hoping this could also be applied to tenants?
Would there be any downside to having tenants enrolled in auto pay as described? I myself cannot stand writing checks every month and have all my bills paid on auto billing.
Thanks for any input.
I'd love to be able to pay online or autodraft, unfortunately my landlord doesn't allow it.
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