Landlord Question and Answer Forum

Hi All, I'm new to this thing renting thing and was hoping someone could give me a heads up. Does anyone out there have some sort of direct deposit set up where their tenants just pay their rents electronically into an account? If so, how'd you set it up? Would anyone recommend just sticking to cash/check as the preferred form of payment? Thank you.

Hi David, I'm new to this as well, I recently moved to CO. and my house just happens to be located in Vancouver, WA which has the highest number of foreclosures in WA state right now. Anyway, I called my credit union and asked about that. They said the the tenant would have to set up EFT on their part, and have it deposited into my account from their bank. Most institutions have Bill Pay, and she suggested I have my future tenants sign up for it asap. I'm considering including it in my lease, where you can add additional info.

Posted by Michelle B, WA on Thursday, June 25, 2009

Thanks Michelle. I don't know why I didn't think about just running down to my bank for that info. Good idea. It would be nice to just have the tenants electronically pay. It seems like it would make the rent collection process a whole lot easier.

Posted by David A, WA on Thursday, June 25, 2009

No problem, I guess the hard part is having your tenants agree to it. Collecting rent would be that much easier!

Posted by Michelle B, WA on Thursday, June 25, 2009

I have found that PayPal is also really helpful and easy to use.

Posted by jennifer b, CO on Saturday, June 27, 2009

Try google checkout, they like paying by credit card. you can charge the tenant the 3% fee if they pay by card! www.google.com/checkout

Posted by Kelly T, CA on Monday, June 29, 2009

I know my renter si I gave them 12 deposit slips. The 1st they just drop the rent off at the bank.

Posted by Ronald P, MO on Monday, June 29, 2009

Thank you all for the input. These are great suggestions, and hopefully this thread will be helpful to others as well. Kelly T., have you been using the google checkout for a while now? How dependable has it been for you? Ronald P., I love your idea, and I could probably set up a "dummy" account if I wanted to so that way there's no money in the account for them to withdraw from.

Posted by David A, WA on Monday, June 29, 2009

Kelly T., how did you set up through google checkout? More specifically, I was seeing that it looks like it works if you have a website. If I don't have a website, do you know if I could still be set up for this method?

Posted by David A, WA on Monday, June 29, 2009

Does Google checkout charge the 3% like Pay Pal? That's exactley why I don't want to use Pay Pal.

Posted by Michelle B, WA on Tuesday, June 30, 2009

We always have our tenants arrange with their bank to automatically pay into ours on the 1st of every month. This works well, as live overseas and could not phsically deposit a amailed check into our account. Easy for teanat and easy for landlord.

Posted by Joanne S, VA on Tuesday, June 30, 2009

Landlords! Be careful with automatic deposits made by tenant. It can get VERY sticky when you want to evict or they start to make partial payments.

Posted by Donna , NC on Tuesday, June 30, 2009

PayPal only charges 3% if you get a premier account that accepts credit cards. If you get a personal account it does not cost anything to send, receive, or withdraw funds. The funds go right from bank to bank with no risk. I have two accounts, one that I use when I know I need to accept a credit card pymt (ebay seller), and the other one is just for regular deposits such as from tenant rent pymt. The tenants that have used paypal also seem to really appreciate it, because they can avoid mailing, checks, or depositing into banks, etc. Its all e-pay. I imagine its very similar to Google check out, but have never tried that service.

Posted by jennifer b, CO on Tuesday, June 30, 2009

I once again WARN that automated deposits or payments can be a problem. In many states, the collection of a partial payment may void any started court action. With a tenant depositing or paying via paypal - you have little control as to whether you can accept or not. You may return the partial payment later but it can be a touchy situation in a courtroom. Check with your attorney but there are some states/locations where a judge stopped an eviction over the collection of a partial payment that was automatically deposited.

Posted by Donna , NC on Wednesday, July 1, 2009

Thanks, Helen for the warning. For whatever its worth, I just got finished with an eviction in CO and was awarded judgement. The tenants had several partial pymts via PayPal and the issue never came up in court. The judge never even asked for documentation or receipts, but then again the tenants didn't show to court, so I guess she was going to rule in my favor regardless.

Posted by jennifer b, CO on Wednesday, July 1, 2009

I use automatedlandlord.com It works great.

Posted by David K, NH on Friday, September 4, 2009

I've seen ClearNow come up a lot on other landlord forums. From my research, they don't do partial payments - it's all or none for the amount collected, so that's good.

Posted by Ruthie K, PA on Tuesday, September 15, 2009

I have tenants deposit rent in person into my checking account, I can check it online and my Bank has many locations and night deposit is always possible. And the bank always give a receipt and strangly NEVER asks them for ID. So i give the tenants my deposit tickets maked with the tenants address so I'll know where that money came from.

Posted by mike t, AR on Saturday, September 19, 2009

My Mother has rentals in Florida and lives in Texas. She set up a deposit only account with her bank and sent the deposit slips to her tenants. They have a carbonless copy so the tenant has a copy of each deposit as well. I have a house in a small town and told my Bank that the tenants would be making rent payments to my account, since it's a small town, all they have to do is walk in and tell them my name and the Bank puts it in my account.

Posted by L. Gaye B, TX on Wednesday, November 4, 2009

Setting up eft through my bank was a horrible experience. There are a lot of companies out there that do it better, and make it easy on tenants and landlords. plus, both can login and see past/future payments with an accounting ledger. i've tried a few, but now I'm using PayToRent.com - so far it's the best I've used, and they keep adding features which is a plus for me. It's actually free too, I pass the $1.50 fee onto tenants, who don't mind paying it. hope this helps.

Posted by Scott S, DC on Saturday, February 6, 2010

Hi David, I had a tenant deposit her rent into my account. Sometimes she would put the full amount into my account and sometimes she would not. Some of her checks would not clear. I would suggest that you receive certified checks or money orders sent to you. Vivian

Posted by Arnita B, DC on Sunday, February 7, 2010

Lets not assume all tenants have a bank account or a computer.It would be nice if they all did.I give them deposit slips to my bank,I can check my account online and it saves me a trip to the bank.

Posted by mike t, AR on Monday, February 8, 2010

Hi David, what I use is a "deposit only" ATM Card. The Tenant uses the card to deposit their rent check. No one can say the "check is in the mail", or I sent it out 2 days ago. All of my agreements say that the rent must be paid no later than 3 day following the 1st of the month. Therefore, with the deposit, the bank maintains when the deposit was made down to the second if you should ever need that information. I believe that this will be the wave of the future not ACH.

Posted by Cheryl A M, OH on Monday, March 14, 2011

Hi Cheryl, Is the Deposit only ATM card given to your tenant by you? Do most bank have these cards? Julie

Posted by Julie A, CO on Monday, May 30, 2011

Every house that is rented is a business. I have set my houses up so that each has it's own LLC. Some people put a number of houses in one LLC. This is okay, however, if something drastic should occur, every house in that LLC is vulnerble to a lawsuit. Nontheless, with each house in it's own LLC and is a business. After setting up a business account at your bank for the business, request an ATM "deposit only" card for that business. I deal with CHASE and they were very happy to do so. I do not have just one home, I have 6 houses being rented, plus approximately, over 200 acres of farmgound that is rented. It makes your whole life a lot easier to say the least. Good luck if you go that direction. I made the move and love every minute of it.

Posted by Cheryl A M, OH on Tuesday, May 31, 2011

My name is Justin Yung and I am with ClearNow (www.ClearNow.com), the company that was mentioned by Ruthie earlier on this thread (a post from 2009). With ClearNow automatic debits, the tenant doesn't have to do anything (the debits just occur as an automatic withdrawal - no ATMs to drive to, no checks to write). Also, since this was another concern being discussed, with ClearNow debits are an all-or-nothing process, so partial payments can never occur (unlike when a tenant gets to select how much money to deposit).

Posted by Justin Y, NC on Tuesday, May 31, 2011

Again how much does this cost the landlord to pay you to do this. The ATM card is free, it has the date posted and time the deposit was made. Remember, people who rent are not wealthy people. Generally, they work from week to week and live from week to week. If a person gets paid on Friday and it is the 1st, what happens? all-or-nothing can easily get in your way. Plus, if I was a renter, I would feel that yet again you have another hammer over my head. Remember, it is your job to make sure things are cared for, that the tenant wants to live in your house. ( This is the reason for a lease.) You are always trying to make your tenant feel good enough, that they want to stay forever. All of my rentals have long term people living in them. A couple of times per year I may get a call and they would say I am going to 2-3 days on the rent. Therefore, that is when the additional monies kick in and they pay a pentalty.

Posted by Cheryl A M, OH on Tuesday, May 31, 2011

The automatic debits by ClearNow are not free to landlords - our pricing (which is explained in more detail at www.clearnow.com) for monthly debits is $14.95/mo for the first tenant and $2/mo for each additional tenant. These fees are subtracted from the rent collected and direct deposited into the landlord's bank account (so there is no separate billing cycle). For landlords who just have one tenant, we also have a program where we can charge $4/debit for semimonthly payments ($8/mo for their only tenant). In those instances where a debit is upcoming through ClearNow and the tenant knows they will not have funds in their bank account, a one-time "block" or stop of the debit can be initiated by the landlord or tenant. If you have a tenant who will go to an ATM and use the free ATM card to deposit funds into your bank account, that's great. Since not all solutions work for everyone, ClearNow might work better for other landlords whose tenants respond better to an automatic debit (where those tenants don't have to do anything) and who are concerned about never receiving partial rent payments (since ClearNow is an all-or-none transaction).

Posted by Justin Y, NC on Wednesday, June 1, 2011

Hi I use Wellsfargo bank so I can check my account at anytime I have been doing this for 4yr and I have 10 rentals my tenants depoiset then send me a tex,email.call when there funds are put in bank and they no if there not in on time it will show up in bank log. I do not except checks and I send out 3 day or quit on the 4 even if they do parcial rent that starts the clock ticking. still collect late fee but if I have to file I do it.

Posted by Michael M, MT on Monday, April 15, 2013