As a landlord, attempting to collect overdue rent can be both burdensome and costly. As of 2011, there were other options to receive rental payments besides manual mail-in. With the popularity of checking and debit cards, a landlord can now receive rent within 24 hours. Thus, direct deposit is both convenient and inexpensive, though it does pose a higher safety risk to the landlord who must forward banking information to the tenant. Nevertheless, direct deposit remains a convenient method for collecting rent. Several ways exist to make this happen.
Forward your banking account information to your tenant. This will include both your checking and routing numbers found at the bottom of your paper checks. Your tenant will set up your account as a payee or bill through her bank's bill pay option. Each month, the tenant’s bank will transfer funds directly from the tenant’s account to your account.
Set up automatic withdrawals directly from your resident's checking account. To do this, you will need your tenant's checking account and routing numbers. This will minimize financial risk, with the exception of your tenant having insufficient funds and the chances of identity theft occurring to you. This is a rather convenient way to control rental income and evade administrative costs. Check with your bank for possible associated fees and overall structural processing.
Sign up and establish an account through AutoPay. Your residents can automatically set up monthly payments directly from their credit cards or checking accounts via debit cards. Residents will choose a particular day to debit funds each month from their accounts. This is one of the safest options for you as a landlord.
Create a PayPal account and have your tenant make payments directly to that account via checking/debit or credit card. Payments will go directly into your PayPal account. This is also one of the safest options for direct pay (see Resources).
- Direct deposit between landlord and tenant, though convenient, also poses a risk to the landlord. For direct deposit to occur, you must forward your banking information to the tenant. If this information gets in the wrong hands, it could lead to identity theft and outright theft of funds.
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