In this business, everything is a race against time. It’s not a race in the sense of competing with others, but it’s a race to make sure that the deal is “sealed.” In this business, it doesn’t count till you have the money AND the signed lease.
The key is to be fast. I have found that until the lease is signed and the money is received, people keep looking elsewhere and tend to change their minds. Once it’s done you are golden with a rock solid lease.
Because of the race against time, I have found the “speed” of transfers to be super important. At the same time it is also important that those funds are posted and not pending. The last thing you want to do is for a check to bounce or for funds not to post, and now you have no money AND no possession of the house.
Remember: You don’t want to accept the equivalent of “checks” or a type of money that isn’t guaranteed for the first month’s rent or the security deposit.
4 Ways to Get the Funds You Need NOW:
This is my favorite method and I am personally slowly switching all my tenant to pay through Cozy. The reality is the multiple bank accounts that I have now, is a pain in the tush. Having one account is a dream, but there currently is no way to make sure you know who it is from unless you differentiate rent. Which only works as long as everyone pays their allotted rent. That is not something that I want to rely on.
Cozy does both sides. They allow you to use ONE account while they label all the income. A bonus is at the end of the year there is a statement with all rents received so it REALLY easy to compile all of your income.
Negatives: Takes 5 days to transfer
2. Member-to-Member Transfer
Most major banks have a quick way to transfer money internally. So, if you and your applicant bank at the same place they can usually go online and transfer the money the same day.
3. Money Order or Certified Check
This is great if you are there in person. They hand you the funds and it is finished quickly and easily.
Cost: The certified checks may be free through the applicant’s bank while the money order usually has a processing fee.
4. Wire Transfer
This old-fashioned way still works great! Your tenant goes to the bank and wires you the money, and you easily receive it.
Cost: The bank usually charges a fee for this service.
I have used all these methods and they all work great. Paypal is one of my more recent favorites simply because of how easy it is for everyone. Remember: all charges are the responsibility of the tenant!
How I would NOT receive rent funds!
This is a newer way and paypal use to be a favorite. The funds are transferred through the “gift” function, so there are no fees. The funds arrive instantly and then you just transfer them into your account. It’s both quick and painless. The PROBLEM is there is no protection. The gift fund means it’s a gift when in reality While I have personally not had an issue, I have heard that paypal will reverse ALL of it with a complaint. My rents are between $1350-2100 a month so having someone overturn a YEAR of rent is not a risk I am willing to take.
Cost: Free, if done as a “gift” and you use your bank account. If you use a credit card, then there is a “fee” attached.
As a landlord who is always learning, I love new technology. Are there other ways that you can quickly, safely, and securely transfer money? What method do you use? Is there something new out there?0
For military members you can also use allotments.
Great article! We also use wires, but do it online. We use Navy Fed and our landlord banks with Wells Fargo. I just add our landlord as an external account and have a reoccurring transfer. Pretty much direct deposit and we did this for security deposit and monthly for rent as well.
Elizabeth Bennett Colegrove says