Accepting Venmo For Rent Payments?

Online rent collection is a better option.

Many landlords I speak to still collect paper checks for rent payments. They are beginning to realize this is an antiquated and cumbersome process. And, most tenants will tell you that they absolutely detest paying their rent with a paper check. This is especially applies to those under the age of 50.

There are a number of electronic rent collection options. Peer-to-peer payments is one of the newer methods. Venmo and Zelle are two of the more popular apps.  Zelle will not work for most landlords as it has transaction limits of $500 unless your bank is registered.

Many landlords accept Venmo for rent payments. The problem is that Venmo does not permit it to be used for business transactions

Their site specifically states – “Venmo may not otherwise be used to receive business, commercial or merchant transactions, meaning you CANNOT use Venmo to accept payment from (or send payment to) another user for a good or service.”

Venmo further warns – “If you accept a Venmo payment from someone for a good or service and we later review the payment, we may reverse the payment, meaning you could lose both the payment and the item sold.  This review process may not occur until after you attempt to transfer the funds out of Venmo.”

There are other reasons why you should not use Venmo or other peer-to-peer apps for rent payments.

Venmo and most other peer-to-peer payment apps do not allow landlords to set the minimum payment amount that will be accepted. This can be an issue if the tenant sends a partial payment that is automatically accepted.  In most states, accepting partial rent prevents the landlord  from charging  late fees and proceeding with an eviction. Some states will not permit landlords to collect the remainder of the rent.

Peer-to-peer payment apps also lack reporting features. If you are treating your rental properties like a business, it is crucial to be able to track rent payment details for accounting and tax reporting.

The best option for replacing paper checks for both landlords and tenants is online rent collection. Landlords can have invoices automatically emailed to tenants. These rent payments  can then be directly deposited to the landlord’s bank account.

Tenants and landlords can also set up a recurring payments. Each month the tenant’s account is debited for the rent payment and automatically deposited into the landlord’s account.

When choosing an online rent collection program, make sure it has the ability to assess late fees on whatever day of the month you choose. Other important features include detailed account and transaction reporting and not accepting partial payments.

Obviously, cost should be taken into consideration. At TenantMagic, we use Singular Payments which meets all of the requirements I mentioned and costs the tenant a $1.00 convenience fee per rent payment. There is no cost to the landlord. For more information or to register, contact Walter Richardson walter.richardson@singularpayments.com.

Jay Apple is Co-founder of TenantMagic  www.tenantmagic.net, an online rental application and screening program for residential real estate.

japple@tenantmagic.net

My Last Tenant Was a Bank Robber

Over the past few months I have been getting a number calls from new landlords looking for tenant screening and asking about TenantMagic’s online rental application and background screening program. Many times they relate stories to me about not doing backgrounds checks on their previous tenants and the predictable bad consequences.

One landlord told me that she recently had a tenant taken away by the police in handcuffs. When she inquired why, the police told her that he was being arrested for bank robbery. She told me how surprised she was and that he “was such a friendly guy.” Tenant screening would have shown that being friendly doesn’t necessarily make for a good tenant.

Many of my discussions involve the benefits of requiring background screenings on all tenants 18 and over. She and many other landlords have told me that they are (or think they are) a good judge of character. Not only is this intuition many times incorrect, it can also cause issues with Fair Housing compliance.

My other recent conversation was with a landlord that had her property used as a meth lab. This can be very serious and dangerous. Meth labs can explode and destroy the property. Meth houses also attract meth addicts which many times are also  criminals. Additionally, the chemicals used in meth production are very toxic. Meth house remediation costs can range from $3000 – $25,000 according to this story in the Boston Globe. https://www.bostonglobe.com/news/nation/2013/12/28/meth-lab-cleanup-growing-industry/Mvcx3cpnQ6P6wLOE2ejDuJ/story.html

These stories really demonstrate the importance of doing a comprehensive background check on your tenants. Your rental property is a very large investment and landlords need to make every effort to protect that investment by thoroughly checking out prospective tenants. This includes criminal and eviction history in addition to income, credit and payment histories.

Making judgements based on a single meeting with a potential applicant is unreliable and can potentially result in Fair Housing compliance issues.

Using a quick, easy and free screening program such as TenantMagic, can help assure you that you are getting a qualified tenant which goes a long way to protecting your property investment.

Fair Housing Tips For Landlords

It is critical for landlords to comply with Fair Housing when screening tenants for many reasons– legal, ethical, and business.

However, it is not difficult to avoid problem tenants before the lease is signed and still be fully compliant with Fair Housing regulations. Landlords can check this post out for a go overview of Fair Housing regulations 10 Things Landlords Should Know About Fair Housing

The first thing to remember is to treat every applicant the same.

We have had a large number of new landlords register with TenantMagic and I been getting calls with questions about co-applicants. Some landlords tell me that they give married couples a break on their application fees or do not require the wife to complete an application and background screening.

This is a bad practice and can result in the owner running afoul of Fair Housing regulations.

Any co-applicant must be treated the same regardless if they are married to the primary applicant.

The TenantMagic application instructs all applicants 18 and over to complete the application and authorize the background screening.

This not only helps with Fair Housing compliance but makes good business sense. It important to know if any of your tenants have a felony conviction or a history of collections from creditors.

TenantMagic charges each applicant an application fee. Many landlords I have spoken to feel that a fee for each applicant can pose an obstacle for applying.

My response to the landlord is they can offer to take the fees off of the 1st months’s rent if accepted.

The benefit of charging an application fee upfront, is to minimize the number of applicants that would not qualify (based on Fair Housing allowed criteria).

TenantMagic’s goal is to reduce the time landlords and agents spend with unqualified applicants while providing them with comprehensive information to make an informed decision.

This post is for guidance purposes only and is not intended as legal advice. If you have any questions regarding fair housing laws, please consult an attorney or the proper regulatory agency.