Although every day is different in the life of a landlord, some situations occur more often. One question that some landlords will inevitably face is whether or not they should accept cash from tenants as payment or deposit on their rental property. Online software can help you with free tenant screening to ensure that a tenant applying to rent your apartment has a good credit history; however, just because someone has good credit doesn’t necessarily mean that they’ll be able to reliably pay their rent in cash. Here are some things to keep in mind when considering cash versus check or credit card.
The benefits and weaknesses of cash
While it’s less common, some people in the world don’t have bank accounts. If they do have a checking account, they’d be able to either write you a check or you could set up auto deposits with their banking account’s routing info. Still, just because someone doesn’t have money in a bank account doesn’t mean that they can’t pay their rent each week. For example, having your rent paid in cash means that you get immediate access to your monthly rent. You don’t need to be concerned about whether or not a check will bounce or a credit card charge will be reversed, either, which can also provide peace of mind.
Accepting cash as a form of payment for rent does have some drawbacks. For example, nobody is likely to send a lot of money through the mail, and it’s more tedious to find time to meet a tenant in person and then deposit their rent in the bank. Checks can be deposited electronically, which makes it much easier to handle rent payments if you’re a busy landlord. While property managers who have only one or two rentals may be willing to make these concessions to rent their apartment, larger operations will likely need to avoid cash-only tenants if they’re pressed for time.
Online payment is on the rise
While writing a check to pay rent is still the norm for many tenants and landlords, more and more landlords are accepting payment online, too. With platforms like PayPal and Venmo gaining more users every day, it makes sense that landlords would want an option that’s convenient and quick as they try to appeal to tenants. This doesn’t help individuals who want to pay in cash, of course; however, if they don’t have a checkbook but do have a bank account, online payment can be a great solution.
Money orders are an option, too
If a tenant only has access to cash, they can find a more secure way to get their money by using a money order. Anyone can go to the bank and exchange their dollars for a money order, which is similar in function to a check. This enables your tenant to mail the rent payment each month without having to schedule a day and time to meet with you in person each month. For both the convenience that they offer and the fact that they enable you to appeal to and work with a variety of tenants, it’s worth considering accepting money orders if you’re interested in helping tenants who only have cash.
Ultimately, you decide how you run your business. Some landlords want to accept cash payments for rent and others want to choose a less time-consuming option. Pick the one that fits your style and keep the above points in mind, and you won’t go wrong in your property management journey.