Accept Payment Online

Why do so few landlords accept automatic payments or online payments for rent?

Our research has found that only 7% of landlords/property mgrs. in the USA offer tenants the ability to have their rent paid automatically from their bank accounts (like a health club membership or electric bill), since it easier for the renter and landlord, why do so few landlords offer this service? We know why landlords don't accept credit cards (they charge 2% - 5% of transaction) but why do so few landlords accept online or automatic payments?

Public Comments

1. Most landlords are individuals who own only a small number of rental properties. It would take more time than it was worth for them to set up the proper accounts, and do the paperwork,etc. You need a business account to do it, and there are fees involved.
2. Because they dont get their money until a few days after the check date. They get a physical check usually. Maybe they dont want to give you their bank acct info. Maybe they switch bank accts frequently.
3. I feel it just comes down to inability to think out-of-the-box. Despite a list of possible excuses that a landlord can come up with, I think it's only due to silly traditions (e.g. wanting post dated checks) and not keeping up with the electronic times.
4. Many of them don't realize that they can do such a thing.
5. I am a landlord and let me tell you why. The greatest majority of landlords are old farts and haven't entered the 20th century in regards to finances. Old people fear online banking and so do I even though I am only 38 years old. however i still have accounts for tenants to make deposits. Online has come along ways but isn't fool proof or secure as it could be. We often have an over confidence in our banking worlds ability to secure our accounts and account information. The people in the next generation going forward will probably change. A lot of the real estate wealth in this country is held by people over the age of 50. That in addition to the small landlords maybe not wanting to share bank information could be another reason. I simply don't do any personal banking at the bank I let tenants make deposits on my property. This makes my online banking affairs easy to sort out. The credit cards no way will I do that cause generally speaking a person using credit cards to pay rent will soon not be able to pay the rent! And as most landlords we work hard for our assets and investments why give up 5% of the transaction for absolutely no reason. Another thing is the credit car machines arent check and take time to operate I would never wait for a tenant to bring me there credit card to pay rent. The credit card machines take money to buy often and are a pain to deal with. I would prefer they get a cash advance and pay the 5% fee themselves then mail me the rent or deposit it themselves. I am in the housing business not the money business. Some bills you just have to pay cash or check. The extra fees you propose to ask your landlord fee I bet you wouldn't pay so why make them pay? With the ability to dispute charges this would create a mess most landlords wont tolerate thats another reason why!!! Sorry if its not what u wanted to hear. I just figure you want the truth.
6. The previous answerers touched on it for me. First, I love online bill pay. the problem is that for my places, I sometimes get cash, sometimes money orders, other times checks. I have tenants that do have computers, some that don't have computers. I keep it to the old fashioned way because it is easier for my bookkeeping than if I had to go online, see what rents were credited, then go to the mail, see who sent payments in, then check my phone to see who is dropping off cash. It would just add one additional layer of procedures for me to follow. With the clientele I have this would incerase the time I spemd on bookkeeping. My time is too valuable. Now when it becomes the standard that all my tenants have computers and pay their bills online I would live it. I can then see it saving me time. Until then it's not worth it for me. Also, for the credit cards, the main reason I don't accept them is that it is too easy to dispute a debt. I can see a tenant, upon moving out and me deducting something from their security deposit calling their CC company up and disputing the last months rent. The burden then comes back to me to prove they owe me the money and that services were delivered. Again, not worth the hassle. Additionally, the cut that the bank takes is better in my pocket.
7. Because it costs them money. A payment with a check doesn't cost anything. Some accept Pay Pal as a form of payment, but if it were me, I would not use Pay Pal.. too much identity theft. Credit cards cost, as you said, a percentage and most landlords just are not equipt to set up a credit card machine. The 7% of landlords you are referring to are probably property management companies that rent large apartment complexes. I once rented in a large apartment complex that accepted credit cards.. payable on their online website.. it was a big franchised complex called Archstone. Best Wishes.