Keys to success for accepting rent payments in cash

cash payments

Property managers will inevitably come across ideal prospective tenants who want to, or need to, pay rent with cash. While the non-bouncing nature of cash seems like a great way to collect the rent, in reality, traditional cash payments  can be a risky business, not to mention inconvenient and time consuming. The property manager needs to be on hand to accept the cash payments, then safely store the cash, record it an accounting system, and securely make bank deposits.

Just say no to cash?

With all the hassle, is the solution to stop taking cash? Not if attracting a larger renter pool is a goal. More than 25% of U.S. households are un-banked or under-banked, without ready access to bank accounts, according to a government survey. While online services exist to help process rental payments via electronic bank charge (ACH) or credit card, the under-banked population typically doesn’t have access to either of these payment methods. Plus, accepting cash payments can help property managers access more potential residents in today’s competitive rental market.

Money orders or cashier’s checks might look like a good solution, especially for property management companies without a local office. Then again, tenants have to contend with not one but two errands: first to a bank or other money order service provider, then to deliver the payment to the property management office. These cash alternatives can also be a hassle for property managers to process.

3 rules for successful rent payments in cash

When setting out to accept cash for rent, a few basic guidelines can lead to a good experience for renters and for owners, whether apartment complexes or real estate investors renting out a few properties:

  1. Ease of payment for more on-time payments: The more easily renters can pay, the less likely a landlord will hear the excuses of why the rent is late. (“You weren’t there.” “I couldn’t get to your office in time.”)
  2. Proof of payment: Cash should be delivered in person and received in person. The renter always needs a receipt.
  3. Secure payment and cash deposits: The cash needs to get from the renter and into the property owner’s bank account as quickly as possible, with as few opportunities for theft or fraud as possible. 

A new way to accept rent payments in cash

PayNearMe took a close look at the challenges of accepting and handling cash when designing its cash transaction network. One property management company, Alarca Realty in North Carolina, had struggled with wanting to accept cash but was concerned about the shortfalls. They decided to try a new cash payment service called PayNearMe Express. Now Alarca’s tenants can make a quick stop at any local 7-Eleven store day or night to pay their rent with cash, making it easier to pay on time. Tenants get a receipt for their cash rent payment. The property manager gets instant notification of the “digital cash” payment.

Less cash handling means more time for property managers to rent open units and maintain the property — not to mention the relief of not having to count, track, and store cash or make frequent trips to the bank. Gone is the need to reconcile cash payments in the accounting system; PayNearMe summarizes all the payments on one screen.

We’re in a time where more people are renting, yet fewer people have access to bank accounts and credit cards. Therefore, property managers need to make it as easy as possible for tenants who prefer to pay their rent with cash. For property managers, enabling an alternative cash rent payment system like PayNearMe can help improve occupancy rates by opening up to tenants who prefer to pay their rent with cash. It can also improve property management operations by facilitating on-time cash payments that are more secure and more convenient to process.

Learn more about property manager cash payment options at PayNearMe.com.



6 Comments

  • Michelle Shapiro says:

    An alternative to cash that does not alienate the un/under-banked is pre-paid cards. This gives you access to these potential residents, but without the inefficiencies of accepting cash and even take advantage of online services. As a matter of fact, even the government is now taking advantage of prepaid cards to service the unbanked with the DirectExpress card (anyone receiving Social Security or Supplemental Security Income payments can enroll).

  • Kelvin Tse Kelvin Tse says:

    Michelle, thank you for your post. Prepaid cards are definitely a great cash alternative for consumers seeking a bank account replacement. However, one of the big reasons credit/debit/prepaid cards have not gained much ground in the property management space is because property managers don’t want to pay the interchange fees associated with accepting those types of payments, and often pass them along to their tenants. Because many issuers are not subject to caps under the Durbin amendment, interchange can be significant.

    In addition, some consumers are reluctant to use prepaid cards because of the consumer-facing fees associated with many of the programs. Of course, there are also some excellent prepaid card programs out there, but many consumers will continue to rely upon cash, and property managers need a better way to deal with their payments.

  • Elina says:

    The most important task in cash payment is keeping the proof of the payment that is the receipt. Another important task to remember is keeping the receipt in safe place.We should Keep all our rent receipts organized in a safe, sensible place, such as in a folder or box where we have our lease.

  • Judy says:

    I work for a mangement company that oversees quite a few properties. There are at least 6 checking accounts that rent is deposit in. For the express service there is a $199 set up fee. Would we need that for each of the companies to make certain the cash was deposited in the proper bank account or can we have one account and delineate which bank account the money would be sent to by the barcode remitted?

  • Kelvin Tse Kelvin Tse says:

    Hi Judy, thanks for your question.

    PayNearMe Express will allow you to settle your tenants’ rent payments to any number of checking accounts. With each property, you can specify ahead of time which bank account the payment should deposit into. All of this comes standard as part of the one-time $199 setup fee, so there’s no need to pay it multiple times for each property or bank account.

    Please feel free to email me directly at kelvin@paynearme.com if you have any other questions.

  • Eric rowwen says:

    Nice post. Now there is a trend of online rent payment. There are number of tenants who have embraced technology to the fullest extent, and will jump at the chance to be able to pay rent online.

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