Tenant wants to pay rent with EFT
Yes, it is safe, we have been doing it for years. We prefer our tenants to make their rent payments in this manner. In fact, we prefer that they set up an automatic payment for the rent, either through their online banking or through their bank directly. Apart from getting your rent on time, this method also has the added benefit of both parties having their own records of rent payments through their bank statements, in case there is a dispute about the rent sometime down the track. Having a separate bank account just for the rent does make sense as well, it makes it easier for you to check if rent has come in, it makes it easier if you need to compare your statement without having to highlight all the rent payments amongst all other payments (you might not want to show your other incomes and spending habits to others), and you can withdraw the rents to your other account (which might offer higher interest) after it has come in, leaving a small balance most of the time in your rent account. I'd consider this offer. Keep in mind, any time you write a check, there's the information he's asking for.  If it makes you feel comfortable, use the small balance account, or set up a 4th one you'll use for these incoming deposits only. It's safe. You give people those numbers every time you write a check.  If a check is forged, and doesn't have your signature on it, the bank has to return the money to you; they get it back from the other bank, who takes whatever action it deems necessary against the forger. They've been doing this for a few hundred years, remember. What you've described is the norm in Australia, where it's rare for anyone under sixty to use cheques. Assuming they're transferring the funds using internet banking, I would have the following suggestions: You make it clear that the the funds must reach your account by the due date for rent. It is their (the tenant's) responsibility to allow for the normal transfer delay from their account to yours. This will save unpleasant arguments later if the rent is late. If you're not comfortable with your tenant knowing your banking details, set up another account specifically for receiving rental income payments and paying your costs associated with the property. This may have the added benefit of simplifying things at tax time. Another alternative, which I think others have mentioned, is to use an escrow service like PayPal, but be aware that these kinds of services will usually charge a small percentage when you withdraw your funds. "How can someone use the account number to withdraw money without my   consent? They can use your account number to game your banks phone support and try to phish their way into your account. Banks have gotten very good at combating this, but theoretically with just the address he lives in, your name, and a bad bank phone rep, he could get into your business. The account number would just be one more piece of information to lead with. I have 1 savings and 3 checking accounts with the same bank. Would they be able to gain access to the other accounts? Dependent on how incompetent the bad bank rep I referenced above is, sure. But the odds are incredibly low, and if anything were to happen, the bank would be falling over itself to fix it and make reparations so that you don't sue for a whole crap ton more. Is there a more secure and still free option that I have overlooked? Opening up yet another checking account solely for accounts receivable and transfer to accounts payable would keep your financial records more transparent. Also, banks are doing ""money transfer by email"" now, so I don't know how great that is for business transactions, but in that instance you're just giving out an email linked to a money receiving account instead of an actual account number. Paypal is also a pretty good EFT middleman, but their business practices have become shady in the past 5 years." It isn't EFT, but you might mention to your tenant, that many banks offer a Bill Pay service (example) where the bank will automatically mail a check to the right person for you. I have my rent setup this way.  My bank will send a rent check directly to my landlord 5 days before it is due. I am able to set this up for my tenants by providing them with a form to fill out so that they provide their name and bank account information, and then I gave that to my bank and they establish a recurring ACH transfer.  This way the tenant never gets my bank information. One note about this, I had a tenant break her lease and move out.  She notified me a couple of days before the first of the month, and by the time she had moved a few days later the rent had been automatically paid.  She called her bank and asked them to reverse the most recent transaction so she could have that month's rent refunded, and much to my surprise, they did.  So the financial transfer is not necessarily one-way. This is in the US. "The biggest disadvantage to you is that your tenant now knows your bank information, which means he can easily identify your source of money in the event he wins a lawsuit and wins a judgement.  He will be able to have a court marshall freeze your account. However, if you deposit your tenant's check into your account as opposed to an EFT, then your tenant can basically still obtain your bank account information and freeze your account, it would just take him a bit longer to get that information. I am definitely anti-landlord in these situations because I've had to deal with so many bad ones here in NYC, but as a landlord, the best thing you can do is to create a ""buffer"" account for you to deposit tenant rent money into, then transfer the money from the buffer account to your regular account.  This would prevent the tenant from knowing your personal bank information and greatly delay the tenant receiving his judgement from an assumed court win against you. My source:  I had to take my landlord to court, and after obtaining a judgement, I got a court marshall to begin the process of closing access to her account (she couldn't access the money in that account).  The process resulted in her sending me a check (assuming from her other account) for the judgement since her account was frozen and she couldn't access any of her money." Other options would be to use paypal, your tenant would only need your e-mail address. Most banks have a similar system to do a person-to-person transfers. My bank uses an e-mail address and only the last 4 digits of the account number. Similar to @SoulsOpenSource's answer, I would suggest Venmo, which works like PayPal but is free for debit-card-to-debit-card transactions. More information here. The mode of payment mentioned by your bank is called the ACH(Automatic Clearing House) which means that anyone(Trusted payment gateway owners like banks themselves) can process payments. There can be a fraud declared against any payment that you have made and you can get every single penny back. This amount can not be withdrawn in cash at all. However for your situation I would suggest that you ask your bank to block any transactions above the amount of a specific sum, this way they will require your authorization to finalize the payment. You should feel safe after this. Also no one can access any other account apart from the one whose details you are giving out so do not worry about this guy(or anyone else for that matter) to be able to access your other accounts.  Hope this helps. (I have experience in payment gateways so I do understand these procedures.) Cheers!! You can consider opening accounts either in Paypal or Google Wallet. In this way, you link your bank information to these accounts and the only information you need to provide your tenant is your e-mail id. Its safe and in this scenario -- just money transfer through bank account, there is no fee either for the sender (your tenant) or the receiver (you). "I live in Kenya, and also here we have corruption. However, we use EFT, RTGS, Mobile Money and its more safe than cheques. Beware, that paper based payments cost you way more than anything electronic. Often the bank charge you for the cheque book, they charge for receiving paper based payment instruments, and settlement is often a day or two, while mobile/electronic settlement is instant. Seen from a tenants perspective, its also easier. Imagine too, the small likelihood that you loose the cheques from your tenants?  Your fear for your account is understandable, but you may need to learn a little now, about how accounts are handled. In an online community only the persons with the necessary electronic credentials can withdraw from your account, being it online via your screen, or at the cashier, or by other means.  Therefore, your money are safer via the electronic means. The cause of your concern / unease can be that you are relinquishing your control from a paper-based, visible system, into a system which you may not know so much about, maybe because of that you have not done so much on computers, yet.  As a most recent caveat, though, don't get into the so called bitcoin technology, it is not safe, and as you saw, most recently, the very owner himself became the perpetrator breaking his very own bank by artificially inflating amounts on his own account, according to Japanese authorities. Now, electronic banking has been in existence since soon 40 years. Its based on cash, so behind the scenes, between the banks, huge deposits of cash are being moved physically, around from vault to vault, in the bank's money exchange / transaction settlement system. Thereby, a bank does not need to physically transfer money from one physical bank building to another - as they have huge loads of cash stashed in central depositories, between which they can now exchange money as compensation for cheques and electronic transfers. So, behind the scene of the electronic world, there are still physical cash being moved around, deep under the ground, in such vaults. I hope this has given you a little bit of confidence in the ""modern times"". If you have further questions, you are welcome.  These were my 50 cents :-). My background is in software development, where I have worked on banking systems for more than 10 years, making banking systems, as part of huge teams, working for the largest banks in the world." "In Britain it's standard practice to use an electronic bank transfer, otherwise known as a ""standing order"" for the monthly rent payment. Many letting agents insist on it here in Britain. It's rare to hear of fraud. It is possible to setup a Direct Debit with the account numbers, as happened in a famous case where Jeremy Clarkson claimed losing account numbers wasn't a problem. If a direct debit is taken from your account, then you are protected by the the Direct Debit guarantee which means that you get a full and immediate refund if there is any fraud or unexpected payments spotted. Some landlords, particularly of bedsits accept plain old cash, however that's not recommended as there is no trace of it being paid, which could lead to legal disputes." You could setup a Ally account to use solely for this. There is no minimum, no opening balance requirement, and you can do up to 6 transfers a month for free.  This would partition your money from other accounts, while giving you the flexibility to move it to other accounts with ease. Given a routing number / account number, it's easy to print a check with those details.  All you need is a MICR font.  No EFT needed. I would recommend that instead, you get his account information, and set up a direct withdrawal.  Of course, then you could potentially use HIS account fraudulently, but that would be true even if he just wrote you a check. Alternative solution with possibly better results: Use a 3rd party to transfer money between both of you. 2 Services you may want to look at: Rent share might be the best option. We are using it to split payment between 3 people in our unit. The owner is getting a single check that appears to be coming from all of us. The payment is automatic and goes through every month. I'm not sure if you as the owner could collect money electronically as opposed to receiving a check. It sounded like you didn't necessarily care about that though.
It depends on the terms of the lease, but it's hard to imagine a lease that would allow to do this unilaterally with no strings attached.  That means it actually depends not on how much you like your landlady, but on how much she likes you. In general, by signing the lease you assume a contractual obligation to pay the rent every month for the entire term of the lease.  In theory, you can be sued if you don't do that. In practice, a lot depends on your relationship with your landlord, as well as the rental market in your area.  If the landlord can easily find a replacement tenant, they may be willing to allow you to leave early.  If the rental market is slow, they will be more likely to hold you to the agreement.  Obviously, if you have a good relationship with the landlord, they may be more inclined to go easy on you. As far as telling your landlady you want to terminate the lease early, unless she's a particularly nasty person, you can just go ahead and tell her you'd like to leave early.  What you can't do is actually stop paying rent.  If you're on reasonably good terms with your landlady, you could just tell her your situation and say you'd like to move out.  She may be willing to work out an arrangement where she lists the apartment while you're still living there, allows prospective tenants to view it while it's occupied, and then has you move out if and when someone else wants to move in (e.g., at the end of the month).  Again, exactly how this works will probably depend on the rental market. Assuming you're in the USA, here is a useful page with some info on breaking a lease.  As mentioned there, the legal details vary by state. Also you would need to consider any taxation issues. As he will be paying you rent you will need to include this as income, plus any capital gains tax on the re-sale of the property may need to be paid. "I'd say your tenant is out $750, not you. How you handle it is totally personal preference.  If you want to be the super-nice landlord and eat the loss this one time, then you might gain some karma and hopefully they'll be awesome tenants for the remainder of their stay. Are they the kind of tenants you want to be nice to because they deserve it?  You (and she) have no way to prove she ever actually tried to pay you. Sound like she is learning a $750 lesson. ""Don't leave cash in a mailbox, and always get a receipt for rent paid."" Your insurance company would likely not pay out as it'd be below a typical deductible and you can't really prove the money ever existed. You'd be better off just taking the loss.  Think about it this way: How would you expect a bank or utility company to respond to this situation? ""Yeah, I left my mortgage as a cash-filled envelope on your doorstep. You didn't get it? I told you I'd do it!"" Guess who's paying double mortgage and a late fee?  You're not stuck with option 1, you're choosing to do it. She could refuse and fight you on it, which might not be worth the headache and potential small-claims court. But you're entitled to receive the rent and she is obligated to pay it. And ""paying it"" means making sure you actually receive it." Yes, automatic rate increases are typical in my experience (and I think it's very greedy, when it's based on nothing except that your lease is up for renewal, which is the situation you are describing). Yes, you should negotiate. I've had success going to the apartment manager and having this conversation:  Make these points: Conclude: I am not open to a rate increase, though I will sign a renewal at the same rate I am paying now. This conversation makes me very uncomfortable, but I try not to show it. I was able to negotiate a lease renewal at the same rate this way (in a large complex in Sacramento, CA).  If you are talking to a manager and not an owner, they will probably have to delay responding until they can check with the owner. The key really is that they want to keep units rented, especially when units are staying empty. Empty units are lost income for the owner. It is the other empty units that are staying empty that are the huge point in your favor. It's very possible that someone would lie to their landlord/landlady, but not be prepared to lie to the police.  So here's what I would do. Advise your tenant that since her money has been stolen from your letterbox, she should report the theft to the police. If she refuses to report the theft to the police, then her story is probably a lie.  In which case, treat the rent as deliquent and demand payment in full.  Invoke whatever kind of recourse is available in your jurisdiction. If she goes ahead and reports the theft, then it's very likely that her story is true.  It's probably in your interest to stay on good terms with such a tenant, so you could offer to split the loss with her.  But let her know that this is a one-time offer, and you won't be so generous again. Normally if you sublet your apartment, the landlord would pay you back the security deposit and the new tenant would need to pay a new security deposit to the landlord. (In my experience)  You never want to get in a situation where something like this happens. This is not normally how sublets are structured. They call you because that is their business rules. They want their money, so their system calls you starting on the 5th.  Now you have to decide what you should do to stop this. The most obvious is to move the payment date to before the 5th. Yes that does put you at risk if the tenant is late. But since it is only one of the 4 properties you own, it shouldn't be that big of a risk. "We change it every so often to reduce fraud. If you're absolutely sure you didn't just send money to a scammer impersonating a landlord, this has nothing to do with fraud-- they're playing a game with you. By changing the account number frequently, it makes it more likely you make a mistake in entering the payment account. When they come back to you a few days past due saying ""we never received your rent,"" you'll eventually realize it got sent to the wrong account. Now you owe them late fees, and there's really nothing you can do about it-- you did not in fact pay them on time; you sent it to the wrong account! It's an easy way for them to collect an additional few thousand dollars a year. Anytime a small business or landlord says they have to do something ""weird"" to reduce fraud, chances are it's a pretense to you getting hosed in some way." You are not a landlord.  You have choices: The current situation is charity. And that's ok, so long as you acknowledge it. In the big picture, anything less than market rent is a gift that you are giving the person living in your house. A good tenant might keep the place in better shape, and deserve a lower rent, but that's a quid pro quo. In the end, landlording is a business. If you had 10-20 apartments, they would be proving an income to you and you would have a large chunk of your wealth tied up in it. You would keep the apartments in good shape both to be legal and not a slumlord, but you'd also collect market rent. $100/apt would be $1000-$2000/mo income to you and your family.  You wife is right. As always. You have a decision to make to stop the bleeding. Maybe you should consider setting up a Taxpayer Identification Number (TIN) for your business dealings as a landlord and consider providing that instead of your SSN for this type of thing. I am assuming (if this is legitimate) they want it so they can send you a 1099 as they might be obligated to do if they are claiming the rent as a business expense. Also, I'd suggest having the tenant tell their employer to contact you directly. There is no need for the tenant in this situation to also get your SSN/TIN. This is something you are going to have to work out with the leasing company because your goal is to get them to make an exception to their normal rules. I'm a little surprised they wouldn't take 6 months pre-payment, plus documentation of your savings. One option might be to cash in the bonds (since you said they are mature), deposit them in a savings account, and show them your account balance. That documentation of enough to pay for the year, plus an offer to pay 6 months in advance would be pretty compelling. Ask the property manage if that's sufficient. And if the lease is for one year and you're willing to pay the entire year in advance, I can't see how they would possibly object. If your employment prospects are good (show them your resume and explain why you are moving and what jobs you are seeking) a smart property manager would realize you'll be an excellent, low-risk tenant and will make an effort to convince the parent company that you should live there. There are certain situations where you could legally pay yourself rent, but it'd be in the context of multiple business entities interacting, never in the context of an individual renting their own property.  Even if you could, any rent paid to yourself would count as rental income, so there'd be no benefit. Edit: I was hunting for examples where it might be acceptable, and didn't, but I found a good explanation as to why it is not acceptable from Brandon Hall on a BiggerPockets post: To get technical, you will be going up against the Economic Substance   Doctrine which states that a transaction has economic substance if:   (1) the transaction changes in a meaningful way (apart from Federal   income tax effects) the taxpayer’s economic position; and (2) the   taxpayer has a substantial purpose (apart from Federal income tax   effects) for entering into such transaction. By transferring your primary residence into a LLC, you would not be   changing your economic position. Further, you do not have a   substantial purpose for entering into such transaction other than to   simply avoid paying federal income taxes. So it might make sense if multiple people owned the LLC that owned the property you wanted to rent, and there are instances where company X owns holding company Y that owns an office building that company X rents space in. But if you're the sole player in the LLC's then it sounds like a no-go. __________ _________ ____________ Therefore, I get the outcome I want.   The human brain must think: it can't stop.  If you don't believe me, try meditating.    The mental process of putting stuff in those blanks is called rationalization.  This is a bored mind who wants something.  If that mind is not particularly well disciplined, those things will get pretty unrealistic.   That is what has happened to your friend.  Landlords do not like drama.  They do like money.  Generally a landlord will be happy to take your money any reasonable way that they can achieve.  It sounds like either your landlord lost the ability to do credit cards, or he got sick of paying the 3% overhead, or some other overhead costs that may be higher because he does not have the right credit card merchant service.  For instance PayPal Here charges 2.70% flat, but a traditional swiper can cost up to $2000 a year in trumped up fees and charges.   As soon as the landlord calls the rent a debt, he has to take cash.  But in most places, rental is at-will, and the landlord can evict for any reason or no reason at all (except race, creed, color, national origin, family, running a daycare center and a few other protected reasons)...  and there's not a whole lot you can do about it.  Even for a lease he can trump up a reason.  Your friend would be wise to have a meeting of the minds with the landlord about how he'd like to pay.  Business is done by mutual consent, not non-consensual legal tricks.  I agree, I wouldn't do ACH either.   One problem with ACH (or credit) is the landlord can charge anything he pleases, and that's when they start sneaking in devious surcharges for things.  Once he's pulled the money out, you're really at a disadvantage to argue, since he already has the money. And it's really difficult to do a chargeback on part of a payment, so you end up having to chargeback the entire rent check, and now he can evict you. "I used to be the sort of person who would tell you that I've left money for you somewhere and in fact not have done so, and I also used to be the last person you'd expect to do something like that. I've not done this exact thing but I've done similar. Not gonna go into detail but at that time I was in a state of poverty, barely able to buy food and drink, and the money I saved by ""conning people"" in similar ways was spent on food and warmth.  Personally, I think she's going through a very hard patch financially and as such has done exactly that. Me? I'm not a landlord and I'm probably far too generous. I would explain that I think she's lying but let it slide this month. Clearly a property owner is more financially capable of soaking up this expense than a tenant.  On the other hand, you don't become a property owner and landlord by letting people get away without paying their rent.  All in all, I would probably push for a 50/50 decision. She pays half rent this month which alleviates her finances a bit if she is genuinely in trouble and has lied, and you still get something for your efforts. If you're lucky, when you suggest it she will come clean. I would make it clear if you do or don't believe her, as she may well confess if you express your doubts. If she does, I wouldn't hold her to paying the full amount unless she offers to do so. Also, make it very obvious that this can and will not happen again. Next time, she gives you cash or uses a banking service. Goes without saying I guess.  You should note that legally speaking, by accepting anything other than full payment you could be acknowledging that she did attempt to make a payment and any future legal cases will not consider that favorably for you. I would strongly recommend discussing this with a solicitor before agreeing to anything other than full payment." "For political reasons, almost all governments (including the US) spend more money than they get from taxes etc.  There are a number of things a government can do to cover the difference: Most governments opt for selling bonds.  The ""National Debt"" of a country can be thought of as being the sum of all the ""Bonds"" that are still paying interest, and that the Government hasn't Redeemed. It can all go horribly wrong.  If the Government gets into a situation where it cannot pay the interest, or it cannot Redeem the Bonds it has promised to, then it may have to break its promise (""Default"" on its payments).  This makes the owners of the Bonds unhappy and means potential buyers of future Bond sales are less likely to want to buy the Governments new Bonds - effectively meaning the Government has to promise to pay more interest in the future.  Recent examples of this include Argentina; and may include Greece soon. The US is in the fortunate position that not many people believe it will Default.  Therefore the new Bonds it sells (which it does on a regular basis) are still in demand, even though its interest payments, and promises to Redeem Bonds are huge."