Real Estate

Any downsides to getting rental income via e transfer rather than cheques?

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  • May 30th, 2017 7:47 pm
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Deal Fanatic
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Dec 24, 2002
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Any downsides to getting rental income via e transfer rather than cheques?

I am a new landlord or soon to be, I have a good prospective tenant who has a stable job and good credit , she wants to pay by e transfer rather than cheques...any downsides for me?
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Deal Addict
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Aug 16, 2009
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None that I can see, in fact, its better than cheque. If they send an E-transfer it means they have money in their account (Cheques can bounce) and they is no way for them to put a stop payment on an E-transfer.
Deal Fanatic
Feb 9, 2009
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Downsides:

She may "forget" to pay
No paper trail of payment (who's the payment from?). A cheque will allow you to keep a copy of this.

I would prefer post-dated cheques personally... easier and no need to hunt the tenant down.
Deal Addict
Jan 20, 2016
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Houston, TX
Once it's more convenient while tenant is on good mood, it has drawbacks once he tried to "forget " about payment. With postdated cheque you at least can withdraw a money without his consent (if he has it however) but with etransfer you are at his good will.
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Deal Guru
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Mar 23, 2008
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Edmonton
rb wrote: I figure with a cheque you are also at Mercy of nsf charges ...
And how is that worse than the tenant just not sending it to you at all?

I'd vote for post dated cheques. You have an instrument of payment in YOUR hand that you can try to draw upon. You can go to the tenant's bank on their payday and get it cashed/certified. You can take them to the LTB for NSF fees, I would think.

C
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Feb 9, 2009
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And this is how landlords get burned.

Cheque is always proof.

What if tenant is on vacay? Or just says "hey payday is in six days can you wait" or ... the dreaded silence

You are asking for it with e-transfers

This tenant seems fishy to me.
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Dec 27, 2009
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Victoria, BC
I worked in property management, and we accepted online payments and e-transfers. No problems with them.
Deal Addict
Feb 21, 2004
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Montreal
The idea that post-dated checks are the safest method is old school thinking in my opinion. I use to live by it but less and less as the newer generation of tenants start renting.

A bad tenant who is financially unstable will NOT pay you whether it is with E-transfers or post-dated cheques (NSF)
A good tenant on the other hand will pay you no matter what.

Right now, I end up asking for 3-4 post-dated checks for new tenants to see how stable/good they are. If everything clears normally, I offer e-transfers afterwards.
Deal Addict
Aug 12, 2004
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Calgary
E-transfer is far more convenient. Previous tenant paid by e-transfer the first of every month, missed one day only once when she forgot. Current tenant gave us post date cheques. Now I am at the mercy of my wife forgetting for weeks at a time to cash the cheque and send it to my account (she wants to manage the rental while the mortgage comes from my account). Needless to say, e-transfer helps in more ways than one.
Deal Guru
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Mar 31, 2008
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Toronto
We have a tenant that e transfers. The transfer actually has the tenant's name on it in the bank statement.
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Mar 23, 2003
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Personal opinion. Sometimes old skool is the right school in this situation
Factual reasoning.
Etransfers can be rescinded up to the point of actual acceptance with password by the receiver. {I speak from experience}
HoTiCE_ wrote: The idea that post-dated checks are the safest method is old school thinking in my opinion. I use to live by it but less and less as the newer generation of tenants start renting.

A bad tenant who is financially unstable will NOT pay you whether it is with E-transfers or post-dated cheques (NSF)
A good tenant on the other hand will pay you no matter what.

Right now, I end up asking for 3-4 post-dated checks for new tenants to see how stable/good they are. If everything clears normally, I offer e-transfers afterwards.
Deal Fanatic
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Dec 27, 2009
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sidshock wrote: Personal opinion. Sometimes old skool is the right school in this situation
Factual reasoning.
Etransfers can be rescinded up to the point of actual acceptance with password by the receiver. {I speak from experience}
Meh, someone can stop payment on a cheque too. They can also bounce a cheque. Never once had a problem with e-transfer. Quickest way to get your money.
Deal Guru
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Mar 23, 2008
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Chickinvic wrote: Meh, someone can stop payment on a cheque too. They can also bounce a cheque. Never once had a problem with e-transfer. Quickest way to get your money.
You never had to chase anyone down because they "forgot" to send in their e-transfer? What percentage of your properties were paid by e-transfer? Just curious... :)

C
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Dec 27, 2009
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CNeufeld wrote: You never had to chase anyone down because they "forgot" to send in their e-transfer? What percentage of your properties were paid by e-transfer? Just curious... :)

C
Nowhere near as many as had who didn't submit rent cheques. I'd say it was just getting popular in around 2012-2013 (when I stopped working in property management). More and more tenants were choosing it. I'd say it was less than 10% paid that way. I'm sure it is more and more common now.

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