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Ben FranklinHow you receive your rent payment is just as important as how much rent payment you receive.   This is almost like asking the question, which do you prefer the luxury of time or money.  Some landlords give discounts on the rent price if tenants pay by direct deposit because it gives the landlord the convenience of saving time when collecting the rent payment.  If your roommate pays rent by direct deposit, giving a discount to them is entirely up to you.   I found that my past roommates were entirely receptive to the idea of direct deposit because that’s the way they paid most(or all) their bills.  For this reason, I do not give discounts if they pay by direct deposit because it’s pretty much a win-win situation for all parties.

I have accepted rent checks and cash from my roommates in the past; I found these to be the most common annoyances:

  1. It’s annoying to find time to run to the bank to deposit the rent money
  2. You and your roommate seem to be never home at the same time for them to physically hand over cash or a check and you have to find time to be home at the same time.
  3. When you and your roommate are home, You can never get the excuse “Can I get you cash next week or can I get cash to you on <insert a day of the week here>, thus

To avoid these annoyances, I ask my roommate to setup an automated direct deposit into my checking account.  Doing so, I found it extremely convenient because:

  1. You know the rent payment will be deposited on the first of every month
  2. You don’t have to be around when your roommates are home to collect the rent money
  3. With the automated deposit setup on the first of the month, you can be sure you are the first one to be paid.
  4. Your roommates will do everything in their power to have sufficient funds before the scheduled direct deposit to avoid any over draft fees.

With the direct deposit setup, I don’t have to go to the bank.  I don’t have to be around when my roommates are around for them to physically hand over cash or a check.  I can expect the rent payment to be in my checking account on a certain date.  If the money doesn’t appear in my account, then I can start to ask questions.

Key Tips for Setting Up Direct Deposit as Rent Payment

  1. Fixed Rent – You’ll have to charge a fixed price for monthly rent.  It’s just a royal pain in the ass to separate utilities because the utilities will vary from month-to-month.
  1. Create a second checking account – I created a second checking account and gave out this bank account information to my roommates for the direct deposit payment.  By doing this, I don’t have to rely on one bank account .
  1. Tell your roommates before they move in – I tell my roommates that I prefer direct deposit before they move in.  So when they move in, they are not like huh? How do I do that?  Tell them to talk to their bank and set it up.  So far, no one has had a problem with setting up a direct deposit.  I had one roommate that insisted paying cash on the first of the month.   I didn’t get his rational, he was employed as office professional getting paid via direct deposit, but didn’t want to setup and direct deposit.  So, I agreed to his request of receiving cash and made sure to schedule a day that both of us were home around the 1st of each month.  If your roommate does not want to setup a direct deposit, schedule a day on or around the 1st of the month to receive the rent payment.

Creative Commons License photo credit: nathanmac87

{ 2 comments }
  • Mark July 11, 2015, 4:32 pm

    What about giving your roommate(s) a receipt for paying the monthly rent?

    Reply
    • Mike July 13, 2015, 9:36 am

      The electronic method keep a record for the transfer/payment

      Reply

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