As a landlord, you would always want to receive your rental payment on time, without any major issues. Problems arising when receiving rent can be troublesome for any landlord. When you always receive your rent on time, there is no need to worry, and you can have peace of mind. In this article, read about Why Landlords Should Never Use Venmo or PayPal to Collect Rent?
There are various ways in which landlords can collect their rent. A lot of landlords collect their rent through online payment options. While there is nothing wrong with it, using online payment options such as Venmo and PayPal has some drawbacks for landlords.
Why Landlords Should Never Use Venmo or PayPal to Collect Rent?
Although a lot of landlords use Venmo or PayPal to collect rent, many are not aware of the disadvantages of using these options for collecting rent. PayPal This article informs you about the downsides of using Venmo or PayPal to collect rent.
Why do landlords opt for Venmo to collect rent?
Landlords often use Venmo for collecting rent due to some of the advantages it provides. Some of the benefits of collecting rent with the help of Venmo are given below:
1) They are simple to use
Using Venmo is very simple, and that is why it is so preferred among landlords. Most landlords prefer an easy method for collecting rent, and Venmo offers them just that.
2) There is no charge for sending money
Venmo does not charge any fees for transferring money, which is a beneficial factor.
3) Innovative applications
Venmo allows for innovative applications and provides diverse functionalities for its users.
4) Has to option for dividing rent
Venmo provides an option for dividing rent. If two or more people are sharing a room, dividing rent is a great option provided by Venmo. You can use any landlord property management software instead of paypal.
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What are the disadvantages of using Venmo for collecting rent?
There are various downsides to using Venmo to collect rent. The drawbacks of using Venmo to collect rent are given below:
1) There are charges for business transactions
Payment of rent is considered a business transaction in Venmo. While sending money from one individual to another is free, completing a business transaction requires paying charges. This is a major disadvantage of using Venmo to collect rent.
2) There is the risk of the payment going to another person
Tenants have to input the relevant information about the landlord required for paying rent while using Venmo. There is a chance for the tenant to pay a person other than the landlord, in this case. This fault can be committed by both inexperienced and experienced people while paying the rent with Venmo.
The rent going to the wrong person can be a huge problem. It can become very difficult for the landlords to acquire back their payment in this situation. No landlord would like to come under this circumstance. This is one of the many reasons why it is advised to not use Venmo for paying rent.
3) It does not offer fast payment for free
It usually takes some time for the recipient to receive the payment through Venmo. Although there is an option in Venmo for fast payment, it is unfortunately not free. This is a significant downside of using Venmo for receiving rent.
Landlords do not want to receive their rental payments late. Using Venmo can create this problem for them. To relieve this tension it is recommended for landlords collect rent.
4) There is no safety net for landlords
There is usually no safety net for landlords while using Venmo for collecting rental payments. When a tenant pays their rent through Venmo but for some reason the landlord does not receive the money, there is no procedure for the landlords to get back their money. This can be a disastrous situation for landlords. Landlords have rented their properties for gaining income, and to avoid being caught in this mishap it is better to search for alternative methods to collect rent.
Why do so many people choose PayPal for collecting rent?
A lot of landlords prefer PayPal for collecting rent. This is due to some factors about PayPal which is favored by the landlords. A few of the reason why PayPal is so popular among landlords is given below:
1) Using PayPal is not difficult
Using PayPal involves a fairly straightforward process, and this is one of the reasons it is so favored by landlords. An easy process benefits landlords to save their time and thus relieves them from a lot of stress.
2) The maximum amount allowed for payment is high
PayPal allows its users to send a high amount of money in one go, without any issues. Payment methods that do not allow this can be difficult to deal with. PayPal helps a lot in this regard.
3) Allows for different ways of payment
Utilizing PayPal to pay rent can be done with various ways of payment. It does not matter if tenants use a debit card or something else, they can easily pay rent with them while using PayPal.
What are the disadvantages of using PayPal for collecting rent?
Various drawbacks exist to paying rent using PayPal. Some of the various reasons why landlords should not select PayPal for collecting rent are provided below:
1) No free option for rental payments
Using PayPal for sending payment is usually free. But due to rental payments being observed as a business activity, there are charges which are required to be paid. This fact about PayPal is something that bothers a lot of people and is one of the biggest reasons why using PayPal to collect rent must be avoided.
2) Free payments are not fast
Just like Venmo, it costs charges for paying money in a short time to someone while using PayPal. This is disadvantageous, and the lack of a free and fast-paying option is something that can be distressing for landlords.
3) There are not many functions for landlords
PayPal does not provide many functions for landlords. Although there are some applications, they are not much diverse and do not offer any specialized benefits to landlords.
The lack of useful applications specific to landlords is a huge flaw of PayPal.
4) Lack of a safety net
This drawback of PayPal is also similar to Venmo. There is no process through which the landlord can get back their payment if the tenant has sent it, but for some issues, the landlord has not received it. This can be a valid reason for frustration for the landlord and is one of the reasons to avoid using PayPal to collect rent.
Why Landlords Should Never Use Venmo or PayPal to Collect Rent? The bottom line
This article discusses the drawbacks of using Venmo or PayPal for collecting rent. While there are some great things about using this payment method, the disadvantages of using them are significantly higher than the advantages.
In this article, the downsides of using Venmo or PayPal to collect rent are given. Landlords are highly advised to not go for either Venmo or PayPal for collecting rent. There are various other methods for collecting rent that landlords can look into. Hope this article makes you fully aware of the negative things about utilizing Venmo or PayPal for rent collection.