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There are negative consequences with collecting rental income through Venmo, PayPal, Zelle, and direct deposit. I hope you never experience these problems, but I want to educate you on worst case scenarios.

• Zelle Deposit Not Showing
• Zelle Deposit Scams
• What Do Zelle Deposits Look Like
• Zelle Deposit Limit
• Zelle Deposit Account

It is important that you treat your rental property management like any other business.

PayPal, Venmo, and Zelle are similar to direct deposit. They allow the tenant to pay at will, which gives the tenant more control. When you have a problematic tenant, you do not want them to be in control.

Here are the major problems that arise when you allow the tenant to be in control:

1. Inability to evict non-paying tenants
   If you allow the tenant to pay via their own mechanism, then they can deposit partial rent into your account. Unprofessional investors and managers allows this to happen and have a difficult time evicting tenants. By accepting partial rent, you can forego your ability to evict them.
2. Clawbacks on the rent paid
   If a tenant uses a consumer-friendly method to deposit rent, the consumer-friendly vendor typically takes the side of the customer (i.e. the tenant) in disputes. Therefore, the money can be retracted if the tenant disputes the rent. This typically happens after they move out, especially if they don't agree with your security deposit refund. A reasonable tenant suddenly becomes unreasonable.
3. Lease gets automatically renewed
   If you do not want to renew a lease, you set yourself up for a difficult court case when you allow the tenant to deposit money at will. By allowing them to use Venmo, PayPal, or direct deposit, you may have already “accepted” next month's rent and are unable to turn over the property sooner.

The Request feature within Zelle is only available through Wells Fargo using a smartphone, and may not be available for use with all small business accounts at this time. In order to send payment requests to a U.S. Mobile number, the mobile number must already be enrolled with Zelle. Zelle is a fast, safe and easy way to send and receive money with friends, family or others in minutes, 1 between domestic bank accounts at U.S. Financial institutions. If you have a bank account at any major financial institution, link it to the Zelle application and you can buy Localbitcoins. When you’ve maxed out the limits on your crypto exchange, use the Zelle app on your phone to send Localbitcoins directly to your Bovada account. Make sure you have the Zelle app open before following the steps below: 1. If your BBVA bank has Zelle already you should be able to log in to your account then go to transfer money and it should be in there. All you need is the person's phone number or email address. If your BBVA account doesn’t have Zelle yet you can download the app, assuming you have a debit card to set it up with. I think that should cover it!

Zelle provides no deposit account or other financial services. Zelle neither transfers nor moves money. You may not establish a financial account with Zelle of any kind. All money will be transmitted by a Participating Financial Institution. THE TRANSFER SERVICE IS INTENDED TO SEND MONEY TO FRIENDS, FAMILY AND OTHERS YOU TRUST.

Now, let's take a deeper dive into each of these three online rent collection methods and real-life examples of what can go wrong.

The problem with direct deposit

I heard a case the other day, which is too unfortunate not to share. An owner sent a 3 day notice to pay rent or quit. After 3 days, the tenant still did not pay. The owner hired an expensive lawyer to take the tenant to court. One day before the court case, the tenant deposited 25% of the total balance due directly into the owner’s bank account (the tenant had the owner’s routing and account number). The owner could not evict the tenant because “partial rent was accepted.” The owner lost the court case and the tenant is living in the property — at a deeply discounted price. The owner not only does not have the full rent, but also had to foot the bill for the lawyer.

The problem with PayPal

First, you leave it up to the tenant to determine the type of payment. If the tenant selects rent as a 'goods and services' transaction, then you can incur fees. PayPal also does not make it as easy to automate your process, systematizing the late fees, allowing control over payments, and showing you are professional in the rental industry.

Second, there is a money back guarantee with PayPal. If the customer representative 'feels' you have defrauded the customer, then they will give the money back to the customer. Imagine if a tenant calls to argue about the security deposit refund. You are leaving it up to a PayPal representative (who has no property management experience) to determine whether or not to refund the tenant.

The problem with Venmo

It’s free — what’s the catch? Nothing in life is free and cheap alternatives cost you in the end. This is a consumer app. Anyone can pay anyone, and the amount is automatically accepted. The problem is identical to the situation described with accepting direct deposit.

In addition, the tenant can cancel their Venmo transaction before it reaches your bank. As this Money article describes, Venmo should not be used for business transactions. The payment platform was built as a convenient way to pay people you know personally.

The problem with Zelle

Zelle may be a better option than PayPal and Venmo (since it goes direct to your bank account), but anyone can pay you and you don't want to accept partial payments from tenants. In addition, banks that are not partnered with Zelle have limits on the amount of money that can be sent, which means you will be accepting partial payments from some tenants.

For example, at the biggest U.S. banks, Zelle Pay daily and monthly limits tend to be around $1,000 per day and at least $5,000 per month, respectively.

Zelle Deposit Not Showing

One bad tenant can destroy your annual cash flow. Do not let that happen to you. Your only source of income is rent. You do not want to set up your rent collection process to allow the tenant complete control over payments.

Tenants refusing your payment method

During initial interactions with a tenant, he/she may refuse to use your preferred method of rent collection. This type of tenant has always been a red flag to me. They are looking for an unprofessional landlord or manager, where they can make excuses for not paying according to the lease agreement.

It is important that you have a solid tenant screening process and an amicable tenant who wants to work with you. You also want to make sure to work with them, by offering one offline method and one online method (some States require an offline form of payment).

The best ways to collect rent

There is a reason professional property managers and real estate investors request rent through only certain methods. The best methods are a money order (for the full amount due) or an online property management system. If you use an online system, make sure it has the following features:

1. Automatic payment scheduling — monthly alerts will reduce the risk of past due payments and help track payments
2. Ability to accept only full payments — reduces the risk of partial payment that prevent moving forward with an eviction in many States
3. Automatic late fees — reduces the risk of late payments by always sending out late fee notices
4. Ability to cancel future payments — if you are starting an eviction, there should be a process in place to cancel the remaining balance of the payment

My top concern with new landlords and real estate investors is that they don’t treat their rentals like a business. They use existing consumer tools that amplify the risk associated with managing rental properties. Have you ever seen a store clerk tell you that you can pay via Venmo or go to your bank to transfer money into their account? No. There is a reason for this. And, rental properties have even more rules and regulations in the court of law.

Zelle Deposit Scams

Venmo and PayPal are great ways to split dinner bills with friends. Zelle is a great way to send money to your friends for a travel experience. But, they are not great ways to set up a professional and sustaining rental business.

Finding and Selecting the Best Tenant

What Do Zelle Deposits Look Like

Zelle Deposit Limit

Follow these steps to Send money with Zelle^®:

Zelle Deposit Account

1. Go to Send money with Zelle^®
   Sign on to Wells Fargo Online, then go to Send Money with Zelle^® located under Transfer and Pay in the main menu. In Wells Fargo Mobile, sign on and tap Zelle^® in the bottom bar. If you’re not yet enrolled, you’ll be asked to accept our terms and conditions. We recommend you also enroll an email address or U.S. mobile number and link a deposit account so you can receive money with Zelle.
2. Add or select recipient
   To add a recipient, select the “ + ” icon at the upper right of your screen and enter your recipient’s information. If your recipient is already in your list of recipients, select their name (smartphone) or the arrow to the right of their name (desktop and tablet) to continue.
3. Enter amount and select your funding account
   Enter the amount you want to send and choose an account to fund your payment. On desktop or tablet devices, you may have the option to select a delivery speed. Next, select Continue.
4. Review and send
   Carefully review the details of your payment before you send it. If it’s the first time you’ve sent money to this recipient, we will send you an access code to help verify your identity. If your recipient’s U.S. mobile phone number or email address is enrolled with Zelle, we’ll display the name of the recipient on record before you continue (in some cases, this may only be a first name). After you send your payment, you’ll get a confirmation screen with the details of your payment.
5. Recipient is notified
   Your recipient will be notified by email or text message with the details of your payment and instructions on how to enroll to receive the money if action is necessary.
6. Recipients must enroll to receive money
   If your recipient is not enrolled with Zelle, they’ll need to enroll to receive money. They will have fourteen (14) days to complete their one-time enrollment using the same email address or U.S. mobile number you used to send them the payment. If your recipient does not enroll with Zelle within 14 days, the money will be returned back to your account. Once your recipient enrolls with Zelle, this and all future payments to them are typically delivered in minutes. In some cases, we may need to delay or block a payment for your protection.