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Important Rent Payment App Features Not Found On Venmo

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Remen Okoruwa
Remen Okoruwa Published : May 19, 2022

Venmo is a popular mobile payment app that many tenants use to pay rent money. However, essential features for rent payment and collection are not found on Venmo. For an independent landlord or rental property owner, the lack of these crucial rent collection features could severely impact your rental revenue and cash flow. 

For example, using Venmo for rent payments doesn’t allow tenants to set up recurring online payments, split rent with roommates, or report rent payments to credit bureaus. The only advantage is that Venmo will enable tenants to pay rent free. 

And for landlords, Venmo is even more restrictive for rent collection. Vital features missing on Venmo for landlords include partial payment blocking, rent reporting, payment reminders, and late fee calculation. In addition, even though tenants can use Venmo to pay rent for free, landlords must pay a transaction fee for every incoming payment. 

Collecting rent on time every month is key to running a successful rental business. Therefore, the payment methods in the lease agreement should simplify the rental process. The app for rent payments should make it easy for tenants to send rent money. And the money transfer app must have payment controls for landlords. 

This article explores whether you should let tenants pay rent money using Venmo. You will also learn why using a dedicated rent payment app is better than Venmo for online rental payments

What is Venmo For Rent Payments?

Venmo is a peer-to-peer payment service to make instant money transfers and pay bills like rent. Renters can use Venmo to make monthly rent payments by entering the landlord’s contact details and the rent amount. The rent money then arrives in your Venmo account, usually instantly.

Should You Use Venmo to Pay Rent?

Tenants can use a digital wallet like Venmo to pay rent every month. Although the payment service is free, there several reasons to consider a Venmo alternative. For example, it’s easy to pay the wrong person. And because you can’t cancel a Venmo payment, you will have problems getting your money back.

Should You Use Venmo to Collect Rent Money From Tenants?

Venmo may seem like an easy solution to collect rent from tenants. For example, Venmo makes rent collection easier than accepting cash payments or processing rent checks. However, Venmo is not a free app for running a rental business. And it lacks several vital features landlords require.

Related reading: Misconceptions about using Venmo to collect rent money.

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How to Collect Rent Free Online

Collecting and paying rent for free online is faster and more secure than paper checks or cash payments. Most digital payment apps like Venmo let tenants pay rent free every month. However, landlords using Venmo must pay fees for each incoming digital transaction. Therefore, you should use a dedicated app to accept payments from tenants. 

Rental Payment App to Collect Rent Free Online

There are many advantages to using an online rent payment system designed for landlords and tenants. For example, Rentdrop has many features lacking in Venmo for rent payments. Rentdrop facilitates on-time rent payments every month and puts landlords in control of rent payments. Additionally, Rentdrop lets you collect rent free.

Related reading: Venmo vs. Rentdrop for rent payments.

7 Vital Rent Payment Features Missing on Venmo

Venmo doesn’t give tenants and landlords flexibility to make online rent payments. The rent payment features not found on Venmo could even put your rental business at risk. Here are seven features missing on Venmo, making it unsuitable for accepting payment of rent.

1. Block a partial payment

Landlords can’t reject a Venmo payment. The lack of a feature to decline a rent payment on Venmo makes it impossible to block a partial payment. And stopping partial rent payments is crucial when trying to evict a tenant for non-payment of rent. 

Here’s a scenario during an eviction process where Venmo could put your rental business at risk. Suppose you have started eviction proceedings against a tenant for a lease violation. In that case, it’s crucial to block a partial payment. Otherwise, the delinquent tenant can pay a few dollars in rent and derail the process. 

The Rentdrop solution

Rentdrop gives landlords complete control of rent payments. The option for landlords to block a partial rental payment amount forces tenants to pay rent debts. This feature helps you evict a non-paying tenant faster or ensure you get the rental payment in full. 

No transaction fee for landlords

Venmo fees are expensive for landlords and property owners running a rental property business. Of course, there is no fee for tenants to pay rent by debit card, bank transfer, or Venmo balance. However, Venmo charges landlords expensive processing fees. This means that using Venmo as a rent payment app can cost hundreds of dollars in fees.

The Rentdrop solution

Rentdrop is free for landlords and tenants to pay rent. First, there is no subscription fee to use the online rent collection app. Also, there is no cost to landlords to accept debit card, bank transfer, or credit card payments. And your tenants can pay rent money every month without incurring fees. 

The only exception for tenants is that they pay a small fee for making rent payments by credit card. This means that, unlike Venmo, landlords don’t pay a cent to accept a rent payment. 

Split rent with roommates

Venmo doesn’t have the option to split rent with roommates. Although Venmo is a popular digital payment app to split bills, it’s not a rent collection app. Therefore, co-tenants can’t use it to pay their share of the rent to landlords directly. In a multi-tenancy rental unit, not having a split rent feature can cause issues with evicting a single tenant. 

The Rentdrop solution

With Rentdrop, each paying tenant on the lease pays rent directly to landlords. This handy feature is excellent for tenants to split the rent. However, it also puts you in control of rent payments. For example, suppose there is an issue with one tenant not paying rent. In that case, you can start eviction proceedings against the individual, not the group of renters. 

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Recurring payments for renters

Venmo doesn’t allow tenants to set up automatic rent payments. The only option for tenants is to initiate a one-time rental payment every month. Tenants cannot use Venmo to set recurring payments on their schedule and pay rent on time weekly, bi-weekly, or monthly.

The Rentdrop solution

Rentdrop makes it easy for tenants to pay rent on their schedule. They can set a recurring payment once and then forget about it. The benefits to tenants are that they never miss a payment and avoid late fees. 

In addition, landlords benefit from Rentdrop because it minimizes the number of late payments and secures healthy cash flow.

Report rent payments to credit bureaus

Venmo lacks the feature many tenants want landlords to provide—rent reporting to credit bureaus. In addition, using Venmo doesn’t allow tenants to use rent payments to build a healthy credit history. 

Think about it: rent is the largest recurring bill your tenants have. So would it not make sense to report timely payments to credit reporting agencies?

There is also a benefit for landlords in reporting rent to the major credit bureaus. It encourages on-time rent payments. Tenants who report rent to credit bureaus are more likely to pay rent on time. 

The Rentdrop solution

Rentdrop will soon have this much-requested option to report rent payments to credit bureaus. Offering this valuable service to tenants will set you apart from the competition. Moreover, it’s a service that potential tenants highly desire. 

Tenants know that paying rent on time can positively impact their credit score. This also acts as an incentive for tenants to pay rent on time.

Send payment reminders to tenants

Venmo lacks a feature for landlords to facilitate sending tenants automatic payment reminders. A simple, friendly email or SMS message to remind them about paying rent is an easy solution to reduce late payments. Unfortunately, Venmo doesn’t have a bulk messaging service.

The Rentdrop solution

Rentdrop has the helpful feature of sending automatic rent payment reminders to tenants. Landlords who use this simple solution find that most tenants pay rent on time every month. This avoids charging tenants late fees and prevents disputes over late rent. 

Automatic late fee calculation

Venmo doesn’t have an option to calculate late fees automatically. Because it’s not a property management app, you must do all calculations manually. This means that using Venmo for rent collection increases your administrative tasks. And there is always the chance of making a mistake when calculating late fees manually. 

The Rentdrop solution

Rentdrop is an app for landlords with a feature to calculate late payment fees automatically. The app takes into consideration the grace period, state rent control laws, and the number of days late. The late fees sum is then added to the following month’s rent—ideal for busy landlords.

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Rent Payment App — Features Lacking in Venmo

Venmo may be suitable for sending money to friends and family. However, it is a poor choice for landlords. Venmo lacks vital online rent payment options that successful landlords require. In some cases, using a digital wallet for rent collection can severely impact your rental income.

Rentdrop, on the other hand, is a fully-functional mobile rent payment app loved by landlords and tenants. Not only does it enhance the rental experience, but it also simplifies the entire rent collection process. 

Some of the additional excellent features of Rentdrop include:

  • Track rent payments
  • Rent payment history
  • Rent receipts
  • Complete control over rent payments
  • Collect rent for free
  • Multiple payment options—tenants can pay rent by credit card, debit card, or ACH bank transfer

Signup Now

Why not sign up for Rentdrop today to discover how easy online rent collection can be. Rentdrop puts you in control of rent payments. However, you also provide enhanced customer service because your tenants have tools and incentives to pay rent on time.

Topics: Rent Collection Apps