Anyone know why landlords don't permit rent on a credit card?

[barkley]

Your Federal student loans also don't take CCs, etc.

i was VERY surprised when my oldest graduated in 2018 to find that federal Perkins Loans COULD be paid with a credit card. we looked at student loans during attendance as interest free money and a way the money we had earmarked for paying for school to earn interest during those years if it continued to sit in the bank, so following graduation when we received a letter from the university (which administered Perkins Loans when they were still offered back then) and it gave the option of making payments by credit card with NO added fee I paid it in full and happily pocketed the cash rewards my credit card paid out.

 

[tony67]

NO added fee

That is unusual, I always see some ridiculous percentage to use a CC to pay things like that, or taxes etc..

No doubt its worth it if you can get points and are paying it anyway.

 

[TheIncredibles!]

Credit card processing fees plus the an ability to dispute a charge so rent isn’t really secure until you’re past the point where it could be disputed.

 

[Mackenzie Click-Mickelson]

i was VERY surprised when my oldest graduated in 2018 to find that federal Perkins Loans COULD be paid with a credit card. we looked at student loans during attendance as interest free money and a way the money we had earmarked for paying for school to earn interest during those years if it continued to sit in the bank, so following graduation when we received a letter from the university (which administered Perkins Loans when they were still offered back then) and it gave the option of making payments by credit card with NO added fee I paid it in full and happily pocketed the cash rewards my credit card paid out.

Yeah that's pretty unusual, normally it either strictly can't be done or the processing fees are way higher than is worth it, I know some people have tried going a 3rd party route but that also has fees. Just about everything I can find online says you can't pay a Federal loan with a CC, one source even said "federal regulations generally prohibit it." It wasn't an option for me for sure.

I know with my Federal loans there was a reduction in interest rate for EFT (via you bank account).

 

[tvguy]

Landlord here. Two reasons. Processing fees and chargebacks.

My margins are already beyond slim (in fact, thanks to a s couple of bad tenants in a row, I have lost money each year for the last several years). If I accepted cards, I would have to charge the tenant the credit card processing fee and that would offset any credit card perks they were hoping to build.

And if they are using the credit card as a short term loan, I can almost guarantee they will not finish out their lease. Tenant turnovers and evictions are very expensive so I want a tenant who is able to make the monthly rent without using a credit card to pay. Plus, my late fee is only 5% but their interest payment is likely 25% or higher so they are better off just paying the late fee.

Chargebacks would likely be used by poor tenants as a way to delay eviction and bail on the last few months rent.

Honest question, why stay with it if you are losing money? I have heard of the IRS disallowing deductions for businesses that consistently lose money, considering them hobbies not businesses. I have considered being a landlord when we inherited our parents houses, but in those situations they would have been owned free and clear with no mortgage. No expert here, but just seems the landlords I know that are doing well have multiple rentals and they are all paid off. A friend is business manager for a couple who over 300 apartment units and have owned them 40 years so there is no mortgage. And they save a lot by buying appliances, etc in bulk. They don't fix broken refrigerators, stoves and dishwashers, they just pull a new one out of their warehouse. They bought 100 refrigerators for $90 each. Why would you spend $125 for a service call when you can put a new unit in for $90?

 

[china mom]

Honest question, why stay with it if you are losing money? I have heard of the IRS disallowing deductions for businesses that consistently lose money, considering them hobbies not businesses. I have considered being a landlord when we inherited our parents houses, but in those situations they would have been owned free and clear with no mortgage. No expert here, but just seems the landlords I know that are doing well have multiple rentals and they are all paid off. A friend is business manager for a couple who over 300 apartment units and have owned them 40 years so there is no mortgage. And they save a lot by buying appliances, etc in bulk. They don't fix broken refrigerators, stoves and dishwashers, they just pull a new one out of their warehouse. They bought 100 refrigerators for $90 each. Why would you spend $125 for a service call when you can put a new unit in for $90?

Good solid question.

You can write off rental losses and not be disallowed for being a hobby (not worded well but you get it). because it is not handled like a business by the IRS, it is a different category. BUT, once you hit a certain income threshold, you can't write off the passive loss against active income so I can't write off my rental losses against my salary. But, I can carry the losses forward and write them off against any future profits.

One reason I am not making money is that I do work full time and so I have property managers handle the properties. They, of course, get a monthly commission plus when repairs/replacements are needed, they hire out the work and are not as good at shopping for the best price as I would be. Also, I have one house that consistently has been a magnet for crappy tenants. That house is on the market - I am done with messing with it. It is a very nice house but I keep getting tenants who trash it for some reason. This last tenant did not cause any damage but I had a ton of eviction expenses.

Why do I do it?

The short term rental near Disney does not make money because of the purchase price/mortgage. but the ability to use it for personal use makes up for any annual losses so I am happy.

With the others, it is all about the capital gains. Example: I purchased a beach condo in 2001. Had an annual loss averaging about $1,000K a year but did use it for personal use. I sold it in 2021 for a $90,000 profit. So, if you calculate the $1K per year loss, I still made $70K. Now, you could argue that I would have made more if I had put money in the stock market but I had put very little down (I did two mortgages, one for 80% and one for 20% which you could do back then) So I really didn't have any cash to invest in the market except the $1K a year.

Plus I like buying houses

 

[Magical2017]

Not sure if anyone has mentioned this, but have you tried using Plasitq? There is a processing fee of 2.9 percent so you are covering the fee. It's not something I have used but I have heard about this company in another group.

 

[Imzadi]

I also expect it could get complicated if there were a dispute and a tenant tried to have a rental charge reversed and landlords just don't want to get involved in that.

This is the correct answer. How would they deal with renters constantly requesting charge backs?

THIS.

Some of you sound young, to be thinking it has anything to do with fees. When I first started renting, decades ago, way before credit cards were as popularly used as now, landlords & owners wanted CASH as their first choice. Bank checks (written out and funds guaranteed by the BANK, which couldn't be canceled or BOUNCE as their second choice. (Bank checks are not the same as your personal bank account checks with a bank's logo.) Or bank money orders or postal money orders as they also can't be canceled or bounced. CASH is king, or one of those equivalents.

Only after they have the security deposit in hand, which is 1-2 months rent, in addition to the current month's rent, do they then allow personal checks. They will know in 3-5 days if a check bounces and then can proceed to get you out if they have to. (They STILL have that security deposit, so that month is taken care of.)

With a credit card charge, one could possibly wait to the last day allowed by the credit card company to dispute the charge and get a chargeback for a month they already spent in an apartment. So, if a renter was allowed the whole 30 days before requesting a chargeback, the owner/landlord would be out that amount of time to look for a new tenant while trying to get the deadbeat renter out.

Nope, nope, nope. They want CASH or the equivalent at the beginning of the month, that the money is good and paid. Simple. Easy. Done.

 

[MillauFr]

THIS.

Some of you sound young, to be thinking it has anything to do with fees. When I first started renting, decades ago, way before credit cards were as popularly used as now, landlords & owners wanted CASH as their first choice. Bank checks (written out and funds guaranteed by the BANK, which couldn't be canceled or BOUNCE as their second choice. (Bank checks are not the same as your personal bank account checks with a bank's logo.) Or bank money orders or postal money orders as they also can't be canceled or bounced. CASH is king, or one of those equivalents.

Yep 55 years young.... I thought about renting but wouldn't have the stomach for it. I heard horror stories about coworkers kicking out deadbeats. With my luck I would rent to a nice family with stable jobs, then the husband would be a wancker and run off with is secretary, the wife would get cancer and lose her job, then she couldn't pay. I wouldn't be able to kick her and her young kids out of the rental. I would let them stay for free.

 

[barkley]

With a credit card charge, one could possibly wait to the last day allowed by the credit card company to dispute the charge and get a chargeback for a month they already spent in an apartment. So, if a renter was allowed the whole 30 days before requesting a chargeback, the owner/landlord would be out that amount of time looking for a new tenant while trying to get the deadbeat renter out.

heck they could get some extended time not paying by using the dispute process! i just had to do one on a purchase and found i had 60 days from the time it posted so someone could be paying but then use the dispute process 2 months down the line with each payment to pull the money back from the landlord.

 

[goofyernmost]

Where I rent my apartment, they do not do direct deposit (fee's), no credit cards or cash either. They only accept checks and that is a pain even if there is not because of a money shortage. My bank will cut a check charged to my checking account and mail it to my landlord every month at no charge to me at all. I suspect that there is a good chance that will not last forever. It must be fairly costly to pay for the checks, print them, stuff the envelopes and pay for the postage. Oh, well... at least for as long as it lasts.

I prefer the direct deposit, but that does open up the chance for them to have some degree of access to my money without my knowledge. It hasn't ever happened but it is aways a possibility.

 

[2010dvcfan]

Bought my first rental house in 1993, been accumulating them for 31 years now, it's a great business and has provided for my family in ways I never dreamed possible.

However, it is not near as profitable as it use to be, society as a whole is not the same as it was years ago people are not as appreciative as they use to be that you were providing them a place to live. The mutual appreciation and respect in general is dissolving. Everything is more expensive from the hot water heater and roof replacement to taxes and insurance bills.

Large cooperations that own hundreds of units do take credit cards and I am certain that the fee is calculated in the cost of the monthly rent fee if it is being offered. (even if you don't pay by credit card)

I do not take credit cards it is not a wise choice for rent to paid in that manner, even for airline points or cash back. My average rent is $1650 a month if the tenant paid the 3% fee that would be $49.50 just to use a credit card. Even if you pay the card off every month that's a fair bit of money that could be invested annually into their 401K or savings to buy their own house. Bottom line is I wouldn't agree or encourage behavior like that to anyone. I wouldn't do it myself then I wouldn't agree to it in a contract. I would have trouble sleeping at night if a young family made this terrible decision every month.

The only manner I accept rent is Zelle payment now, it's digital immediate transfer of money from their account to my account and it is labeled on the deposit line with their name for convenient accounting purposes. It avoids returned checks, lost checks in the mail and saves me a huge amount of time in line at the bank drive thru. And the unsafe practice of people following me from bank to rob me which yah that's a thing in our world now.

Disputing the rent wouldn't be a deciding factor for me if the tenant was in the property for that month or left their items in the home they would owe that rent. That's all I believe you would need to explain in writing to the CC and the dispute would be rejected. It's the fees no matter who pays them it's a bad practice IMO.

 

[tvguy]

Where I rent my apartment, they do not do direct deposit (fee's), no credit cards or cash either. They only accept checks and that is a pain even if there is not because of a money shortage. My bank will cut a check charged to my checking account and mail it to my landlord every month at no charge to me at all. I suspect that there is a good chance that will not last forever. It must be fairly costly to pay for the checks, print them, stuff the envelopes and pay for the postage. Oh, well... at least for as long as it lasts.

I prefer the direct deposit, but that does open up the chance for them to have some degree of access to my money without my knowledge. It hasn't ever happened but it is aways a possibility.

My daughter bought a house five years ago and had to have checks printed because so many of the service people she had to use were cash or check only. She sold her house, closed yesterday, and again, many of the services she needed, roof repair, pest inspection are still cash or check only.

 

[barkley]

My daughter bought a house five years ago and had to have checks printed because so many of the service people she had to use were cash or check only. She sold her house, closed yesterday, and again, many of the services she needed, roof repair, pest inspection are still cash or check only.

that's been the case around here for years but i've seen a shift recently. where it was that paying by credit card was either not accepted OR the customer would face a fee for doing so we are now seeing more accepting credit cards. i was very surpised when we had a $16K job done a few months ago to find that neither of the companies involved discouraged using a credit card. we are spending $15K on a new hvac this week and it's the same-company accepts credit cards with no upcharge. i have to wonder if the post pandemic surge of customers has died down to an extent and inflation is causing people to pull back on large expenditures unless they have the ability to charge them and pay them off over time.

oh-our pest and yard service previously charged a fee for credit card usage but in the last year waived them as well.

 

[White Cat]

that's been the case around here for years but i've seen a shift recently. where it was that paying by credit card was either not accepted OR the customer would face a fee for doing so we are now seeing more accepting credit cards. i was very surpised when we had a $16K job done a few months ago to find that neither of the companies involved discouraged using a credit card. we are spending $15K on a new hvac this week and it's the same-company accepts credit cards with no upcharge. i have to wonder if the post pandemic surge of customers has died down to an extent and inflation is causing people to pull back on large expenditures unless they have the ability to charge them and pay them off over time.

oh-our pest and yard service previously charged a fee for credit card usage but in the last year waived them as well.

You pd a cc fee. You just don’t know you did.

 

[tvguy]

that's been the case around here for years but i've seen a shift recently. where it was that paying by credit card was either not accepted OR the customer would face a fee for doing so we are now seeing more accepting credit cards. i was very surpised when we had a $16K job done a few months ago to find that neither of the companies involved discouraged using a credit card. we are spending $15K on a new hvac this week and it's the same-company accepts credit cards with no upcharge. i have to wonder if the post pandemic surge of customers has died down to an extent and inflation is causing people to pull back on large expenditures unless they have the ability to charge them and pay them off over time.

oh-our pest and yard service previously charged a fee for credit card usage but in the last year waived them as well.

I think it is still in a state of flux. My wife bought a headstone for a relative's grave and the headstone company took a credit card, but the representative said they soon won't take credit cards. They will be shifting to a company that will finance those purchases for their customers. Sort of like what all the mattress and furniture stores do with their "no interest for a year" deals. They sign you up with a lender (often Synchrony Bank) who agrees not to charge interest for a year, but hopes you take longer than a year to pay off the balance so you start paying interest. With the credit card, the merchant ends up paying the fee, with this arrangement, the lender ends up paying the merchant a fee for signing up people.

 

[barkley]

You pd a cc fee. You just don’t know you did.

as far as the pest and yard service (at least for existing customers-don't know what newbies are charged) we've seen no greater annual increase (percentage wise) than when they were charging year over year not accepting credit cards. with the larger end projects i realize it's likely budgeted into their price but if i can't negotiate a discount for cash then i will still use a card b/c at least i'm offsetting it a bit by virtue of the card rewards (i don't do cards w/an annual fee and don't pay interest on the purchase).

Sort of like what all the mattress and furniture stores do with their "no interest for a year" deals. They sign you up with a lender (often Synchrony Bank) who agrees not to charge interest for a year, but hopes you take longer than a year to pay off the balance so you start paying interest

this first became popular when i worked many years ago for a furniture store chain. at the time most were financed in house and the proven formula was that the average 'flakey' customer would pay for 3 months on time before their first late or missed payment. in that 3 months the majority of our cost was recouped (furniture had a 100% markup at the time). in the fine print of those contracts (which almost no customer read) was how much the penalty charges for a late payment was and how just one late or partial payment entitled the lender to wait until the end of the promotion period and RETROACTIVLY apply the full (often psycho high) interest rate to the purchase price. so 3 months in we were paid, at month 4 or 5 the customer was a day or two late on paying so at month 12 even if they had paid every other payment in full and on time they realized they still owed as much if not more of the original balance due to the retro interest application. there were several furniture chains in california who saw higher profits from these lending practices than through actual furniture sales.

 

[tvguy]

this first became popular when i worked many years ago for a furniture store chain. at the time most were financed in house and the proven formula was that the average 'flakey' customer would pay for 3 months on time before their first late or missed payment. in that 3 months the majority of our cost was recouped (furniture had a 100% markup at the time). in the fine print of those contracts (which almost no customer read) was how much the penalty charges for a late payment was and how just one late or partial payment entitled the lender to wait until the end of the promotion period and RETROACTIVLY apply the full (often psycho high) interest rate to the purchase price. so 3 months in we were paid, at month 4 or 5 the customer was a day or two late on paying so at month 12 even if they had paid every other payment in full and on time they realized they still owed as much if not more of the original balance due to the retro interest application. there were several furniture chains in california who saw higher profits from these lending practices than through actual furniture sales.

Sort of like those "we can finance anyone" used car dealerships. They are not in the business of selling cars, they are in the business of selling financing. I know a mechanic that does work for one of them, and one car was sold and returned/repossessed 3 times in one year. And if you walk in with cash in your hand, odds are, they won't sell you a car.

 

[NYCgrrl]

And if you walk in with cash in your hand, odds are, they won't sell you a car.

That would not work in my neck of the woods. Cash or financing is all good although one is obviously better. Those radio commercials make me giggle.

 

[Dznypal]

a PP brought up the fact of renters not having to pay rent for a time when covid was starting out
just thought but what did the owner get out of it if they had a morgage Im sure they still had to pay it correct

or did just lose out on all the rent they were entitled too