If you’re tired of waiting for checks in the mail, chasing down cash-filled envelopes, or relying on unreliable payment apps, there’s a better way to collect rent. ACH rent payments securely withdraw money from your tenant’s bank account and deposit the funds straight into yours.
Tried-and-true ACH payments have become the industry standard for their low fees, reliable timing, and bank-level security. For landlords, they offer a set-it-and-forget-it approach that runs like clockwork.
Read on to get up to speed on everything you need to know about accepting ACH payments for rent. Because, as a rental property investor, your entire operation depends on collecting rent month after month.
Established in the 1970s, an ACH payment is an electronic transfer between bank accounts processed through the Automated Clearing House network. It offers a dependable alternative to checks or cash and handles recurring payments like rent, payroll, and utility bills.
ACH, used in nearly 65% of electronic rent transactions, has become the go-to method for rent collection in property management. With decades of proven utility, low fees, and direct bank-to-bank transfers, it gives landlords a reliable, hands-off way to collect rent.
ACH rent payments move money directly from your tenant’s bank account to yours. While the system runs quietly in the background, it follows a straightforward seven-step process:
ACH rent payments typically take between 1 and 3 business days to process. After a tenant authorizes the payment, the money leaves their account and moves directly to the landlord’s, faster than a check and more securely than cash or widely-used apps like Venmo or PayPal.
The 1–3 day wait occurs because ACH payments are grouped into batches and processed at set times throughout the day (rather than right away). And while the transfer isn’t instant, ACH’s reliability, security, and affordability make the short delay worthwhile for most landlords.
ACH rent payments rank among the most secure methods for making money transfers. Unlike cash or checks that can be lost or stolen, ACH operates under federal regulations and follows strict security standards set by the National Automated Clearing House Association (NACHA).
Fewer than 0.03% of ACH transactions involve fraud thanks to their encryption, bank-level authentication, and fraud monitoring features. Unlike PayPal or Venmo, which report fraud rates of 0.17% and 0.40%, ACH transactions operate under stricter regulation and thus face far fewer risks.
Although fraud is rare with ACH, landlords should still verify tenant identities and stick to trusted rent collection platforms. Simple errors, such as mistyped account numbers, likely won’t lead to fraud but can still disrupt payment timing and cause unnecessary delays.
Like any rent collection method, ACH has its advantages and tradeoffs, which include:
Consistent payments: ACH makes rent collection more predictable by automating monthly withdrawals, which helps to reduce late payments and improve cash flow.
Lower fees: Compared to credit/debit cards or big-box payment apps, ACH transactions typically cost less, helping both landlords and tenants save money.
Better records: Each transaction leaves an unambiguous digital paper trail, making it easier to track payments, reconcile accounts, and prepare accurate financial reports.
Time-saving: Automated transfers eliminate tedious, hands-on tasks such as searching for cash payments, traveling to the bank to deposit rent checks, or sending rent requests through peer-to-peer payment apps.
Bank-level security: ACH is backed by strong encryption and regulation, offering a safer alternative to mailed checks, cash handoffs, or popular peer-to-peer payment services.
Compatible with most property management software: ACH easily syncs with landlord software, like TurboTenant, to collect rent payments, automate transfers, and simplify accounting and bookkeeping.
Slower processing times: ACH payments can take 1 to 3 business days to clear, while other alternatives may offer quicker access to funds.
Bank account required: Tenants must have an active bank account and provide their account and routing numbers, which may raise concerns regarding privacy and security. However, when input into a digital solution, landlords won’t have access to these account details.
Accepting rent with ACH payments is easier than many landlords expect. With the right software, the setup should be straightforward and allow property owners to collect rent reliably each month (for free). Owners should understand that tenants may incur a fee to make the payment.
Free software like TurboTenant offers free ACH rent collection, automated rent reminders, late fee assessment, rent reporting, and digital accounting. Not to mention, landlords can also use it to advertise their rental properties, screen applicants, communicate with renters, and more.
Once you’ve created your account, connect your bank account to the online landlord dashboard using a secure and straightforward verification process. Thanks to encrypted payment platforms like Plaid and Yodlee, TurboTenant enables direct rent deposits while protecting sensitive information.
Within the portal, invite your tenant to submit their bank information and authorize recurring rent payment withdrawals. The process should take just a few minutes and will keep account and routing numbers secure from start to finish.
Once the tenant has authorized rent withdrawals, confirm the rent amount, due dates, and any late fee policies with them. Now that you’ve automated rent collection, ACH payments will recur on time with minimal future involvement on your end.
With a free TurboTenant account, landlords can accept ACH rent payments for free, though tenants will incur a $2 processing fee (which is waived for Pro and Unlimited plans).
Each rent collection method has its pros and cons, but ACH stands above the rest for its convenience, reliability, and security. Here’s how it compares to other common ways landlords collect rent:
Cash offers landlords instant access to funds, but it’s highly insecure, lacks any tracking, and can’t be synced with accounting software. It also requires in-person drop-offs, which take time and increase liability. ACH, by contrast, records every transaction and deposits rent directly into the landlord’s bank account.
Checks provide a paper trail, but they come with mail delays, bounced payments (which can take weeks to register), manual deposits, and lengthy clearing windows. ACH payments alleviate these burdens by automating transfers, expediting delivery, and minimizing manual administrative work.
Card payments offer speed and convenience, and some tenants prefer using them to earn rewards points. However, they come with a 3.49% tenant-paid processing fee on TurboTenant. ACH payments cost significantly less and allow landlords to avoid common issues, such as expired cards, declined charges, or chargebacks.
Apps like Venmo, PayPal, and Zelle may offer quick transfers but fall short for rent collection. They lack rent tracking capabilities, offer minimal customer support, and are prone to payment mix-ups. ACH payments, on the other hand, integrate directly with property management software and can sync with accounting and bookkeeping tools.
Bank bill pay isn’t a very popular option for rent, but it’s worth mentioning. Instead of processing digitally, bank bill pay sends paper checks by mail, leading to delayed delivery, tracking issues, and manual deposits. ACH is the clear winner between the two, offering faster clearing times and more accurate digital tracking.
Compared to cash, checks, credit cards, payment apps, and bank bill pay, ACH rent payments offer the best balance of speed, security, automation, and cost. They’ve stood atop the heap for good reason and will continue to do so for years to come.
With strong encryption, low fees, and streamlined automation, landlords find ACH transfers incredibly reliable and easy to manage, especially when paired with property management software.
Reliable rent collection isn’t going anywhere, and neither is the driving force behind it. ACH works quietly in the background, costs less than card payments, and delivers on time, month after month. For busy landlords, this predictable, no-fuss system is key to running a tight ship.
If you’re still chasing down cash, checking the mailbox for a rent check, or sending payment requests through Venmo, why not consider a different approach? If rent collection feels inefficient or time-consuming, it’s time for a better alternative.
TurboTenant offers free and secure ACH rent collection designed for independent landlords. With it, you can set up recurring payments, assess automatic late fees, track rent in real-time, and keep it all organized from your landlord dashboard (at no cost to you).
Not to mention, TurboTenant allows landlords to market properties, screen applicants, create state-specific lease agreements, coordinate maintenance, streamline accounting, and more.
Sign up for a free TurboTenant account now to begin collecting ACH rent payments and streamlining your entire rental operation.
On a federal level, landlords can require ACH rent payments from tenants if they clearly outline terms in the lease, and the tenant voluntarily agrees. However, under the Electronic Fund Transfer Act (EFTA), landlords cannot mandate recurring, preauthorized ACH payments as a condition of tenancy unless tenants explicitly consent in writing. Even then, tenants must be allowed to revoke that authorization at any time.
Some states have laws that require landlords to accept non-electronic payment methods (e.g., California, New York) or obtain the tenant’s written consent before requiring electronic payments ( e.g., New York, Massachusetts).
With this legislation in mind, landlords should accept multiple forms of rent payment, as the ACH requirement may not work for all tenants, especially those receiving government assistance.
ACH stands out for its reliability, automation, low fees, and ease of use. The stats don’t lie: 65% of digital rent payments happen through ACH. That kind of dominance is no coincidence, but landlords should use what works best for them.
To set up ACH with a tenant, sign up for a property management platform like TurboTenant, link your bank account, invite your tenant to authorize payments, and automate rent collection.
Yes, it’s generally safe to share a bank account number for ACH deposits, especially when using secure rental platforms. Nowadays, software enables both landlords and tenants to exchange banking details through encrypted systems, eliminating the need to share account numbers directly with each other.
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