Venmo is a payment app that was designed to enable money transactions between friends and relatives. However, more and more businesses are allowing people to buy goods and services through the Venmo app. Even some landlords allow their tenants to make rental payments via Venmo, however landlords should never accept rental payments for their Real Estate transaction via Venmo. Here are the three major reasons why you should avoid accepting rental payments via Venmo.
Tenants May Short You on Rental Payments
Since any payment by a tenant through Venmo is automatically accepted by the App a tenant can short you on the rent and you as a landlord in essence have accepted that short payment. Should the tenant refuse to pay the rest of the rent and you want to evict for nonpayment the fact that you “accepted” their rent can make evicting them a difficult if not impossible. Should a tenant owe you $2000 dollars in rent and use Venmo to transfer $1.00 to your account and you are unable to evict them you may be stuck losing out on an entire month of rent with little or no recourse.
The same problem may exist for any account that allows the transfer of money unless you have an app that automatically rejects the rent payment unless it is paid in full or requires prior approval.
You Don't Get the Money Transferred Via Venmo Instantly
Many landlords think that the transfer of money from the tenants account to the theirs is instant because their Venmo record looks like this is the case. However, in reality it takes several days for the funds to actually transfer. Should your Venmo account show that the rent was paid in full and you then send a receipt for that month's rental payment the tenant can then dispute the charge and have it reversed.
Since the tenant will have a receipt showing they paid the rent for that month then you may be unable to recover the money you have been scammed out of.
Lastly Privacy Concerns
Venmo is not only a payment app, but it also acts as a social media platform. Every time you make or accept a payment, Venmo announces it on its social platform. Do you really want strangers knowing that you are receiving rental payments? NOT Good!
While it is obvious that paying rent via Venmo is convenient for tenants it can be a huge risk for landlords should they end up dealing with unethical tenants. The risk of large amounts of income even periodically is so great that as a landlord you will want to avoid such loss. As a landlord it is much wiser only to accept rental payments in person or via check which you can refuse if the payment is not made in full.
The more rental property you own or manage the more risk you will assume of suffering lost income if you accept rental payments via Venmo. While most tenants are honest, it only takes a few tenants who are not, to leave you struggling to make ends meet should you lose out on one or more rental payments. So be smart and protect yourself by not accepting any rental payments via Venmo.