If I attempt to move my existing tenant base, mostly C, some B, and a few A class tenants to Autopay over the next year...

Should I use a carrot, or stick, or...or a carrot+a stick... or no option...just a due date?

.ie carrot: We'll be moving to AUTOPAY for all tenants within the next year. Sign up for AUTOPAY in the next 30 days, and receive a free $40 gift card to [Local Restaurant]

.ie stick: Beginning Jan 1st, 2026, all tenants not on AUTOPAY will be charged a $9/mo. convenience charge.

.ie carrot+stick We'll be moving to AUTOPAY for all tenants within the next year. Sign up for AUTOPAY in the next 30 days, and receive a free $40 gift card to [Local Restaurant]! Beginning Jan 1st, 2026, all tenants not on AUTOPAY will be charged a $5/mo. convenience charge.

.ie no option: We'll be moving to AUTOPAY for all tenants within the next year.

Related question: I'm confident I have some tenants who do NOT have a checking account... nor do they use credit cards. (They currently bring wads of cash to my office). What am I gonna do with them?

Leaning toward if you GOTTA pay cash...you're gonna pay me a convenience fee.

Really want to run it all through INNAGO.

Do you like Innago? I continue to just use Excel, but only have a handful of properties.

If tenants don't have a credit card or checking account, I doubt they'll get one just to pay rent, so they'll probably pay the fee.

Auto draft via Clearnow is a requirement in all my leases.

NED,

No need to be shy. No need for prizes.

Adjust your thinking to what your residents WANT.

People LOVE autodraft!! They will be happy you finally moved into the 20th century! Let alone the 21st!

We have been requiring autodraft since the 90's.

It used to require some explanation but now they already pay their bills via autodraft.

Often during lease signing people ask "Can you just take the rent each month like my electric bill?"

Make sure it is AUTODRAFT, not a service where they have to remember to pay, remember their password, get a phone verification, and CHOOSE to pay YOU instead of others.

My lease is clear: Non-Autodraft Transaction Fee $20.

"For your convenience and safety, starting Jan 1 Management is requiring rent be paid by autodraft from your checking or Chime account. No more paying for money orders or gas and hassle running to the office before 5pm.

Non-Autodraft Fee is $20 fee each time.

Simply write your info on the sheet, sign it, and return it immediately in the enclosed stamped envelope.

NED: You need to know what would work best with your tenant pool.

From your description, I would use the carrot and the stick with a $25 grocery gift card, and a $5 fee if they don't sign up.

You need to determine your preference, then make it mandatory.

My hope was to integrate all into one platform. (.ie Innago).

But I get what you are saying, Brad, about "pull, not push" their auto draft...and them not having to remember password, login, etc.

Innago doesn't pull the funds. That would be nice but they do not do it. Unless they just started that way.

I have had one tenant bounce an ACH. She swapped jobs and the funds from her new job didn't get put in the correct account. She rectified it the next day but Innago put her on their 3 day deposit and said it would be that way for six months, then I could request the change.

That was a one off problem. She moved before the six months were up because she found a place with more bedrooms.

I would like to get more information on the auto draft procedures. One tenant with no email still gets SSI dumped into her account monthly. Auto draft would work great for her.

When I started telling some of the tenants about Innago they were happy. Paying the $2 per transaction fee is cheaper and easier than driving to the bank.

I would not dangle a carrot. You get the money later than you would when they deposit it in person. Call it a convenience and see where that goes.

This one is easy: "Dear Tenant, starting Jan 1st, all rent payments will be done thru checking account auto-draft. You can sign up online at our website, or send a VOIDED check and we'll set it up on your behalf. Be sure to talk to your bank and verify that they don't have any security blocks on your account that will prevent these transactions from processing. Thanks, the Management."

Then if someone doesn't cooperate, you charge them the late fee same as always.

Buildium doesn't do auto-draft - well, they do, but the tenant sets it up and controls it as they would any online bill. Some use it, some just make their payments online monthly through the portal.

But EVERYONE pays through Buildium, we don't offer a choice.

When we started it, we sent an email to all: "GOOD NEWS! We are moving to a new service blah blah blah..."

Everyone was paying online anyway using various cash apps as I stopped taking cash or checks directly decades ago - people went to my bank and made deposits to my rent account. When my bank stopped allowing non-owners to deposit money, we started looking around for a better way and went with the cash apps. Ended up with Cash App, Venmo, Google Pay and Zelle.

I disagree with those who say to roll out a blanket mandatory compliance effective a certain date for two reasons. First, if you have tenants in the middle of a lease term, your lease likely gives instructions for paying the rent - likely mail or deliver to your office - and you would be attempting to unilaterally change the terms of your lease. Second, if you have tenants who don't have a checking account, they will be unable to comply and you will have some unexpected vacancies to deal with - and some of those would likely be evictions.

I would give existing tenants an option to convert now for a carrot - a one-time discount or something along those lines. For those who convert, sign a new lease or addendum making it mandatory. For those who don't convert, let them continue to pay as they are today and do as Jason suggested - at renewal give them two rental rates - one with autodraft and one without.

Make ACH payments a requirement for all new tenants going forward. If you provide a list of qualifications that you provide, add to it that they must have a bank account and pay their rent via electronic bank draft.

I converted to ACH payments over 10 years ago, and this is the approach I took.

Ken, some banks don't allow non-account-owners to deposit funds. Wells Fargo started this several years ago now and it really changed the way we worked.

That's when we ended up moving to on-line collection via the cash apps but managing four of them got dicey.

Then Google Pay started pushing back on non-business accounts, and Cash App and Venmo want to 1099 all funds that are not marked as between friends and family, even non-taxable funds like Security Deposits.

If you sign up as a legit biz account then there are hefty fees. I'm sure Zelle is next with those.

Ken, they claimed it is to prevent money laundering. Yes, that is what they told me. Money laundering.

In NY you cannot penalize a tenant that does not use your preferred payment method, check your state rules.

Some thougths...

MY atty says it's OK to make changes mid-lease as long as both parties agree.

My paragraph allowing permission to autodraft is built into the lease so if they signed the lease they signed the permission. They do sign that special paragraph.

We set up 100 residents for autodraft in Buildium. Did not need them to do anything. We did it from our desk. It;s in a different area of the app called e-Pay.

We set up a subaccount for each res so they cannot touch the autodraft or make their own payments. Only autodraft.

Buildium is still giving us fits. Something goes wrong EVERY DAY. It drafted 2 rents on Dec 2 even tho Dec 4 is the draft date (SSI recipients)

Another thought for those LLs shy about autodraft...

Ask your residents and anyone under 50 how they pay their utility bills.

Daughter20,000 has EVERY vendor /utility /HOA fee /lawn guy daycare /doggie daycare /martial arts class etc on autodraft. The only payments she makes are for groceries, gasoline, and odd school fees.

The autodraft mishaps are what is scaring me.

I have a couple SSI people left. If I pulled the money out a couple days too soon it could cause real problems. It would cause problems for most of my tenants actually.

I don’t like it that we now live in a cashless society. But since everyone is paid via ACH, it only makes sense to require rent payment via the same method.

My first landlord was like that. He said that since I could only take $1500 (?) off state taxes that was what I needed to claim.

He pocketed the rest and called it a discount on the rent price.

I didn't even consider it when I got into the biz. Too easy for it to come back and bite me, in my opinion.