Always collect the security deposit and any pre-paid rent before you allow a tenant to move into a property.
If you still collect physical rent checks, be cautious of scammers. Just because you have a check in your hand, doesn’t mean it’s any good.
Scammers Use Checks for Fraud
Sometimes habitual “squatter” tenants will put a stop payment on the check before they even give it to you.
Then when their check bounces, and they are already moved-in, you have to go through the lengthy process to get them evicted. Meanwhile, they are living for free in your property for months!
I Prefer Online Rent Collection
This is exactly why I refuse checks altogether and use an Cozy method to accept deposits and pre-paid rent.
If you’re not ready to switch over to online rent payments, you’ll be forced to drive to their bank, and literally “cash the check”. Their bank’s name will usually be listed on the check somewhere. Once you have the cash in your hand, their bank is unable rescind the money. If there are not enough funds to cash the check, you’ll know instantly.
However, driving to a their bank is impossible if the tenant is using a regional bank that does not have a branch near you. Most scammers know to use small unknown banks that most have never heard of, which makes it hard for you to investigate their legitimacy before it’s too late.
Just save yourself the trouble and make the switch to collecting online payments through Cozy before you handover the keys.