Getting Started with Online Rent Payments

Written on December 1, 2014 by , updated on June 9, 2015

online rent payments In many cases, rent is the only check that a tenant writes every month.

These days almost every bill is payable online, and yet 78 percent of landlords still require their tenants to pay rent via check.

Rent is often the only check that a tenant writes every month.

Online Rent Payments

In recent years, online rent payments have emerged as the ideal solution for landlords and property managers to streamline their efforts, saving them both time and money.

How Does it Work?

The basic premise is that rent money goes directly from a tenant’s bank account to yours each month. It’s quick to set up and designed to be automatic, so that you can spend more time doing the things you love, not tracking down the rent.

Almost all large apartment complexes offer online rent payment portals, but the majority of independent landlords have yet to make the switch. For many years, the costs were simply too high.

For many years, the costs were simply too high.

Now, small-asset landlords can manage all aspects of their rental units, including online rent payments, for free.

Related: How to Streamline the Leasing Process in 3 Easy Steps

The Benefits

  • Automatic, recurring rent collection
  • Convenient for both landlords and tenants
  • No more stamps, envelopes, checks, or trips to the bank
  • Money is often transferred faster than traditional checks
  • Attract higher-quality tenants with stable bank accounts
  • Built-in accounting and reporting

There are many available online rent payment solutions, but they are not all created equal. For example, only a few offer bank-level security, identity verification, and integration with other essential aspects of property management.

There are many available online rent payment solutions, but they are not all created equal.

Understanding Your Options

There are really only two types of online rent collection tools:

  1. Those that offer payment processing as part of a total property management system, and
  2. Those that don’t.

As any successful property manager knows, it’s best to have a system where all (or a majority) of your tools integrate with each other. If you have three separate tools for collecting rent, accepting applications, and ordering credit reports, you’re going to frustrate your applicants before they even sign a lease.

Having disconnected tools is a sure-fire way to shoot yourself in the foot.

There are some systems that only collect rent online, but without integration with other aspects of the landlord lifecycle, they provide only minimal value.

Let’s take a look at some actual products.

Property Management Software

All-in-one systems help managers accept applications, screen tenants, collect deposits and set up recurring rent payments while making it easy for tenants to manage and track balances among multiple roommates.

These all-in-one solutions simplify the landlord-tenant relationship while saving everyone time and money. They are the gold standard in online rent collection.

 Online Rent PaymentsOnline ApplicationsCredit ReportsCost
AppfolioMin. $200/mo
BuildiumMin. $45/mo
Rentec DirectMin. $15/mo

Basic Payment Processors

Whether paying by ACH or debit/credit cards, these online systems favor tenants and blindly transfer money with no special consideration for the lease terms, prorated rent, or move-in costs.

They often provide only minimal accounting and reporting tools and charge transaction fees that add up quickly.

 Min. Monthly CostPer Transaction
Applications & Credit ReportsCost for $6,000/rent, 4 Tenants
PayPal$0Bus / 2.9%+$0.30
Personal / Free
WilliamPaid$0up to 2.95%No$0 - $177/mo

Related: Using PayPal to Collect Rent? Try Cozy Instead.

Picking a Winner

While both options have their differentiators, opting for an all-in-one solution is the clear winner when considering the added benefits and competitive price tag.

Related: Top 5 Rental Management Tech Tools You Can’t Live Without

Beware of Transaction Fees

Any service that charges a fee based on a percentage of the transaction, will almost always be more expensive than those that charge a flat monthly fee. After all, the average rent payment is around $1,200, meaning that a 2.95% transaction fee would be $35!

I don’t consider “Online Bill Pay” through a bank to be a valid method of online rent collection because though it is completely online for the tenant, the bank still mails a physical check to the landlord. Only part of the process is handled online.

Direct bank transfers are also difficult to set up and require that the manager distribute account numbers to the tenant, which is risky and, frankly, foolish.

Making the Switch


The ideal time to switch to online rent collection is when you have new tenants about to start a new lease.

I suggest allowing the former tenants to finish out their tenancy under the previous payment method, and then require the new tenants to pay online.

In fact, I suggest requiring automatic, online rent payment as part of the lease terms, and only accepting applicants who are willing to comply with that provision. If you allow more than one payment method, you will just create more work for yourself, and risk introducing inaccuracies in your records.

Related: 7 Tips for Collecting Rent and Getting Paid On Time

You are allowed to mandate a specific method of payment without it being considered discrimination, as long as you maintain the same requirement for all applicants. Just because an applicant refuses to open a bank account doesn’t mean they are a protected class.

Further, it’s perfectly acceptable to refuse cash payments as long as you document it in the lease. In fact, any experienced property manager will tell you that cash rent payments are an invitation to disputes, fraud, and lawsuits. Cash is more trouble than it’s worth.

Ditch the Rent Checks

The days of hearing that “the check is in the mail” are over. Today, you can streamline all aspects of your rental business – making rent collection secure, automatic, traceable, and convenient – by managing the process online.

Of the many solutions available, an online property management system, rather than just a payment processor, offers the greatest utility.

Among these, Cozy is the easiest to use, and designed specifically for the independent landlord. Best of all, it’s Free!

You’ll love all the time you will save, and your tenants will thank you (seriously)!

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51 CommentsLeave a Comment

  • Ryan

    Would Cozy’s solution work with commercial space/tenants?

    • Lucas Hall

      Hi Ryan,

      Though Cozy is intentionally designed to best work with independent landlords in the residential space, it would absolutely work for commercial rental units. The concepts are the same: applications, screening, deposits, and rent collection.

      Give it try – it’s free. Give it a test run on one of your commercial rentals, and migrate the others over when you are confident that it will work for your situation.

    • Melissa

      Cozy might be convenient for the landlord but it is a pain for the tenant! Tenants can only make payments between the 1st and the 5th of each month. You are not allowed to pay early. This is a problem for tenants that like to pay a month in advance etc. So, I would look at POPMONEY.COM…same concept, costs the sender $0.95 and the received is free. Pay any time and it is deposited directly into your account as Cozy would. I’d rather pay the 95 cents to be able to pay early than be restricted to pay during those days of the month.

      • Lucas Hall

        Hi Melissa,

        No worries! In Sept/Oct, Cozy will be changing to allow tenants to pay whenever they want. So for the 2.5% of tenants that do want to pay early, it will work great for them – and it will still be free.

        Popmoney won’t work for so many landlords and tenants because it limits how much money you can send/receive.

  • Michelle

    Some of the owners I work with are skeptical about the service being free – is there a catch? Why is it free?

    • Lucas Hall

      Hi Michelle,

      Thanks for your comment. That’s usually the reaction :)

      Yes, Cozy is completely free for landlords. If a landlord requests a credit report, the tenant pays $19.95, directly through Cozy (thus eliminating the need for application fees). Experian provides the credit data, and takes about half of the fee. Cozy earns revenue on the other half. Makes sense?

      So, it’s true. Cozy is free for landlords. The credit reports are even optional, so it can be free for tenants too.

      Here’s the press release:
      Here’s the pricing guide:

  • Janet Basch

    How does Cozy handle late fees?

    • Lucas Hall

      Hi Janet,

      It doesn’t currently, but that’s in the works – as with one-time payment for things like parking fees, or storage fees. The beauty of collecting rent automatically through Cozy is that the only way for rent to fail is if the tenant doesn’t have sufficient funds in his/her account.

      Since I started using Cozy, I haven’t had a single late rent payment. I process over a dozen transactions a month via Cozy. I know a lot of other landlords have had the same amazing results.

      For the time being, if the tenant fails to pay rent on time via insufficient funds. You’ll just have to collect the late fee separately, or withhold it from their deposit at the end of the lease.

  • Ryan McCabe

    can i use cozy for existing tenants, who already passed the background and screening process?

    • Lucas Hall

      Hi Ryan,

      It’s good to hear from you. You can totally add existing tenants or applicants that you’ve already screened! Lots of landlords use Cozy just for rent collection. Just add their email address and Cozy will send them an invite and coordinate their setup.

      This page might help: And click on “collect rent payments”

  • sharon r bower

    WOW! A Dave Ramsey fan! Me too!

  • brad

    Will Cozy report to credit agencies in the future automatically on the behalf of tenants? I would pay a small monthly fee for that $1-$5

    • Lucas Hall

      Hi Brad,

      Generally speaking, rental payment history isn’t tracked by the credit bureaus, however Experian starting doing that with a product called, RentBureau.

      There has been some discussion about adding this feature, but there are some legal concerns with reporting data without a judgement – who’s to say the charges (rent increases, late fess, etc) assigned by the landlord are legit?

      It’s not a feature that Cozy is planning to implement this year, but we haven’t ruled it out for future years.

  • Oksana

    I used Cozy for my 1st rent collection. It s been 5 days since the payment was supposed to go through and I still haven’t received it. Is there a phone number for the customer support?

  • E Murph

    I tried cozy and their payment processing takes much longer than I had expected. My tenant had a difficult time remembering to mail the rent so I suggested this service. Now I’m waiting even longer because of the added processing time. As a comparison: Amazon can process my order, debit my account, ship and deliver an item in 2 days but it takes cozy up to 5 to process a payment. I won’t be using this for future tenants.

    • Lucas Hall

      Hi E

      That’s too bad that you didn’t like it.

      Please know that you are comparing apples to oranges. Amazon handles small payments via credit/cards. Cozy, like most rent collection tools on the market, use ACH (automated clearing house) to electronically transfer the large sums of money from bank to bank. The ACH banking system is regulated by the Federal Reserve and usually takes 4-6 business days because of the government touch points, as described here:

      Plus, there are no transaction fees with Cozy – so it’s often quicker than a physical check, but not as quick as a credit card – but it is free.

      The good news is that Cozy will soon allow tenants to pay by credit card. Just like Amazon pays Visa and Mastercard a small fee to let you pay with a card and to get their money in 1-2 days, tenants will be able to pay a small fee to pay with a credit card, and the landlord will get the money in a day or two.

      Exciting stuff! Cheers!

  • AL

    Hi Lucas-

    WilliamPaid is no longer in business. So this post will have to be updated.

    I also thinking adding “Processing Time” is crucial as well. Cozy is taking 10 days to process payments, do you know why? I have written several times to customer service at Cozy regarding this. I know it’s free but 10 days is unheard of for processing and kind of long time.

    • Lucas Hall

      Hi Al,

      Thanks for the note. To your point, sparkrent is no longer in business either.

      I actually a free guide on rent collection which has a bigger (more up to date) comparison of products. You can download it here:

      For the month of August, Cozy processing times were 10 days because there were two weekends in the mix (4 non-banking days). So it took about 6 business days, which is on the top end of the estimate (4-6 days). As of last week, we’ve negotiated a shorter processing time with our payment processor, so you should see a reduction by at least 1 business day next month.

      Plus in the next few months, we’re launching the ability to pay with credit cards, which will get deposited within 1-2 days if the tenant chooses to pay that way.


    • Lucas Hall

      Hi Al

      I just spoke with Cozy Support and they said your rent was deposited on Aug 6/7th. Why did you say it’s taking 10 days?

      • AL

        Hi Lucas-

        Thanks for following up on it. Following are the deposits since April. The last one in August came on 08/10 (Cozy #00046205). I can send more information if needed.


        • Lucas Hall

          Hi Al

          You’re welcome. Glad to help a Landlordology reader.

          No need to send more info. Customer support said they followed up with you via email. I guess the money didn’t post to your bank account until Monday the 10th because of the weekend. It’s always tough when there are multiple weekends or holidays within the first week of the month. As a fellow landlord who counts on rent, I wish banks would process money every day of the week instead of just Mon-Fri.

          If you need any more help with your payments, please continue to correspond with Cozy support at I work with Team Cozy, but they have all the answers. I hope I was helpful at least a little. Cheers.

  • T

    Hi Lucas, maybe you can help me figure this out.

    If I’m correct, Cozy says that a payment will take up to 5 days to clear. How, then, do I know if my tenant is paying on time?
    —-for example, what if they have insufficient funds in their account on the first of the month… will it take 5 days for me to find this out? I follow your one-time+daily late fees, so that would mean by the time I find out the payment could not clear, my tenant is already five days late and that makes for a hefty fee—

    I am also trying to figure this out now because I have added a one-time payment due today for our new tenant’s security deposit, however she will not have sufficient funds until noon. Is Cozy going to overdraw her account?

    Thanks for the help!

    • Lucas Hall

      Hi T,

      You’ll know when a tenant makes a payment because it will post to your lease ledger in Cozy on the day they make the payment. That’s the day you should credit them with paying – even though it takes the money a few days to show up in your account.

      The same principle applies when you accept a physical check. You credit the tenant’s account the moment that they hand you a check even though it take a few days for the check to clear.

      If the payment fails for insufficient funds, the ledger will automatically reflect that, and you will be notified. In that case, you should certainly add a late fee charge (or charges) that the tenant will have to pay. But the date that a tenant is credited with a payment is always the date that they initiate the payment. This is how all rent collection systems work, not just Cozy.

      Also, I’m not sure what you mean adding a one-time payment. As a landlord, you can’t withdraw money at will from the tenant’s account. They are still in control of the money, but they can setup automatic payments against your charges. If your tenant has initiated a payment for today, then we will try to start it today, but if it fails, we will continue to try to start the transfer every 4 hours for the rest of the day. So, in your case, it should all work out.

      Cozy will never overdraw. There is no way to draw money that isn’t there in the first place – unless the tenant’s bank loans her the money and then forces her account to go negative. Some banks do this on their own, and they call it “overdraft protection”.

      I hope that helps. If you have more questions about the product, you should try emailing, or check out our FAQs:

  • T

    Thank you for your thorough reply, Lucas! It has helped me to understand everything a little better.

    The current issue I was concerned about is what Cozy called a “move-in cost,” I think (it was basically the deposit that I put into the system). Which Cozy prompted me to put in when I was setting up the recurring rent payments. I’ve also been in touch with Cozy.

    But now I have another question for you. As I understand it, it’s good practice to collect the security deposit and first month’s rent prior to the tenant moving in, correct? That way you know they are legit. So, if you use Cozy from the start, does that mean you collect these initial payments at least five days before move-in? New to this and want to nail down the timeframe.

    • Lucas Hall

      Hi T

      Yes, generally speaking in property management, a Security deposit is one type of move-in cost. Others might include pet deposits, elevator reservation charges, or just a flat move-in fee.

      But just because you ask for money, doesn’t mean you instantly get it. The tenant has to initiate some sort of approval – usually by them signing up and adding their bank information for the withdraw.

      Most of the time, I personally use Cozy to collect the initial security deposit, first months rent, and any associated move-in fees. This happens weeks before the lease actually starts, simply because I plan ahead. I’m looking of new tenants 60-45 days in advance of any vacancy, and when I find them, I sign a lease, and get them setup on Cozy. They login, setup their account, and pay the initial fees. Then we wait until their lease starts, and they move in.

      I NEVER allow a tenant to move-in or take possession of the keys until I have a signed lease, a deposit and 1st months rent in full. It’s a lease requirement.

      If you find a tenant just a few days before the lease is supposed to start, then Cozy might not work for those initial fees and first months rent, because it takes a few days to process the money. You might be better off collecting a certified check and then getting them setup in Cozy to pay rent online starting in Month 2.

  • JOHN

    From a user…

    “Have been using it for about 6 months, it’s not the most robust system and not very forward thinking by any means, but it works. As I recall there are some really strange things about it, like allowing the tenant to choose what day to pay the rent on when setting up their account. Obviously if you’re the landlord and your lease says it’s due on the 1st and you set up the tenant’s account for email invite to the system the tenant shouldn’t have the ability to set up payment for another day. A smart tenant obviously knows they are supposed to pay on the day the invite says and the lease says so why Cozy gives them this option I have no idea. ”

    Thoughts on that please.

    • Lucas Hall

      Hi John

      I saw these comments on BP too.

      In regards to Mike F.’s comment, of course the tenant gets to choose when to pay. That’s how the real world works. The landlord sets the due date, and the tenant can choose to pay early, on that specific due date, or after, and incur a late fee (if applicable). If the tenant were paying with checks, cash, or bill pay, the tenant gets to choose what day to send payment. Why would it work any other way for online payments?

      The bottom line is that tenants are adults, and need to behave like adults. If they can’t pay rent on time, they’ll rack up late fees and then have to deal with that.

      With that said, the vast majority of the tenants in Cozy pay on the date recommended by the landlord (the due date).

      I hope that helps.

  • JOHN

    Another comment……

    “We have a few issues also when you are extending a lease or giving an existing tenant a new lease, Cozy makes you start all over again from scratch as if the tenant hasn’t been using the system already. ”

    What say you? Thanks

    • Lucas Hall

      Hi again,

      I think Mike just needs to review the support FAQs and ask for help.

      Extending the lease is as easy as changing a date. If the tenants have recurring payments setup, they will have to extend their payments too, but Cozy walks them through this process, via email and in the system. I’m not sure what he’s referring to when he says he has to “start all over”.

      If he’s starting a new lease, but with existing tenants, he can simply just add their email address to the new lease, and the system will pair them with the lease. They will need to setup any desired recurring payments for the new lease, but that’s to be expected as with any new lease (in the physical or digital world)

  • JOHN

    SPEED…. it appears from those who use this system, they have to tolerate the lack of speed in send over the collected rent to the landlord.

    Is there any thought of making this a few days faster? Say with in 48 hours of payment by the tenant? I think your system will be MORE ATTRACTIVE if that can be rectified and implemented.

  • SUE

    I saw posted in 2015 that credit card payments would soon be accepted. I have 3 questions: 1. Is it available yet? 2. If not, can you give an expected time frame? 3. Will that also include accepting the ‘government charge visa cards’?
    Thank you so much

  • Juan

    Any chance the late fee rules have been added yet? If rent is not collected by a certain date, then a late fee should automatically be added. If the whole amount including late fee is not collected, then nothing should be collected.

  • melissa

    Can I have a link or integrate Cozy into my website? I’d like to have all rental info on my site.

  • Marie

    What if the landlord has to sue their tenant for damages from breaking the lease. If the tenant never paid by personal check, wouldn’t it make it much more difficult to collect any judgement awarded to the landlord?

  • BL Miller

    One point to be aware of, as with anything suggested online, is to check your state’s specific laws. For example, New York State does not allow online payments to be the only option for tenants to pay rent.

    A landlord shall not require a lessee or tenant to use an electronic billing and/or payment system as the only method for the payment of rent. (N.Y. RPL §§ 235-g)

  • Ruth

    i just signed up with cozy to collect rent from my tenant. i am a senior (i.e. older generation) landlord and not in tune with technology. i gave my bank info to sign up with cozy. but now i am having 2nd thoughts about signing up because i gave my bank info without checking thoroughly about cozy. is cozy legit company & is cozy bonded/insured/licensed? or am i being too paranoid? i hear so many horror stories about seniors being scammed. thank you for reading this. hope to hear from you soon.

  • Jeff

    Can I setup Cozy to deposit to my savings account? I only saw the options for Debt card or checking.


  • Sue

    Simple question- Total rent of house is $1800, and three tenants split it equally, on individual leases. So I set up address, then I listed the three tenants. Do I then say rent is $600 or $1800? Can’t find answer anywhere.

  • Scott

    I have had multiple tenants skip the application part and only submit the credit/criminal reports. That means I cannot easily verify employment status and previous landlord references. Why is that even possible? I like Cozy but this is the 3rd tenant that I had to send a separate application, the prospective tenant should not have to be managed, by me, to tell them to go back in and send/allow the application. Most people have no idea what they did “wrong”, and it’s taxing for me to play tech support. It’s easier to email a pdf and do it manually. Thoughts?

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