Sending money in 2019 is as easy as having a bank account and an app on your phone. Apps like Venmo, Cash, PayPal, and Facebook Messenger allow you to send money to friends or family in minutes.
You might wonder why you’d use anything else, even when it comes to paying rent. But these services aren’t designed for paying and collecting rent. Here’s why you’re better off using Cozy.
Venmo and PayPal aren’t great for rent
These services are built for small everyday transactions, like paying a friend back for dinner or loaning your brother money to fill his gas tank. What they aren’t built for are business transactions, including paying for rent.
Many of these businesses restrict business transactions. Venmo, Facebook, and Cash app specifically prohibit payments for goods or services unless you’re a verified merchant with them. If they review those transactions and determine them to violate their rules, their terms of service allows them to cancel and/or refund those payments back to the sender. (Note: check Venmo’s terms for the latest information.)
PayPal requires a business profile set up, which could end up passing fees onto the landlord if the tenant pays using a card rather than a Paypal account.
It may also seem nice to have a pool of money sitting in an account, readily available to send to someone else. However, when money is held on an account in Cash, for example, instead of your own bank account, the company collects interest on your money while they hold it. If you receive the money directly, you could collect the interest yourself. There’s one other major limitation with Venmo and the like: transfer limits. Most peer-to-peer payment apps restrict how much money you can send or cash out on a daily, weekly, or monthly basis. If you’re a landlord collecting rent on multiple properties, you’d need to work around this limit.
Why Cozy is the best choice for collecting rent
We built Cozy specifically for rent collection. That means no transfer limits, and as a landlord, you don’t need to set up an LLC or sign up as a business entity to start receiving payments.
Renters can set their rent to auto pay, so they don’t have to worry about it every month. As a landlord, you can always see when they have their payments scheduled, and when that money should arrive in your account. We’ll also never hold or make money from your funds.
There are other benefits to collecting rent through Cozy, too. Renters can build their credit histories just by making their monthly rent payments. This means renters with little to no credit history can establish themselves without going into debt.
Cozy also helps you stay organized. All payments renters make are organized on a ledger that you can export, so end-of-year tax preparations become much less painful.
So next time a renter asks to Venmo you their rent, ask them to use Cozy instead.