Getting a credit card merchant account can be a hassle and there are costs involved, but if you have a significant number of rental units, you may want to consider it.

You could set your tenants up on an automatic charge for their rent payments—although you would have to set your rents at a rate that would cover the credit card fee. What’s more useful is to use a credit card to assure on-time payments by doing this:

When a new tenant signs a lease, get a valid credit card number from him (or her). As part of your lease terms, stipulate that the rent is due on the first and considered late on the third. If the rent is not paid by the third, you will assess a late fee and charge the amount of the rent plus the late fee to the tenant’s credit card.

This won’t work for every landlord, particular those with a small number of units. But it’s something to consider if late rent payments are an issue for you.

Jackie