While not the norm, there are some apartment complexes that are getting a “charge” out of offering their tenants the option of paying their rent by credit card. One example was a building in New York City that offered those who sign leases by a certain date, will receive 50,000 bonus rewards points if they pay with American Express. That’s about two round-trip domestic flights on many credit cards. So as a landlord or management company, should you or shouldn’t you? A developer of upscale residential buildings, pioneered the arrangement back in 2003 with AmEx, according to the New York Times. Other rental outfits followed.The advantages for landlords and tenants are obvious: Landlords are guaranteed payment on the first of the month. Tenants can save up gift or travel points on their credit card while no longer having to remember to write a check.
I read about one renter who said that it’s a no-brainer. He used American Express Platinum travel miles accrued from his rental arrangement to upgrade two seats to first class for his honeymoon flight to Hawaii. He pays about $6,000 a month in rent, so he estimated he’ll be collecting another 70,000 points or so for another trip somewhere. That’s a lot of travel points!
For tenants that opt for this arrangement, the delayed arrival of your statement can also act as a temporary loan, helping you bridge a temporary shortfall of cash in an emergency, but just keep in mind that you have to pay at some point. If you’re a financially responsible person and you know there’s no risk of your not making the full payment then this would be ok. But, not everyone is as diligent financially. Unpaid interest can build. Credit history can crumble. Another downside is that rewards can disappear. Airlines can merge, banks can go under, so there’s no guarantee you’ll reap the reward points. For those wishing to pay automatically, you can schedule those payments through your bank electronically.
In my opinion, it is only viable for some rental properties whose rent amounts are on the higher end and can offer tenants a special incentive. I see this as being more popular in the larger cities. The risk is more on the tenant though….the landlord will get paid on the first of the month either way!
