Just as home owners have electronic mortgage payment options, renters can now choose to pay their rent electronically -- provided their landlord subscribes to one of the growing number of rent-payment services.

Renters can opt to set up an automatic monthly deduction from a personal financial account, say a checking account or credit card or, for more flexibility, renters can tap an electronic rent payment service to pay the bill.

Property managers and landlords who subscribe to automatic services that use the Federal Reserve's a Automatic Clearinghouse (FedACH) system tap into the same system used to electronically move other money transfers such as company payrolls, accounts payable/receivable systems, insurance company premium payment systems, utility company payment programs and others.

Justin Yang, vice president for ClearNow.com says the automatic monthly payment brand of electronic rent payments are not only federally protected but more convenient.

"Automatic payments require a one-time setup on the part of the resident. The resident provides the property manager with information from a credit card or a checking account. Once setup, the resident is relieved of the chore of remembering to pay rent and the hassle of writing and delivering a check," Yang says.

Yang says rather than an online sign up, residents of communities that use ClearNow.com register with the property manager or landlord.

"We have found that this works better for tenants who are less comfortable using the Internet," said Yang.

Automatic payments are also helpful for tenants who don't want the hassle of writing a check every month, travel prone tenants who may be away on rent day, and tenants -- such as college students or older residents -- who have their rents paid by a third party.

Tenants should be aware that if a credit card is used to pay the rent, interest charges apply to any unpaid credit card balances. As well, there must be sufficient credit or checking account funds available in the account each month at the time the payment is due to be withdrawn.

If the funds aren't available to pay the rent, the tenant could face late charges as well as failed payment penalties from ClearNow.com and other companies that provide the service. Checking accounts set up with over-draft protection could trigger yet another charge levied by the checking account bank for moving sufficient funds to cover the payment whenever funds aren't available in the rent payment account.

Renters don't need to use rent-specific services like ClearNow.com and Tranzero.com to set up automatic monthly payments, but can use general bill payment services (PayPal, Yahoo Bill Pay, BillServ, etc.) to complete the same task.

Also, rather than a preset automatic monthly rental payment service, some rent-specific and general online bill payment services provide a more flexible electronic payment alternative by leaving it up to the tenant when to pay the rent each month.

Most general bill payment services and some rent-specific companies, including RentPayment.com and FlashRent.com offer both options, automatic monthly rental payments and month-by-month electronic payments.

The flexibility, however, could come with an extra charge. Landlords typically foot the bill for automatic monthly payment services. The tenant may have to pay a service fee each time he or she uses the more flexible services.

For more articles by Broderick Perkins, please press here.

Published: January 3, 2002

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.