Why Taking Cash From Your Tenant is a Bad Idea


Many landlords may jump at the opportunity to be paid in cash by their tenants. When paid in cash, landlords do not need to worry about the hassles associated with managing rental checks from tenants and they have the money on hand to pay property management related costs without any delay.

Landlords might be even more tempted to accept potential tenants if the tenant says that they would pay several months up front in cash. However, landlords need to be wary of tenants that have so much cash in hand and do not want to use other forms of payment that are easy to track. While some tenants may simply like to pay cash over other forms of payment, there can be several nefarious reasons why tenants want to pay in cash only.


  • The tenant's job or business could be unstable, under the table or unreliable. People that want to pay rent in cash usually are getting paid in cash. Cash-based work can be unreliable which means these tenants may be more likely to be short on rent in the future.

  • They make their income illegally (e.g. drug dealers).

  • They may be hiding from law enforcement.

  • They are trying to avoid paying taxes by not leaving a financial paper trail.

Some tenants simply may not have a bank account which is why they want to pay rent in cash. While there is nothing illegal about not having a bank account, individuals without one may be financially unstable or living paycheck to paycheck. Furthermore, they may lack the stable saving that could help them pay rent if they have unforeseen expenses arise.

No matter the form of payment you accept, as a landlord you need to have a property management system that includes accounting for your rental properties. RIS property management software systems key features include general accounting and payments that enable you to manage the financial aspects of your rental property business effectively. In addition, it includes tenant payment portals so that your tenants can easily pay rent directly to you without you or them having to leave their house.

This post is provided by RISSOFT Residential and Commercial Property Management Software, specializing in innovative and cutting-edge property management software for all 50 states. Request a demo or contact us today to receive more information.

Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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