Jenna Hall is Redfin’s Content Marketing Coordinator. Redfin does not provide legal, tax, or financial advice. This article is for informational purposes only and is not a substitute for professional advice from a licensed attorney, tax professional, or financial advisor.
Over the last few years, more and more companies around the world are allowing their customers to use Bitcoin to pay for their products and services. Once considered a niche asset, Bitcoin has now emerged as a very popular currency and is being treated as a viable alternative to cash and credit for many major retailers. Now that Bitcoin can be used to buy just about anything, some people are wondering how digital currency can be used to buy a home or pay rent. increase.
With Bitcoin becoming more and more intertwined with real estate transactions, you may be wondering if paying rent in Bitcoin is a good option. there is something you need to know.
how does that work?
There are currently two ways for landlords to collect Bitcoin rent. The first is using a property management platform that leverages technology to process Bitcoin payments. The second is just a tenant-to-peer transfer.
For payments made through property management software, both the tenant and landlord must have an account on the platform.The landlord can then send payment requests to the tenant and the tenant can choose the payment method. You can transfer bitcoin directly through a brokerage firm such as Coinbase or scan his QR code on the payment request and pay through your digital wallet.
It is important to note that most property management platforms do not hold digital currency. They simply convert the coins to US dollars and transfer the payment to the landlord.
Even without a platform, tenants can rent apartments with Bitcoin by transferring Bitcoin to the owner’s digital wallet. Landlords and tenants should keep in mind that peer-to-peer Bitcoin transfers leave no paper trail. Therefore, we recommend that you have documentation with proof of payment records to avoid potential problems.
5 Benefits of Paying Rent Using Bitcoin
Whether you are a landlord or a tenant, there are many benefits to using Bitcoin to pay rent. Here are the top five benefits to help you decide if this is a good option for you as follows.
Tenants are looking for properties with more flexible payments. A recent Motley Fool survey found that more than half of renters surveyed said they would pay more if they had more convenient payment options.
Bitcoin payments are fully digital and can be made on your phone, computer or tablet. Unlike traditional banks, Bitcoin payments can be made 24/7. This means that landlords do not have to wait until after business hours or holiday weekends to receive their rent payments.
Easier Payments for Borrowers Abroad
Renting abroad can be difficult, especially if the landlord and tenant use different currencies. could mean. In addition, landlords and tenants should consider foreign exchange rates and time delays for international transfers.
However, Bitcoin can be used instantly internationally with little to no fees, saving both landlords and tenants time and money.
lower transaction fees
Most online rent payment platforms charge a fee for paying rent with a credit card. This fee is typically 2.5% to 2.9% of the rent and is paid by the tenant. Even third-party platforms such as Venmo and PayPal charge a fee of around 3% for commercial transactions such as accepting rent payments.
Renters and landlords can avoid these transaction fees entirely by sending bitcoin directly. This saves each party hundreds or thousands of dollars over the years.
Even if tenants and landlords choose to send bitcoin through property management platforms that support bitcoin transactions, they may still be required to pay transaction fees. However, these fees are insignificant compared to credit card processing fees.
Add Tenant Privacy
Bitcoin payments are ideal for tenants who prioritize financial privacy. Bitcoin uses anonymous addresses that change with each transaction, so payments require personal information, trackable credit card numbers, and account numbers. There is none.
Given the pseudonymity of blockchain, bitcoin payments are ideal for those who value privacy and are wary of sharing personal information.
potential first mover advantage
Bitcoin is becoming more and more accepted in the mainstream market, with many businesses starting to accept Bitcoin as payment. However, some work is still needed before it becomes an economical norm.
Forward-thinking, tech-savvy landlords who want to stay at the forefront of upcoming trends should consider becoming an early adopter. Potential renters may find value in properties that accept Bitcoin and be more inclined to rent those properties.
Things to keep in mind when using Bitcoin for rentals
If you, as a landlord or tenant, are planning to use Bitcoin for your rental, there are some final things to consider.
cash out and hold
If you are a landlord that accepts Bitcoin, you have the option to cash out or keep. We recommend that you consider the pros and cons of each. Bitcoin is known to be volatile and the amount a tenant pays in Bitcoin can change rapidly. Landlords should consider their financial goals and consult with their financial adviser to consider which options are most effective.
Rent can fluctuate
As the value of Bitcoin fluctuates, so does the monthly rental amount. This means that the amount of Bitcoin you receive for rent can change from month to month.
store the document
Given the nature of Bitcoin making it more difficult to track, landlords and tenants should protect themselves by keeping records of rent payments made using Bitcoin as much as possible. Suppose you are planning a peer-to-peer transfer. In that case, it’s a good idea to consult a legal professional to ensure proper paperwork and rent payment agreement documentation is in place.
This is a guest post by Jenna Hall. Opinions expressed are entirely their own and do not necessarily reflect those of her BTC Inc. or Bitcoin Magazine.
5 Advantages of Using Bitcoin to Pay Your Rent – Bitcoin Magazine
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