My Review of Cozy for Landlords

I don’t like using brand names on this blog (I’m nobody’s shill, man!) but this will neither be a shill nor a hit job like I did on those jokers at Time Warner Cable. Just an even-handed review of a website you might not know about.

Before Marge & I even bought a rental property, I was looking into easy ways to collect rent. For me, the dream of owning a rental property is all about watching the monthly payments roll in. Instead of imagining all of the work that would go into running a property, instead I started investigating ways for tenants to pay rent online. Possibly, this is what all early retirement types fantasize about in their spare time. Passive income just showing up in the bank account.

There are some leaders in this online rent collection space who I won’t name, but overall, I was surprised that there wasn’t really one agreed upon website for processing tenant payments. After reading some positive reviews and seeing how they kept expanding their box of tools available to landlords, I decided to start an account with Cozy.co, a startup based in Portland, Oregon.

CozyCo_logoI initially wanted to join Cozy for the rental payment system. There’s no charge for collecting rent electronically, which is more than can be said about some of their competitors. But I also really liked the additional services they have set up before you even have tenants.

Firstly, and this is very recent, you can make a listing for your property online. Similar to other listing services, you can upload photos, write a description, put your contact information and check off the applicable amenities. That’s great. I don’t know how many people are finding listings on Cozy.co, so it’s definitely not a replacement for Craigslist or your favorite real estate listing website, but it’s nice that it’s there.

Then from the listing, prospective tenants can click through to go to an online application. You can also just straight up link to the application on Craigslist, which is where we’ve found all of our tenants. Cozy’s website is the only way I accept applications. I want to use as little paper as possible as a landlord. I am bound to just lose paper, forget to make copies of things I need, etc.

CosyProperties

When people apply through Cozy’s rental application, I get an email alert, and their application appears on the website. This was also nice because I didn’t want to have to search for an example of a rental application to use. Their application includes spaces for a references, work history, contact information, and even a little bio which some of our tenants have filled out in rather adorable ways.

CozyApplicant

Also you’ll notice, one nice detail is that Cozy will calculate what percentage of the applicants’ income will be spent on your rent. This is an important metric to vet your tenants’ by. And as soon as you visit the site to see a new application, there is a nice percentage in the corner.

CozyCredit

The number one best thing about the application process, though, is that you can require a credit and criminal background check before the application is submitted. I love this. I require both checks with any application, and applicants do it right through the Cozy website. Once someone applies and fills out the background and credit check, the application and credit check come in almost immediately. The background check sometimes takes an hour or two to come back. But I get everything and it’s all linked together with their application on the website.

What I don’t like is that Cozy kind of markets their credit and background check as free. Well, it’s free to you, because the tenant has to pay for it. It’s $34.95 to complete both. I don’t know how common it is to have your tenants pay to have these checks done. So I tell my applicants up front, if I accept you, I will refund you the $34.95. It’s definitely been worth it. I can even adjust the first month’s rent bill on the website so their bill is lower by $34.95.

CozyCriminal

Nice to see this

Basically the only thing I do outside of Cozy is verify employment. I require two weeks’ paystubs (this is too difficult for some people). Now wouldn’t that be great if an applicant could upload a photo of their paystub directly through Cozy’s mobile site? Then I’d be all set. I wouldn’t have to ask for anything. The website would be doing all the work! Uh, Cozy, is anyone listening?

Machines can do the work, so people can think. Which reminds me of one of my favorite videos…

Once you’ve approved someone, you can set up their lease on the website, and link your bank account to it. The tenant can then link up their bank account and either pay manually each month or set it to draw automatically. There are other options like not allowing partial payments, which is important because if you are thinking of evicting someone, if you accept even a partial payment, that can constitute your acceptance of it as a month’s rent in court.

CozyPayments

The website keeps a ledger of payments. As you can see here, these tenants paid their security deposit and first month’s rent as money orders, so I created an Offline Payment to credit their balance on the website. Otherwise, this all happens automatically. Both of our apartments’ tenants pay through Cozy, and that has worked flawlessly, although the payments take 5 days to show up.

I am fairly lenient on payment dates. I have it in my lease that if they were sending a check, it would have to be postmarked by the 5th business day of the month. Similarly on Cozy, I want the payment made on their side by the 5th business day. The fact that it doesn’t actually hit my bank account for a week doesn’t bother me. So if immediate payment is an issue for you, you should know that your rent will not show up for a week. You can blame America’s antiquated ACH system for this more than you can blame Cozy.

So in short, so far my experience with Cozy has been great. It’s taken out a lot of the paperwork, footwork, and just plain work, from vetting tenants and accepting payments.

If you own a rental property, how do you collect rent and screen tenants? Do you hate paper as much as I do?

54 Comments

  1. Norm, I printed off ten copies of this post to give to friends.

  2. Hey Norm,

    We’re listening, and thanks for the review. In the not-too-distant future you’ll be able to have tenants upload documents, and you’ll be able to upload/save things as well (like receipts, leases, etc.).

    We’re always working hard to improve, and it’s with folks like you that we get to do so. Cheers!

    Best,
    Gino Zahnd
    CEO & Founder at Cozy

  3. I need my rent no later that the 5th from my tenant. Is it true it takes a week to post? What can I do so its in my account sooner?

    • Norm

      June 12, 2016 at 2:25 pm

      Actually, they just put in a new feature called Express Payments that takes 3 business days. But you have to pay $2.99 per unit per month for that feature. Not worth it for me. I just make sure I have enough in my account between the date my mortgage payment goes out (2nd business day of the month) and when my rent payments show up (5th business day).

      Other than that, you are at the mercy of the ACH system.

  4. You shouldn’t invest in real estate if you have to pay a mortgage.

    • Norm

      June 21, 2016 at 10:16 pm

      I disagree, Tiny Tim. The rent is there to pay the mortgage and then some, eventually leaving you, when the mortgage is paid off, with an asset you can sell if you want or a nice cash flow if yo keep it. If people always saved up the cash to buy houses outright, there wouldn’t be much rental investing going on at all.

      • You are absolutely correct, Norm. If you wait until you have the cash to buy a property, you’ll find you never buy a rental at all!

    • It’s the OPM (Other Peoples’ Money) principle. Using leverage helps accumulate assets and then you control their future potential. I just paid cash for a house then immediately used it as leverage/collateral to purchase a duplex with a higher loan to value. I had no money out of pocket to purchase the duplex and actually received over $10,000 just for closing on the deal along with current rents and deposits. Hard money lenders are typically easier to get creative with but find a good one because they can be expensive.

  5. Nice article. thanks. What do you do for a lease ?

    • Norm

      June 21, 2016 at 10:13 pm

      I found one on BiggerPockets.com that many other landlords have used, and just made some slight alterations to fit our needs. If you make an account, you have access to a lot of handy downloads. Of course, I’m struggling to find where they are on the site now because they re-designed it.

  6. But good review, thanks!
    My only concern is…isn’t it a bit unfair to applicants that they have to pay $20 to *just apply* for your places? I mean, don’t you want to meet them first, and/or they tour the place, before they shell out money to see if it’s a deal? If you have ten applicants, 9 of them are losing money by applying for your places?

    • Norm

      June 27, 2016 at 10:41 pm

      Oh Roger, if we only had that problem of so many applicants! I tell everyone, if they apply and I approve them, I refund their money. So essentially, *I’m* paying for the service. We’ve never had more than one interested party at a time, so simultaneous applications have never come up. If there was, I would let the later people know “Don’t bother applying and paying. There’s someone in line ahead of you, so I’ll let you know if they fall through.”

    • I applaud you for taking the cost of vetting the tenant on yourself. That would, to me, make you a very attractive landlord. We recently went through a difficult time finding a home to rent (we’re relocating and not in a position to buy until our home in another state sells) and have seen firsthand that an application fee is standard (at least in our market). We paid $50 per adult for our application fee. That’s pretty high, but the place is great and the terms of the lease are fantastic. Our realtor advised us to ask whether the company was accepting multiple rental applications simultaneously so that we didn’t end up losing out on an application fee.

      • Norm

        July 4, 2016 at 10:11 pm

        Thanks, Rosebriars! Yes, I encourage people to hold off on applying if I have more than one interested party. Otherwise, I would just end up upsetting someone and taking their money. $50 PER PERSON especially sounds outrageous.

  7. I’m late to this discussion, but I am curious about the tenant screening part of Cozy. Did your report, that you received after Cozy investigated your applicant, indicate what they searched, concerning evictions and crime?

    I’ve read that only government law enforcement people have access to the national crime databases. In other words, private companies like Cozy and individuals like you and I are excluded.

    And presumably evictions are only recorded at the county level.

    It’s possible for anyone to manually search the websites of a county’s court system, for many counties. But when I tried it for my own county, it included those Are-you-human-not-robot? tests. So they might be denying access to Cozy and similar services.

    In other words, how do you know Cozy’s background checking is any good?

    • Norm

      July 4, 2016 at 10:06 pm

      Well, I know that Cozy partners with a company called Checkr for criminal background checks. You can check Checkr.com to see more about how that works. I’ve never looked into it much. But it definitely works at least somewhat, because it found an extensive criminal history for one our applicants. Most of the activity was from 15-20 years ago, and from different counties. I guess it could depend on each county. I also Googled another applicant and saw they had a restraining order against them, which I don’t think would show up on the criminal check. The Checkr search and a basic Google search are enough to put my mind at ease

  8. USED COZY.CO

    IT WAS CRAP!

    CRAP! NO SUPPORT! NO PHONE # TO CALL!

    CAN’T VIEW TENANTS REPORTS, NO HELP FROM SITE!

    • I use Cozy and their customer support has been wonderful, and fast. ??? I email, they email back, the same day. Tenant’s report may have been revoked by the tenant, they can do that. Or the report could have expired. As soon as you get it, print it out, or it might disappear.

  9. potential tenant question

    August 4, 2016 at 11:25 am

    Hi Norm! Came across this helpful post when trying to learn more about cozy. I am in the process of looking for rentals and one of the homes that I’m interested in directs potential tenants to apply on this site, but I have to say that I’m very, very weary of putting in so much personal information (including income, credit check, background information, etc) when I don’t have a phone number, email, or name of the landlord or even many pictures of the house listed online. In your experience, do I have a good reason to have my spidey senses tingle? Do you have any communication with a potential tenant prior to them submitting the application (which does cost–and while I see that you make it clear that will be reimbursed, that is NOT the case for this particular property we are looking at)? Do you schedule viewings for them ahead of time? It just seems very strange to me to ask for money upfront without even giving the folks the benefit of viewing the place in person, etc.

    Just curious to hear more about this from your perspective.

    • Norm

      August 4, 2016 at 7:24 pm

      Oh yeah. I mean, I wouldn’t apply for an apartment without seeing it. Doesn’t matter if it’s through Cozy or not. I’ve never understood how people could do that. Actually one of our current tenants left their prior apartment after six months because they didn’t see it beforehand and were misled about it.

      For me, showing the apartment comes first. I mean, I list the application link in the advertisement, but don’t expect anyone to apply until after seeing it.

  10. Cozy is very flexible and it is worth thinking that it is an additional tool that can be used in the standard processes many landlords.

    This is basically how I use it. I have my own website which has a lot of detail on it property plans, photos videos to walls examples of lease agreements etc. etc. etc. and also a lot of detail about how I work and what sort of landlord I am. Honest, fair, legal, reasonable and flexible. And I explain something that is very fundamental I provide a property and they turn it into their home, and they must pay the rent in full on time every month. Everything after is a bonus, my flexibility, etc. If they cannot do that and cannot prove that they have done that, and don’t go any further in the process go and find another property and do not go any further in this process.
    1. I advertise the property in a number of locations
    Pretty much everyone comes back with when I can see the property.
    2. I do not my phone typically, I allowed to go to voicemail I am quite happy for people who call without leaving a voicemail to not be a tenant of mine at this stage.
    3 I have a set response in text that I send. It indicates that they should go to the website and read all about how I work and look at all the details regarding the property. Then they send text or email back that explains why they think that we would work well together. Many inquiries cease at this point. Therefore this part of the process weeds out a lot possible candidate but my point of view is very clear if they cannot be bothered read a website and then make a reasoned reply, they are likely not be bothered to do many other things like the cost of the property correctly.
    4. It is only after I receive an email or text which indicates they clearly read website do I entertain talking with them and asking some other basic questions, their capability of paying, their ability to fit into the neighborhood and other background info. I think this is a way of focusing one’s time on the people that are likely to be the best tenants, not wasting their time or my time.
    5. So to the viewing; there is more fact-finding and also getting a feel of the type people they are they would fit in being my tenant, being a neighbor, member of the community etc. It is at this point I make the decision of whether I want to go to the next stage, which where I would open cozy for applications, and if they Sometimes they take time and then come back and say yes they would like to progress. So the point that the decision is made is varied. And the application will then gather the information check credit check etc. and that ensures that all answers are written by the applicants. In the event of discovering discrepancies of truth it is very difficult for the tenants to deny that the information they provided and they have typed into a website! was an accidental lie! If there are multiple candidates I make it clear to them that is the case and I also make it clear to them if they are the only ones. I also indicate that all discussions so far are dependent on the outcome of the background checks and credit checks
    6. Most time I agree to sharing the cost of background and credit checks, but if they have been nickel diming me I don’t!! Part of the application process for me is to gather the supporting documents and references.
    7. So not drag this out any further I normally at this point make my decision and I will inform the tenants and the potential tenants. I then accept the application in cozy set up the monthly rent, security deposit length of lease etc. with all the other normal things that we do which is the checklists and signing a contract etc.

    This is just a summary, but I hope it indicates there are different ways I guess the next net of cozy is that the very flexible and it can be fitted into most landlord processes.

    And finally there is another nice little features that are available to cozy for instance if you are renting to several student for example which are all equally culpable on the lease agreement you can set it up so that a proportion of the rent is taken from each of them and if there is any default student coz emails the rest of the students who the defaulting student!! So mostly this issue is sorted out without the landlord needing to be involved!! I think I read that the latest version has more flexibility of when it the month the money is taken from the bank accounts.

    Once last thing, I let my potential tenants seek references on ME from my existing and past tenants !!

    PS I have not proof read this doc. my apologies

  11. I think some Landlords and Tenants still prefer manual process instead of automated like Cozy, because they think they will have more control with dealing this stuff in-person an to make sure it did work . Sometimes, they think, its difficult to use automated process due to online frauds, identify thefts and most LandLords and Tenants are not much familiar with technology too and it need practice and learning for them.

    • Norm

      August 24, 2016 at 6:44 pm

      Yup. I had one person who didn’t want to give her social security number because she an identity theft in the past. She didn’t want to have a credit check done because of this. Luckily, someone else accepted before I had to consider her.

  12. Thanks Norm. But I still believe that Cozy demand must be increasing day by day and that is good. Initial marketing when product is released, to convince landlords to use system and to have their faith is I think is the biggest challenge initially. Not sure how Cozy dealt with it to win this situation.

    Cozy for sure is flexible but if I think myself as a landlord or tenant, I need to learn the system for few days before I start using it and gain confidence. I see it more useful for Landlords that are overseas and collect payments.

  13. For now I am just looking for an online rent payment option. How does Cozy work with tenants already in place? Can you skip the background checks and application process?

  14. As much as Cozy seems to be the best option for tenants as well as landlords, I’ve recently been trying the rentigo app. It doesn’t make me complaint about why I receive the payments after the due dates from my tenants, because it offers direct online payments and has been quite an effective app to use for both sides! I’d suggest you guys take it a look here at http://www.rentigo.com
    -Ryan

  15. Norm,

    Thank you for the review. Very informative.

    Dave

  16. I would like to know what Cozy’s angle is for being free. It is free, isn’t it? Where are they making their money? I’d like to know before entering my properties and info there as a landlord.

    • Norm

      December 5, 2016 at 6:00 pm

      From what I gather, they make their money on the credit and background checks. Combined, those are $40. Also, you can sign up for expedited rent payments which cost a few dollars each time, and you receive them a few days earlier.

  17. Do you mind sharing why you picked cozy over rentalutions?

    • Norm

      December 8, 2016 at 5:53 pm

      Because I’ve never heard of Rentulations before! Looks really similar. I can’t tell if they do criminal background checks, but I like the totally online leases.

  18. Does cozy allow you to collect rent from or for commercial properties? What other methods of collecting rent do you give to your tenants besides cozy, ones that don’t have access to the internet or don’t do online banking of sorts?

    • Norm

      December 29, 2016 at 10:03 pm

      I would assume anyone or business could pay by Cozy. It’s a simple ACH payment.

      I allow our tenants to also pay by check or money order, addressed by the 5th of the month, but no one has used that option so far. We don’t allow checks to be used for security deposits.

  19. Thanks for the detailed review. We are trying to find the best way for our tenants to pay electronically. As crazy as it sounds, we have a few tenants without banking accounts. Have you experienced this? Any suggestions?

  20. Thanks for this info! Found your article when researching Cozy for our first rental home. I was excited about its features, particularly the fact that you state you can set up to not allow for partial payments; however upon signing up and doing more research I can’t find this option and actually am reading on Cozy’s website that they do in fact allow for partial payments. Can you tell me how you set it up to not allow for it? Or perhaps I misunderstood. Thanks!

    • Norm

      January 11, 2017 at 10:25 pm

      I’m actually not sure. It looks like there’s not an option to disallow partial payments, but it might be that it’s just the default to accept only full payment. Might be best to ask the company.

  21. DAVE VAN HANDEL

    January 8, 2017 at 3:16 pm

    You say “You can also just straight up link to the application on Craigslist”. When I put the link for doing the Application into my Craigslist ad, Craigslist blocks publishing the ad. How do you get that to work?

    • Norm

      January 9, 2017 at 6:54 am

      Same way you put an email address. You can replace the periods with “(dot)” and it works. It’s not a clickable link, but people get the point.

  22. Can you accept a manual application and used cozy to run credit and background checks only?

  23. Thanks for the great article Norm!

    I’ve been looking into this myself. I like your point about paying for the credit / background checks. In a tough rental market that can make the difference.

    Fortunately my market in NJ has been hot. Prospective Tenants are expected to pay for everything. I do give them some initial guidelines so they can self screen and avoid an unnecessary fee. If they’re credit score is below 600 or if they’re income is less than 3x the rent I tell them not to bother with the application.

    Domenick
    AccidentalRental.com

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