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Collecting rent payments is one of the most basic responsibilities of a landlord. However, it is not an easy job as you might sometimes encounter tenants who refuse or cannot pay rent on time. Aside from stating clear terms in your lease agreement, there are effective rent collection methods you can use to reduce rent collection issues.
Rent Payment Methods You Can Use
Cash Apps
There are free and accessible platforms you can use to collect rent online. You can consider cash apps like Venmo, PayPal, or Zelle Pay for a more convenient means of paying, wherein the tenant will only need a smart device and an internet connection. These apps even have built-in digital records of rent payments, which can be beneficial in terms of accounting.
Bank Transfers
While cash apps function the same way as online banking, ACH transfers can be more secure and have direct access to both the tenant's and the landlord's bank accounts, eliminating the need to make transfers. With the security and additional convenience of online rent payments, you or your tenant will have to cover costs like transaction fees, depending on the arrangement you have on the lease agreement.
Rent Collection Software
Another avenue is property management software that has rent collection features like Rentvine and Azibo. These platforms can streamline operations since many aspects of the business can be navigated in one platform such as managing maintenance requests. There are even options where the rent collection process is already automated. Automatic payments mean that you'll have less to worry about as a landlord.
In-Person Rent Collection
Online rent collection is not for everyone, especially if you have tenants who are not as tech-savvy as others. You should still accept rent payments in person for those who prefer that to online payments. The only downside is that it can be time-consuming for both parties, and you will have to manually record the cash payments.
Tenant Portal
Some companies like Harland Property Management provide tenants with an online payment portal they can access 24/7, allowing them to not only make online rent payments but also view records of their transactions. They function similarly to online rent payment services, but the property management company can keep a closer eye on the platform.
Rent Collection Apps
One of the best ways to collect rent is through rent collection apps. One of the advantages of dedicated rent collection apps is that you can automate recurring payments, arrange partial rent payments, automate late fees, and record missed payments. However, some of the best apps you can use to collect rent may require a monthly subscription fee.
Credit or Debit Card
You can accept credit and debit card payments via third-party payment processing services. Some options like PayPal allow its users to link a bank account for online bill pay. One of the disadvantages of this is that credit card payments can fail when the tenant has reached their limit, and the same goes for debit cards.
How Many Payment Methods Should I Use?
As much as you can manage. If you have several ways to collect rent, your tenants will be more likely to pay on time. Even tedious options like direct deposits to a bank or credit union should be accepted as a way to collect rent from tenants. Many landlords already do so since it’s convenient for all parties involved and streamlines the rental payment process. However, it might be overwhelming to handle multiple accounts.
Is It Safe to Collect Online Rent Payments?
Online rent collection is arguably a safer option than traditional payment methods like physical checks since they can bounce or go missing. Other than the streamlined process of collecting online payments, the apps or software you use already have security measures that prevent data breaches and system malfunctions, especially for online bank accounts.
What is the Best Way to Collect Rent?
No answer applies to all landlords. It can depend on the situation, the rental property type, and the target market. For short-term rentals, for instance, you won't need dedicated online payment providers that allow recurring rent payments. Instead, you can use cash apps or cash payments for a faster process. More and more guests and tenants prefer to pay rent online instead of a direct deposit in banks.
What Are the Downsides to Rent Payment Collection Online?
A lot of online platforms provide certain features that automatically collect rent from tenants online, which helps the rental business run smoother. However, the convenience can sometimes have a price. You have to pay associated fees for rent collection tools like monthly subscriptions or transaction fees when tenants pay rent. This is why some landlords still prefer direct deposits.
Benefits of Using Rent Collection Tools
- Automated Payments
- Reduces Late Rent Payments
- Tenants Can Pay Online Conveniently
- Digital Records Can Be Viewed
- Late Fees Can Be Automated
- Most Platforms Have Built-In Security Features
How Does This Benefit My Rental Property?
Having more than one payment method and mentioning it in listings can help widen your tenant pool. It can be a deciding factor for people searching for rental units to rent. Given that online methods are becoming mainstream, adding app and software options helps you compete with other rental businesses better.
How a Property Manager Can Handle Rent Collection
Handling rent collection can be difficult even with single-unit rentals. You can never guarantee that your tenants will follow your lease terms and pay their dues.
With the help of a company like us at Harland Property Management, you can reduce risks like that.
Other than rent collection and an in-house tenant portal, we also conduct thorough tenant screening, ensuring that you get tenants who follow your rental business' terms. We have a dedicated team that can tell you about all the other services we offer that can help maximize the value of your investment property. Contact us to know more!
