Rent collection is a major challenge for the majority of rental property owners. Along with deciding how much rent to charge, determining how to manage it is one of the most critical considerations any property owner will make. The greatest strategy to encourage on-time rent payments is to have a good rent collection method in place and ready ahead of time. Let’s take a look at some of the most effective strategies for collecting rent from tenants, as well as a few to avoid.
Best Methods for Direct Rent Payment
- There are numerous options for collecting rent. However, with so many individuals making use of the conveniences of online payment systems these days, online rent payment is by far the most popular rental payment method. Tenants appreciate the security and simplicity of making payments online, and property owners benefit from the quicker deposits of those payments.
- Payment App. Payment apps such as Venmo, Zelle, and PayPal are other methods of making rent payments that are becoming increasingly popular. For many tenants, these services are also quite useful, as they make requesting and delivering money quick and simple.
- ACH Debit. Finally, some Orange County property managers are now setting up ACH debit for their tenants, which can be another good way to make sure rent is paid on time, but it can also be a lot of work. It is possible to have the rent automatically debited from a tenant’s bank account if they feel comfortable doing so. Some tenants may be uncomfortable with this arrangement, therefore providing them with a choice of two or three options may be beneficial. It’s also worth noting that most payment methods have costs associated with them. Because fees vary, it’s critical to complete your research before committing to one way of payment.
Payment Methods to Avoid
There are a few payment methods, however, that you should discourage your tenants from utilizing. Paying rent in cash, for example, should be avoided because it is difficult to generate a paper trail. If a dispute arises, establishing when and how much your tenant actually paid would be challenging. Personal checks are also a concern because they take a long time to clear and can bounce if there are insufficient funds, costing you and your tenant money in bank fees. Money orders and cashier’s checks are generally accepted, especially when a security deposit is being collected. Simply pick whatever approach you like and have a means for documenting your actions prepared to generate a reliable paper trail.
While you may need to utilize one or more of these techniques on occasion, you should try to avoid them whenever possible. These methods are difficult to document and have numerous issues. You may even want to prohibit these payment methods in your lease paperwork to make it clear that you will not accept these forms of rent payment.
Collect Through a Property Management Company
Even in the best-case scenario, collecting rent may be a time-consuming aspect of rental property ownership. However, this does not have to be the case, particularly if you hire a rental property management company to assist you. At Real Property Management Impact, we provide technologically advanced methods such as online rental payments.
Hiring a property management company is one of the best ways to keep your rent payments coming in on time, month after month. Contact us today to learn more about our quality services!
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