Owners of rental properties must prioritize creating a strong plan for rent collection. Managing rent payments, alongside determining a fitting rental rate, is a crucial decision for property owners.
By setting up an effective rent collection process and getting ready in advance, you can persuade your tenants to make their payments on time. Let’s discover the top methods for collecting rent from tenants and highlight the strategies to avoid.
Best Methods for Direct Rent Payment
- Online. Presently, several approaches are available for tenant rent collection. Nonetheless, due to the growing appeal of online payment systems, online rent payment is now the most popular method for rental payments. This technique allows tenants to benefit from easy and secure online payments and assures property owners of timely payment reception. Online rent payment has become known as a solid and convenient choice for tenants and property owners.
- Payment App. Utilizing apps such as Venmo, Zelle, and PayPal offers a novel and modern approach to rent payment. The user-friendly nature and convenience of these services have made them favorites among both tenants and landlords. The facility for tenants to rapidly request and dispatch money facilitates a speedy, efficient, and smooth rent payment experience.
- ACH Debit. Property managers are now introducing new tactics to secure prompt rent payments. ACH debit represents one of these new approaches. By using this method, tenants have the option to give their banking information for the automatic deduction of rent monthly. Nonetheless, this setup may not sit well with some tenants, making it crucial to provide a selection of two or three payment options. It’s also crucial to recognize that each payment method often comes with its set of fees, which can greatly vary. Therefore, it is essential to carefully research before settling on a payment method.
Payment Methods to Avoid
Recommending specific payment methods to your tenants for rent payments is prudent. Best practice is to eschew cash payments to simplify tracking. In case of disputes, evidencing the timing and amount of rent paid by your tenant might be challenging. Therefore, it’s wise to favor payment methods that provide a clear and easily accessible record.
Using personal checks can be less than optimal because of the extended time they take to clear and the risk of bouncing, which can lead to bank charges for you and the tenant. Therefore, money orders and cashier’s checks prove to be superior options, notably for gathering security deposits. Clearly articulating your payment preference and implementing a documentation strategy is essential for creating a strong paper trail, thereby averting future disputes or perplexities.
Even though you might have to resort to these less desirable payment methods under certain conditions, it’s best to avoid them. These methods often present recording complexities and are associated with various issues. Excluding these payment methods from your lease agreements may be prudent to explicitly indicate that rent payments through these channels are not accepted.
Collect Through a Property Management Company
Rental properties can be a valuable investment, though the rent collection process may be cumbersome and lengthy, irrespective of the circumstances. However, for those aiming to streamline the process, enlisting the services of a rental property management company could provide the solution. Leveraging their expertise and experience, a distinguished property management company can adeptly manage the rent collection process, affording you the opportunity to concentrate on other crucial elements of property ownership.
Renting is made easy with Real Property Management Impact! Online rent payment is a feature of our technology-enhanced property management offerings. Contact us online or call 919-439-8989 today to learn more about our quality services in Orange County and nearby!
Originally Published April 1, 2022
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