For rental property owners, having a robust rent collection plan is crucial. Managing rent payments, alongside determining a fitting rental rate, is a crucial decision for property owners.
Establishing an effective rent collection scheme and preparing ahead of time can lead to timely rent payments from your tenants. Let’s examine the most effective rent collection techniques from tenants and identify which strategies to avoid.
Best Methods for Direct Rent Payment
- Online. At present, there exists a multitude of methods to collect rent from tenants. With the rising popularity of online payment systems, the preferred method for rental payment is increasingly becoming online rent payment. This approach grants tenants the simplicity and security of online transactions, ensuring landlords receive payments on schedule. The online rent payment system has proven to be a reliable and convenient alternative for tenants and landlords alike.
- Payment App. Apps like Venmo, Zelle, and PayPal introduce a modernized way to handle rent payments. Due to their ease of use and convenience, these platforms have gained significant popularity among both tenants and landlords. With the capacity to promptly request and send money, tenants find that paying rent becomes quick, efficient, and trouble-free.
- ACH Debit. Innovative methods to ensure rent is received on time are being adopted by property managers. ACH debit is one such innovative method. Through this method, tenants can share their bank account details to enable automatic rent deductions monthly. Yet, given that this arrangement might be unsuitable for some tenants, providing a choice from two or three payment methods is key. Additionally, it’s important to note that each payment method typically incurs usage fees, which can differ significantly. Therefore, it is essential to carefully research before settling on a payment method.
Payment Methods to Avoid
It’s advisable to prompt your tenants to adhere to certain payment methods for rent. Refraining from accepting cash payments is beneficial, as they can hinder proper tracking. In the event of a conflict, it could become tough to demonstrate the specifics of your tenant’s payments. Therefore, it’s wise to favor payment methods that provide a clear and easily accessible record.
Personal checks could be a poor choice as their clearance can be slow and they may bounce, causing bank fees for both the landlord and tenant. For these reasons, opting for money orders and cashier’s checks can be more suitable, especially in the context of security deposit collections. Clearly indicating your preferred payment method and maintaining a reliable documentation method are crucial for establishing a solid paper trail and avoiding future disagreements or confusion.
Even though you might have to resort to these less desirable payment methods under certain conditions, it’s best to avoid them. Such methods are often complex to document and come with numerous problems. 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
While rental properties offer a profitable venture, the process of collecting rent can prove to be laborious and time-intensive in any situation. However, for those aiming to streamline the process, enlisting the services of a rental property management company could provide the solution. A reputable property management company, with its wealth of expertise and experience, can effectively oversee the rent collection process, thus liberating you to attend to other vital facets of owning property.
Renting is made easy with Real Property Management Connection! Our property management services, bolstered by technology, include the option for online rent payment. Contact us online or call 727-279-7779 today to learn more about our quality services in Brooksville and nearby!
Originally Published April 1, 2022
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