Rent collection is a major worry for most rental property owners. Along with determining how much rent to charge, determining how to manage it is one of the most essential decisions any property owner will make. The greatest strategy to encourage on-time rent payments is to have a good rent collection technique set up 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 others that should be avoided.
Best Methods for Direct Rent Payment
- There are numerous options for collecting rent. However, with so many individuals making use of the benefits 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 like Venmo, Zelle, and PayPal are other new ways to pay rent. For many tenants, these services are also quite useful, as they make requesting and delivering money quick and simple.
- ACH Debit. Finally, some Burbank property managers are now allowing their renters to set up ACH debit, which is another wonderful approach to ensure rent payments are received on time. Rent can be automatically debited from the tenant’s bank account if they are satisfied with this. Given that certain tenants may be uncomfortable with this arrangement, it may be beneficial to provide them with a choice of two or three methods. It’s also worth noting that each payment option has a cost associated with it. Because fees vary, it’s critical to complete your research before committing to one way of payment.
Payment Methods to Avoid
On the other hand, you should discourage your tenants from using certain payment methods. You should avoid accepting rent payments made in cash, for example, because keeping a paper trail is difficult. If a dispute arises, establishing when and how much your tenant actually paid would be challenging. Personal checks are particularly problematic since they take a long time to clear and may bounce if insufficient funds are available, causing bank fines for both you and your tenant. When collecting a security deposit, money orders and cashier’s checks are frequently accepted. Simply pick whatever approach you like and have a means for documenting your actions prepared to generate a reliable paper trail.
While one or more of these approaches may be necessary on occasion, it is normally advisable to avoid them. These methods are difficult to document and have numerous issues. You might even wish to include a clause in your lease documents prohibiting these payment methods to make it clear that you will not take rent payments in this manner.
Collect Through a Property Management Company
Rent collection is a time-consuming element of owning rental properties, even in the best of conditions. It doesn’t have to be that way, especially if you engage a rental property management company to help you out. We offer technology-enhanced operations at Real Property Management Tri-Cities, including 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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