It’s vital for owners of rental properties to establish a reliable rent collection strategy. Besides choosing a suitable rental rate, the management of rent payments is a critical choice for property owners.
Through the adoption of an effective rent collection mechanism and early preparation, you can incentivize timely payments from your tenants. Let’s delve into the best methods for rent collection from tenants and the strategies to steer clear of.
Best Methods for Direct Rent Payment
- Online. Currently, various strategies for collecting rent from tenants are available. As online payment systems become more prevalent, online rent payment emerges as the top choice for rental payment. This method provides tenants with the convenience and safety of online payments, while ensuring property owners receive payments promptly. 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. For their convenience and simple usability, these services have achieved great popularity among tenants and landlords. Tenants have the advantage of quickly requesting and sending money, which simplifies the process of paying rent, making it speedy and effortless.
- ACH Debit. Property managers are currently utilizing novel techniques to ensure rent is paid promptly. ACH debit represents one of these new approaches. This method permits tenants to supply their bank account info for rent to be automatically withdrawn each month. Nonetheless, this setup may not sit well with some tenants, making it crucial to provide a selection of two or three payment options. Also, it should be noted that fees are commonly associated with each payment method, and these can widely vary. Hence, doing your due diligence prior to choosing a payment method is crucial.
Payment Methods to Avoid
Recommending specific payment methods to your tenants for rent payments is prudent. Opting out of cash payments is wise because they can muddle tracking efforts. Should a disagreement arise, verifying the payment date and amount from your tenant could be problematic. Hence, it’s advantageous to use payment methods that provide a clear and easily accessible record.
Opting for personal checks may not be favorable due to their slow processing time and risk of bouncing, leading to bank fees for both you and your tenant. Under these circumstances, money orders and cashier’s checks may be preferable, particularly for security deposit collection. It is crucial to unambiguously state your preferred payment method and to have a method for documentation to establish a robust paper trail, thus preventing future disputes or confusion.
While there could be occasions that call for the use of these less optimal payment methods, it’s prudent to refrain from them. These payment methods usually involve complicated documentation and are prone to complications. Banning these payment methods in lease agreements could serve to unequivocally state that such means of rent payment are not permitted.
Collect Through a Property Management Company
Rental properties can yield significant returns, yet the task of rent collection is often arduous and lengthy, regardless of circumstances. Yet, should you wish to make the process easier, contracting with a rental property management company could be the solution you seek. With the expertise and experience they bring, a well-regarded property management company can seamlessly manage the rent collection process, allowing you to focus on the other critical areas of property ownership.
Renting is made easy with Real Property Management Tri-Cities! As part of our tech-savvy property management services, we include the capability for online rent payment. Contact us online or call 509-572-5440 today to learn more about our quality services in Burbank and nearby!
Originally Published April 1, 2022
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