A solid rent collection strategy is fundamental for anyone owning rental property. Besides choosing a suitable rental rate, the management of rent payments is a critical choice for property owners.
With an effective rent collection strategy and prior preparation, you can prompt your tenants to submit their payments promptly. Let’s investigate the optimal approaches to collecting rent from tenants and pinpoint strategies to avoid.
Best Methods for Direct Rent Payment
- Online. Today, a range of options is available for rent collection from tenants. Yet, with online payment systems becoming more popular, online rent payment stands out as the favored rental payment approach. Offering tenants convenience and security for online payments, this method also assures timely payment receipt for property owners. The online rent payment option has established itself as a credible and convenient method for both tenants and property owners.
- Payment App. A fresh and modern method for paying rent involves the use of platforms like Venmo, Zelle, and PayPal. Due to their ease of use and convenience, these platforms have gained significant popularity among both tenants and landlords. Tenants enjoy the quickness in requesting and sending money, streamlining the rent payment process to be efficient and straightforward.
- ACH Debit. Property managers are currently utilizing novel techniques to ensure rent is paid promptly. One of these methods includes ACH debit. This approach enables tenants to offer their banking information, leading to their rent being deducted automatically each month. However, this arrangement may not appeal to all tenants, so it’s essential to offer a few different payment methods as alternatives. Also, it should be noted that fees are commonly associated with each payment method, and these can widely vary. Consequently, it’s imperative to thoroughly research before deciding on a payment method.
Payment Methods to Avoid
It is wise to guide your tenants towards particular payment methods for rent. Opting out of cash payments is wise because they can muddle tracking efforts. In the event of a conflict, it could become tough to demonstrate the specifics of your tenant’s payments. For this reason, preferring 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. In scenarios like these, money orders and cashier’s checks are more advantageous, especially for securing security deposits. 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 approaches are generally complex to log and riddled with issues. 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
Investing in rental properties can be financially rewarding, however, rent collection can become a tiresome and prolonged process even in optimal conditions. Nevertheless, if simplifying the process is your goal, engaging a rental property management company might be the answer. 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 Limitless! We provide online rent payment as part of our technologically advanced property management services. Contact us online or call 805-702-7800 today to learn more about our quality services in Ojai and nearby!
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