A solid rent collection strategy is fundamental for anyone owning rental property. In addition to setting the right rental price, managing rent payments stands as a key decision for property owners.
Implementing an efficient rent collection system and preparing beforehand can motivate your tenants to pay on time. 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. However, as online payment systems gain popularity, online rent payment has become the preferred method of rental payment. This approach grants tenants the simplicity and security of online transactions, ensuring landlords receive payments on schedule. Online rent payment is now recognized as a dependable and handy choice 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. For their convenience and simple usability, these services have achieved great popularity among tenants and landlords. Tenants enjoy the quickness in requesting and sending money, streamlining the rent payment process to be efficient and straightforward.
- ACH Debit. Innovative methods to ensure rent is received on time are being adopted by property managers. ACH debit stands as one example of these methods. By using this method, tenants have the option to give their banking information for the automatic deduction of rent monthly. However, since some tenants might find this arrangement unsettling, it’s vital to offer a choice of two or three payment methods. Moreover, it’s pertinent to mention that usage fees are typically charged by each payment method, and the amounts can vary extensively. Hence, doing your due diligence prior to choosing a payment method is crucial.
Payment Methods to Avoid
Encouraging tenants to stick to specific payment methods for rent is recommended. Opting out of cash payments is wise because they can muddle tracking efforts. 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.
Personal checks might not be ideal due to their lengthy clearance time and potential to bounce, incurring bank fees for both you and your tenant. Therefore, money orders and cashier’s checks prove to be superior options, notably for gathering security deposits. It’s vital to explicitly designate your chosen payment method and prepare a documentation system to forge a strong paper trail, helping to eliminate future disputes or confusion.
While circumstances may arise necessitating the use of one or several less-than-ideal payment methods, avoiding them is recommended. These approaches are generally complex to log and riddled with issues. Prohibiting these payment methods in your lease agreements might be beneficial to make clear that these are not acceptable means of rent payment.
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. However, if simplification of the process is desired, the recruitment of a rental property management company might be the solution needed. 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 Nampa! Our property management services, enhanced by technology, offer online rent payment options. Contact us online or call 208-960-0660 today to learn more about our quality services in Caldwell and nearby!
Originally Published April 1, 2022
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