It’s vital for owners of rental properties to establish a reliable rent collection strategy. Apart from setting an appropriate rental fee, overseeing rent payments is essential 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 investigate the optimal approaches to collecting rent from tenants and pinpoint strategies to avoid.
Best Methods for Direct Rent Payment
- Online. Presently, several approaches are available for tenant rent collection. Nonetheless, due to the growing appeal of online payment systems, online rent payment is now the most popular method for rental payments. This approach grants tenants the simplicity and security of online transactions, ensuring landlords receive payments on schedule. The online rent payment option has established itself as a credible and convenient method for both tenants and property owners.
- Payment App. Rent payment has been modernized with the use of applications 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 have the advantage of quickly requesting and sending money, which simplifies the process of paying rent, making it speedy and effortless.
- ACH Debit. New approaches are being implemented by property managers to guarantee timely payment of rent. ACH debit represents one of these new approaches. 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. It’s also crucial to recognize that each payment method often comes with its set of fees, which can greatly vary. Therefore, it’s important to conduct careful research before opting for a payment method.
Payment Methods to Avoid
It’s advisable to prompt your tenants to adhere to certain payment methods for rent. Best practice is to eschew cash payments to simplify tracking. Should a disagreement arise, verifying the payment date and amount from your tenant could be problematic. Thus, adhering to 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. Specifying your preferred payment method clearly and ensuring a documentation process is in place for a solid paper trail is critical to preventing future disputes or misunderstandings.
While circumstances may arise necessitating the use of one or several less-than-ideal payment methods, avoiding them is recommended. These payment methods usually involve complicated documentation and are prone to complications. It could be advantageous to disallow these payment methods in your lease contracts to affirm that rent payments via these avenues are not accepted.
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. Nonetheless, if your objective is to simplify the operation, the employment of a rental property management company could be the ideal resolution. 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 Results! Online rent payment is a feature of our technology-enhanced property management offerings. Contact us online or call 812-461-1676 today to learn more about our quality services in Warrick and nearby!
Originally Published April 1, 2022
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