Last year, almost 20% of renters in America were behind on their rent payments. Although government aid and other credits have helped, some tenants still find it difficult to pay rent.
As a landlord, collecting rent is a way to get paid. If tenants find it hard to pay rent, consider offering different ways to pay.
Keep reading to learn about rent collection best practices.
Online Rent Payments
Rent collection is much easier with online rent payments. Landlords can work with a rental property management company that offers a rental portal.
A tenant portal makes a lot of things easier, including rent payments. Some of the best benefits of online rent collection are:
- Tenants can schedule recurring payments
- Decrease late rent payments
- Payment options and reminders
- Rent Payment statuses in real-time
- Rent payment security
A tenant portal will have all of these functionalities. Plus, they allow you to communicate with tenants on other important rental matters.
When tenants pay rent online, their funds can be set up to go directly into the proper account. This means that landlords can get paid faster.
In-Person Payments
Although it's easier for cash flow management purposes to receive online rent payments, in-person payments are beneficial as well. If you have a card machine, why not offer in-person rent collection?
Landlords often make the mistake of not accepting in-person payments because they worry about the card fee. However, losing a small percentage of a tenant's monthly rent is better than receiving nothing at all.
Check Payments
At the request of a tenant, you can allow them to pay for their rent using a check. Although a lot of tenants are trustworthy, be wary of this option.
Checks can bounce, but you won't know it until you try to put them into your account.
Checks have been used for decades as a reliable rent collection method. This is also a great option if technology is on the fritz for a day or two.
If you prefer to physically handle your rent, you can also set up a drop-off location for tenants to pay their rent. Although this is common with checks, you should allow your tenants multiple ways to pay rent.
Direct Deposit Payments
Online rent payment and direct deposit go hand in hand. If you don't have a tenant portal, consider setting up an auto withdrawal from a tenant's checking account each month.
Direct deposit helps you have peace of mind about receiving rent each month.
There are a few drawbacks to this, however. Banks may charge a fee for direct deposit services. Some tenants won't like the idea of their landlord having direct access to their bank account and information.
Rent Collection Best Practices
In-person payments, checks, and direct deposit payments are all great ways to collect rent each month. By far, the best rent collection practice is online payment using a tenant portal.
To have access to a tenant portal and all of its advantages, hire a rental property management team. Contact us today to learn more about how our services can help landlords like you.
