Owners of rental properties must prioritize creating a strong plan for rent collection. Selecting a proper rental rate and managing rent payments are pivotal decisions for property owners.
Through the adoption of an effective rent collection mechanism and early preparation, you can incentivize timely payments from your tenants. We’ll look into the best practices for gathering rent from tenants and outline the tactics to avoid.
Best Methods for Direct Rent Payment
- Online. Today, a range of options is available for rent collection from tenants. However, as online payment systems gain popularity, online rent payment has become the preferred method of 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 risen as a trustworthy and easy solution for both tenants and property owners.
- Payment App. The use of apps like Venmo, Zelle, and PayPal represents a contemporary method for rent payment. Tenants and landlords alike have widely embraced these services for their ease of use and convenience. The facility for tenants to rapidly request and dispatch money facilitates a speedy, efficient, and smooth rent payment experience.
- ACH Debit. Property managers have started to embrace innovative strategies for securing rent payments on time. ACH debit is one method among these. Through this method, tenants can share their bank account details to enable automatic rent deductions monthly. Nonetheless, this setup may not sit well with some tenants, making it crucial to provide a selection of two or three payment options. 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. 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. Therefore, money orders and cashier’s checks prove to be superior options, notably for gathering 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 methods often present recording complexities and are associated with various issues. Forbidding these payment methods in your rental agreements could help clearly communicate that you do not accept rent payments through these mechanisms.
Collect Through a Property Management Company
The ownership of rental properties has the potential for high earnings, but the act of collecting rent can be painstaking and slow, even in the most favorable conditions. However, if simplification of the process is desired, the recruitment of a rental property management company might be the solution needed. Leveraging their expertise and experience, a distinguished property management company can adeptly manage the rent collection process, affording you the opportunity to concentrate on other crucial elements of property ownership.
Renting is made easy with Real Property Management Lakeside! Our property management services, enhanced by technology, offer online rent payment options. Contact us online or call 863-877-1078 today to learn more about our quality services in Polk County and nearby!
Originally Published April 1, 2022
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