Receiving rent payments on time is one of the most crucial aspects of running a profitable rental property. However, in order to receive those payments, property owners must first decide how rent should be paid. Rent payments can be collected in a variety of ways. However, the best ones are those that fit your property management style and the demands and needs of your tenants. Here’s everything you need to know to pick the best rent collection technique for you.
Variables to Consider
Choosing the optimal rent collection strategy for you is dependent on a number of criteria. Consider how many tenants you’ll need to collect rent from each month, how far you live from your rental property, and how comfortable you are using technology to assist you to manage rent payments. Each of these factors can significantly reduce your selections. You should also think about how often and how you want to interact with your tenants. While frequent positive communication is very useful for Hollywood property managers, going up each month simply to collect the money could send your tenant the wrong message.
Convenient and Well-Documented
Before choosing a rent collection method, be sure it fits two critical criteria: ease and the ability to document each transaction. Today’s renters are searching for tech-driven amenities to make their lives easier now more than ever. According to a recent survey, 83% of consumers prefer to pay their bills online. But along with convenience, it’s also crucial to retain solid records of all rent payments and other transactions. For a well-managed rental property, finding a payment method that can do both is critical.
Payment Methods
Traditional and electronic payments are the two main types of payment procedures. Traditional payment options are just what you’d expect: cash, personal check, cashier’s check, or money order, and they reflect property management systems from the past. While there are times when a money order or cashier’s check is appropriate, such as when paying a security deposit, accepting cash or personal checks isn’t always the best option. Cash payments are difficult to track, and personal checks present a slew of issues, ranging from slow delivery to lengthy wait times for checks to clear the bank.
On the other hand, electronic payment methods have expanded in recent years. Electronic payment alternatives like ACH transfers and Square are available to property owners, but money may now be delivered quickly and conveniently through apps like PayPal, Zelle, and Venmo (to name a few).
The majority of electronic payment methods maintain a record of each transaction, which automates paperwork. However, some tenants may be concerned about the security of online payment or choose not to utilize payment applications to pay monthly expenses. The fees are the largest drawback for property owners; all electronic payment methods often come with additional fees, so do your homework before deciding.
Automate and Communicate
With so many payment options, it’s critical to plan ahead of time how you’ll handle rent collection. The more automatic the rent payment method you select, the more straightforward the entire procedure will be for you. At the same time, tenants may feel confined if you only accept one payment option, particularly if it relies on a technology with which they are unfamiliar. As a result, it’s critical to communicate with your tenant and consider offering two or maybe three methods of rent payment. This hybrid strategy could be a reasonable compromise if each option gives you the convenience and documentation you require. Rent collection doesn’t have to be complicated, but figuring it all out on your own might be tricky. Instead, think about the advantages of selecting a property management firm that accepts online rent payments. Give us a call at 973-747-5629 if you’re ready to delegate the day-to-day chores of managing a rental property to the pros.
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