If you’re a landlord, you’ve likely asked yourself, “What are the best payment methods for collecting rent?” Collecting rent on time is undoubtedly the most critical aspect of property management.
Fortunately, there are many options for making the rent payment process simple and painless for your investment holdings. Here’s what tenants and landlords should know about the different methods of collecting rent:
There are numerous types of checks that a property manager can accept. Some provide a higher level of security than others. Taking checks requires some planning. Do you accept checks sent by mail? Do you want your renters to drop their checks off at a specified location?
You can even arrange for them to bring their checks to you in person. The biggest disadvantage of checks is that not many people use them anymore, especially the generations that are doing most of the renting.
What are the best payment methods for collecting rent? The easiest option is to accept rent in cash. It is, however, not advised. It’s easy to lose track of cash payments. As a result, they’re simple to reject. If you prefer cash, you’ll need to set up an acceptance procedure, just like you would for checks.
Choose whether you wish to do the transaction in person or via a drop-off box. Whether you’re a landlord or tenant, it’s essential to get a receipt to show proof of payment anytime you pay in cash.
Peer to Peer Apps
Peer-to-peer apps have become incredibly popular over the last decade. Their user-friendly and social media-integrated solutions make it simple for tenants to pay their rent. Keep in mind, though, that they might not be the best option for you.
For companies, Venmo charges a transaction fee of 3%. If you dislike high transaction charges, this might not be the best alternative for you. For landlords wondering, “What are the best payment methods for collecting rent? this app might not be a great option.
Zelle is a great mobile solution that works with almost all major banks. Zelle transfers are completely free. Only a mobile phone number or an email address is required. Zelle payments are also instant, and money is deposited directly into your account. Renters can use Zelle to set up regular payments. One disadvantage for tenants is that if your bank doesn’t support Zelle, you won’t be able to set up recurring payments.
You can learn more about collecting rent with Zelle here.
PayPal was one of the first online payment companies, and almost everybody uses a PayPal account.
There are some disadvantages to using PayPal to collect rent. First and foremost, if there are any issues, you are entrusting your fate to PayPal representatives. Second, you’ll need to open a business bank account, which will cost money.
Each rent payment will be charged 2.9% plus $0.30. So what are the best payment methods for collecting rent? Some peer-to-peer apps definitely make the cut!
The vast majority of people use direct deposit to receive payment from their employer. Landlords are using this method to accept rent from their tenants due to its lack of major disadvantages.
It’s quick and painless to set up ACH payments. It only needs to be set up once for your tenants. They must authorize their bank account details and then choose to make regular payments automatically.
Please remember that payment normally takes three days to arrive once it has been processed. ACH payments are frequently suggested as a safe and effective substitute for paper checks due to their convenience.
Property Management Software
Other internet applications that focus on collecting rent are available as well. When hiring a property management team, they’ll often offer a special software they use to make it easy to collect rent.
Some will even add features such as automatic late charges and rent payments, as well as background checks and work management software.
Are you still asking yourself, “What are the best payment methods for collecting rent?” An online rent collection solution is your best bet if you want to streamline the process as much as possible. Several of the payment methods listed above have disadvantages. Paying for a technology that is expressly designed for rent collection could easily save you time and money.
Here are some of the advantages of collecting rent online:
- Balance tracking
- Multiple payment methods available
- Automatic Invoicing
- Automatic Late Fees
- Credit Reporting
- Access to emergency loans (Available only through PayRent)
- Added convenience and flexibility
- Open 24/7
- Direct deposits
- Partial payment blocking
- Automatic Payment Reminders
- Scheduled payments
- Safe and Secure