One of the most vital parts of maintaining a profitable rental home is receiving rent payments on time. But in order to get those payments, property owners first need to choose how that rent should be paid. There are many different ways to collect rent payments. But the best ones are those that fit your style of property management and your tenant’s wants and needs. To make a choice a bit easier, here’s what you need to know to choose the right rent collection method for you.
Variables to Consider
Finding the best rent collection method for you depends on several different factors. For example, consider how many tenants you will need to collect from each month, how far away you are from your rental property, and how comfortable you are with incorporating technology tools to help you manage rent payments. Each of these elements can help you narrow your options down considerably. You may also want to consider how often and in what way you want to interact with your tenants. While frequent positive communication is very beneficial for Forsyth property managers, showing up each month only to collect the rent could send your tenant the wrong message.
Convenient and Well-Documented
Another important thing to consider before choosing a rent collection method is whether it meets two key criteria: convenience and the ability to document each transaction. Now more than ever, today’s renters are looking for tech-driven conveniences to make their lives easier. A recent study found that 83% of consumers prefer to pay their bills online. But along with convenience, it’s equally significant to keep good records of all rent payments and other transactions. Finding a payment method that can provide both is necessary for a well-managed rental property.
There are two main types of payment methods: traditional and electronic. Traditional payment methods reflect property management methods of the past and are just what you’d expect: cash, personal check, cashier’s check, or money order. While there are reasons to request a money order or cashier’s check – in payment of a security deposit, for example – accepting cash or personal checks isn’t ideal for most conditions. Cash payments are hard to document, and personal checks come with many obstacles, from slow delivery to long wait times as checks clear the bank.
On the other hand, electronic payment methods have become more varied over the last few years. Property owners can choose from electronic payment options like ACH transfers and Square, but now money can easily be sent through payment apps like PayPal, Zelle, and Venmo (to name a few).
Most electronic payment methods will provide a record of each transaction, making documentation automatic. But some tenants may be worried about the safety of sending money online or prefer not to use payments apps for monthly bills. The biggest downside for property owners is the fees; all electronic payment methods typically will have added costs, so it’s important to research each one before making your final decision.
Automate and Communicate
With so many payment methods, it is important to decide how you’d like to handle rent collection before it becomes a problem. The more automated the rent payment method you choose, the easier the entire process may be for you. Simultaneously, tenants may feel restricted if you accept only one payment method, especially if it relies on a technology they aren’t comfortable using. For this reason, it’s important to communicate with your tenant and be concerned about offering two or maybe three ways to pay the rent. This combination approach may be a good compromise, as long as each method delivers the convenience and documentation you need.
Collecting rent payments does not have to be complicated, but it can be a task to figure it all out all by yourself. On the other hand, consider the benefits of hiring a property management company that offers convenient online rent payment options. If you are prepared to turn the day-to-day tasks of managing a rental property over to the professionals, give us a call at 478-257-7055.
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