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Three Different Methods for Collecting Rent from Tenants

Collecting Rent and keeping a record of every tenant can be a laborious job for a landlord. It becomes even more daunting if you are managing multiple rental properties. Thanks to modern technology, rent collection can be electronic, but that does not mean more traditional methods for collecting rent are obsolete.

Things to Consider When Choosing a Rent Collection Method

There are many methods a landlord can use to collect rent, and some methods are preferred over others. Consider the following when deciding which collection method to use:

The number of tenants/properties you need to collect rent payments from;
Your proximity to the tenants from whom you’ll need to pick up rent payments;
Whether you have a desire to cultivate a relationship or rapport with your tenants; and
Your level of comfort with technology.

1- Online Payments

Collecting rent payments online is the most convenient option for both the landlord and the tenant. You can use an automatic draft system so that your tenants’ rent payments are transferred to your bank account on the date of your choosing. You can also set up email reminders for your tenants to notify them of their pending rent payment or remind them of the last day they can pay rent without incurring a late fee.

Online Payments

There are many online sites and apps available to landlords to collect rent. These include PayPal, RentMerchant, RentMatic, Landlord Studio, Zelle Pay, and Venmo. You can find several other platforms that offer money transfer services. Some are free to use while others require either a monthly or one-time fee.

2- Payment Pick-Up

Asking tenants to either drop off their rent payment or going to pick it up has its advantages. If you choose to pick up the rent, you can use that as an opportunity to do a quick visual inspection of your property every month. It also gives you a chance to talk to your tenants and ensure that they aren’t having any issues with the property. If they are, you can initiate a maintenance request while you’re picking up the rent check. However, physically picking up rent checks may not be practical if you have several rental properties or apartment units.

If you want to have the rent check physically in your hands, it is better to visit the tenant rather than asking the tenant to deliver the check to your home. If tenants know your address, you run the risk of someone coming to your house the next time they have any issue at the property, which could prove problematic.

Payment Pick-Up

3- Traditional Collection Methods

Traditional methods of collecting rent are not as convenient as online methods but they still work. It’s important to ensure you have documentation of payment in the event there’s ever a payment dispute with a tenant.

✓ Checks

Payment by check use to be the most popular method. If you choose to use this payment option, decide how tenants will submit payment. Can they send their payments to you by mail or is there a dropbox they can use?

Certified and personal checks may bounce if the tenant does not have enough money in their bank accounts to fund the payment. On the other hand, cashier checks are more secure and they come with the bank’s insurance that funds are available and will be released upon deposit.

✓ Money Orders

Tenants may get a money order from the bank, local post office, or convenience store for a small fee. Money orders are essentially cash converted into check form and are typically viewed as a cash equivalent.

Conclusion:

Using an online rent payment method is growing in popularity thanks to technology. So, instead of using one method or the other, why not offer tenants multiple ways to pay their rent?  You can also communicate which method(s) of rent payment you prefer. Don’t forget to remind them of the rent due date and maintain a record of rent payments.

Read Also: What To Do When You Can’t Pay Rent

The post Three Different Methods for Collecting Rent from Tenants appeared first on NY Rent Own Sell.



This post first appeared on Real Estate Blog- NY Rent Own Sell, please read the originial post: here

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Three Different Methods for Collecting Rent from Tenants

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