Top 5 Ways to Collect Rent
Collection of rent, in the 21st century, has only become more streamlined and easier for landlords and property managers to perform. With online technologies made available, receiving rent by the 5th of each month, should become a way of life. If your tenant is not able to make a timely payment, take action and start the eviction process right away!
Here's our top five ways to collect rent (without having to purchase an expensive software for managing your property) :
#5. PROVIDE TENANT THE MAILING ADDRESS OF YOUR BANK :
While this payment form is dependant on the tenant to mail in a timely fashion, those still using personal checks and not living close to a bank can still mail in funds. However, this technique require tenants to mail rent five days prior to it being due. They also need to complete a blank checking deposit slip (with account number and Payee on it). Also, they should NOT mail cash! While a no-brainer...it happens!
#4. DEPOSIT RENT DIRECTLY INTO YOUR CHECKING ACCOUNT FOR RENTAL ACTIVITY
Perhaps your tenant is not comfortable making online payment and finds mailing payment too tedious given the local mailman? Well, we have found that providing your tenant your checking account number and bank as another safe means to collect rent without having to show up at their front door. By doing so, rent can easily be paid by the due date so long as your bank branch is local for your tenant. Again, providing your tenant your account number and Payee name is critical. Also, double check that your bank permits cash deposits into your account. If not, personal check and/or certified funds may be the only way in which a tenant can make rental payment.
#3. QUICK DEPOSIT FUNDS TRANSFER BETWEEN BANK ACCOUNTS
While this method works best for landlords who may only have a handful of rental properties, "Quick Deposit" is offered by many large institutions in many states. The reason we don't recommend it for landlords that host many rental properties is because the transfer typically comes through as only an account transfer with only the last four digits of the account number being shown on the online bank statement. Thus, a landlord has no idea who transferred the funds unless you know who the funds are coming from!
Outside of this reason, we love using quick deposit!
#2. ONLINE ACCOUNT TRANSFER OUTSIDE OF BANKS
Yep...you knew this one was coming and there are so many options this day in age. Here's a list of some of our favorite ways tenants can pay rent online :
- Square Cash
- Google Wallet
While there may always be a transaction fee, online account transfer are quick and easy. Also, once setup, the tenant can make payment through this format every month and on time.
#1. ACCEPT CREDIT CARDS FOR RENTAL PAYMENT
This payment form is our #1 because once activated, a tenant has no excuse for late rent (unless they don't have a credit card account). However, a landlord will typically need to have an online property management software to really use this system effectively. Once setup, the tenant pays the credit card processing fee with rental payment.
The pros of a tenant paying rent with a credit card is that they can actually build their credit rating, over time, so long as they pay their credit card bill on time. Other than this, the fees are a lot to pay rent with a credit card. So, we recommend landlords provide this option to a tenant ONLY if they don't have the cash and want to arrange a payment plan. This way, it gets the landlord off the hook and provides instant rental payment.
Here's a few providers of credit card payments that are easy to work with :
Regardless of which forms of payment you accept and how you accept them, providing your tenant three ways in which to pay rent is recommended. This way, regardless of where your tenant is at with rent being due, they can pick and choose how to pay rent in a timely fashion.
This will limit headaches for the landlord, provide a fantastic tenant experience, and may very well lead to less turnover over time.
Do you have better ideas for how to pay rent in a timely fashion without the need for an expensive property management software? Please share!