Drop-boxes and snail mail still work as ways to collect rent, but technology has made collection rent easier, more automatic, and, therefore, more reliable. Some of the best ways to collect rent from tenants involve no paper checks at all. Instead, e-payments through ACH (automated clearing house) systems or direct deposits to your bank account make payments automatic. As a result, tenants incur fewer late fees, and rent receipts are more reliable.
Recurring ACH Payments
To set up automatic payments, a tenant must have a bank account or credit card, and access to a computer or mobile phone that supports a payment app or secure websites. They must simply enter their landlord’s information, the amount of the payment, and the recurring date on which it is to be paid. ACH payments can go in either direction – the tenant can send the payment from their account, or the landlord can direct their bank to pull the rent payment from the tenant’s account. The property owner must have the right kind of account, and their tenants must share their bank information to make this option a possibility.
ACH payments don’t happen immediately. To avoid late fees, tenants should set the recurring payment up for three days before the due date.
Most people who own cellphones already use some type of online payment service or app, such as Apple or Google Pay, PayPal, Venmo, or Zelle. Some of these apps carry fees while others, like Zelle, are free if the sending and receiving banks support the app. Apps like Zelle and Apple Pay require only a phone number or email address to transfer payment. To use Apple Pay, both parties must be Apple account members.
Merchants use Square, and landlords can use it, too. Property owners can integrate Square on their websites or access it via a mobile device. There is a delay of one to three days to receive payments, but faster deposits are possible with a fee.
Rent Collection Software
Online rent collection services such as Rent Merchant, Rentec Direct, and Rent Track collect rent and apply late fees automatically. They can even offer additional property management services, such as creating work orders and background checks. Property management companies that handle these and many other services for property owners may pay for and use these kinds of online tools. Obviously, property management companies that care for multiple properties for multiple property owners are better situated than individual landlords to absorb the fees these property management software systems charge.
Tenants will have different comfort levels with different kinds of payments. The best way to collect rent from tenants may be the way tenants prefer. Offering the traditional drop-box or accepting physical checks by mail may still be the preferred method for some tenants. Others appreciate the convenience and reliability of online or mobile payments. Maintaining various ways to pay will enhance the property’s appeal for a range of excellent tenants. Investors that own properties in the Metro Atlanta area can rely on Excalibur Homes for rental property management services.