Landlords and property managers can increase on-time rent payments and make life more convenient for tenants by offering these rent payment methods for their rental properties. From paying rent online to electronically paying with cash, there are a number of options beyond the traditional check in the mail.
As a landlord, you rely on consistent and on-time rental payments to ensure your business’s success. Fostering on-time payments is a delicate balancing act that requires screening for responsible applicants and offering tenants convenience and ease when rent is due.
Offering multiple rent payment options is a crucial way to meet the diverse needs of today’s renters, and the more options available to your tenants, the more likely you are to meet their needs. These three payment methods are ideal offerings in today’s digital world, and data shows that the tenants using them are more likely to pay rent consistently and on time.
Pay Rent Online
Accepting rent online is one of the most reliable ways to collect rent payments each month. With online rent payments, renters have the option to pay rent via a secure electronic funds transfer from their checking account (ACH) or with a credit or debit card.
Online rent payments are incredibly convenient for your tenants who no longer have to fuss with driving to your office or sending rent in the mail. Allowing tenants to pay rent online from the comfort of their homes is a huge convenience and ensures security (no one wants to deal with a check or cash being lost in the mail).
For landlords and property managers with property management software, online payments are instantly recorded in your software and updated to your ledgers. All payments (including on-time, missed, and late rent payments) are recorded in your software, making accounting simple and mitigating associated with manual entry.
Learn more: The Best Way to Collect Rent Online
Autopay Rent
Allowing tenants to use ACH payments is by far the easiest way to save renters time and money while ensuring rent is paid on-time. The Consumer Financial Protection Bureau refers to ACH transaction as “an ACH transaction is an electronic money transfer made between banks and credit unions across a network called the Automated Clearing House (ACH).”
In layman’s terms, this means tenants can automatically and securely have funds pulled from their bank account to pay rent each month, which eliminates the stress of a missed or late payment due to simply forgetting about when rent is due. For this reason, it’s unsurprising that data has shown that ACH payments result in on-time rent over other payment methods.
Even over the COVID-19 pandemic, when renters were more likely to avoid rent payments or pay rent late, data was clear that automatic payments were key to ensuring tenants avoided late fees.
Learn more: Data Shows Automatic Payments Prevent Late Fees and Save Renters Money – White Paper
Credit Card Rent Payments
Allowing tenants the ability to pay rent with credit cards provides flexibility in times of temporary financial gaps and can give savvy tenants the opportunity to pay rent while building their credit. Financially savvy tenants have the ability to pay rent with credit cards (providing a convenient online payment option) and can immediately pay off that purchase while building credit and even getting credit card perks, depending on their provider. While there are multiple benefits to allowing tenants to pay with credit cards, there’s no doubt that alongside other online rent payment options, offering it can give you a competitive edge. This is particularly true for younger renters who seek out convenient resident benefit options like paying rent online.
Learn more: The Benefits of Allowing Tenants to Pay Rent With A Credit Card
Electronic Cash Payments at Convenient Locations
While paying rent online is a great option for many renters, some still prefer to pay with cash. Unfortunately, for landlords and property managers, this requires a certain amount of overhead to manage. Landlords who don’t have a professional office have to collect rent in person or allow tenants to send cash in the mail (which can easily get stolen while sitting in the mailbox). For property managers with a team and an office, even the most upright front staff can accidentally mishandle cash by either miscounting or manual payment data-entry errors. There is always the risk of losing or misplacing a deposit on the way to the bank, as well as the potential security or safety risk of handling large amounts of cash from multiple tenants when the beginning of the month comes around.
Cash payment solutions are the answer to this problem, allowing tenants to pay rent with cash at one of their favorite grocery or convenience stores that they frequent anyway. One option for Rentec Direct property management software clients is PayNearMe. Rentec Direct landlords and property managers have currently been able to accept electronic cash payments from tenants via PayNearMe at over 24,000 cash payment locations.
Learn more: Rentec Direct and PayNearMe Offer More Convenient Locations for Cash Payments with Addition of Walgreens
Integrated electronic cash payments eliminate the need for extensive loss prevention policies and the chore of traveling to the bank to deposit large quantities of cash, while also adding the bookkeeping benefits associated with online payments. Cash rent payments can be automatically recorded in your software, eliminating the need for manual entry.
Are there any payment options landlords should consider avoiding?
As a landlord, there is no doubt that you want rent to be paid consistently and on time. For this reason, it can seem like any payment method is preferable to risking inconveniencing your tenants.
Unfortunately, not all payment methods are created equal, and some are just plain risky. Even traditional cash or check payments come with a certain share of risk. While some payment methods pose a higher risk than others, when offering ways for tenants to pay, landlords and property managers alike should consider risk and convenience both when opting to accept a specific payment method. Keep in mind that some options come with better protections than others.
Avoid Peer-to-Peer Payment Options
Peer-to-peer (P2P) services such as Venmo and CashApp and most gateway services like Zelle were designed to give end-users an easy way to exchange money between themselves. Since they were not designed for business use, there are some ways that these services can add additional risk to the rent collection process. From legal compliance concerns to tax reporting complications to chargebacks, there are multiple reasons these services should be avoided for business use.
Learn more: Should Landlords Accept Rent Payments From Zelle, Venmo, and CashApp?
