Research shows that late rent payments is a number one concern for landlords and property managers. The more time you spend following up – calls, emails, texts… sometimes all of the above – is time that you can’t devote to the rest of your business. In the worst case scenarios, you lose even more time filing for an eviction just to get the tenant out.
There are a variety of ways to protect yourself from late or non payments. Screening is always your first line of defense, but a solid rent collection strategy will help encourage your tenants to pay rent on time. It will also boosts your capacity to compete and grow your rental business.
In this interest, we have made a brief rundown of the available options for collecting rent payments (including our #1 recommendation):
Rent Collection Methods
Every landlord and property manager will have slightly different business needs, so we have compiled a list of collection methods.
It’s possible to get rent from your tenants through money orders or mail-in checks, but this also means that payments are likely to delay. Worse still, checks may get lost along the way.
Collecting in Person
This method ensures you have a check in your hands on the designated day. However, it may leave you with more record-keeping and miles to travel, thus increasing your operational costs.
If you have an office, tenants can drop off rent payments there. You can use a dedicated drop-off box placed strategically in your rental property. Disputes may arise if a payment goes missing and a particular drop-off location may not be convenient for all your tenants.
Collect Rent Online
This is our #1 recommendation. One-third of Americans have paid a bill late due to forgetfulness, and accepting online rent payments helps simplify and automate that process for both landlords and tenants. When you use an online rent payment system, you and your tenants can take advantage of tools such as automatic reminders and recurring payments to ensure that you receive your payment on time.
Reasons to Switch to Online Rent Payments
Have a look at the following reasons why you should consider switching to online rent payments.
1. Save Time
Collecting rent can be a lengthy process, especially if done by check or money order. You’ll have to:
- Collect the payments or checks
- Prepare deposit slips
- Deposit money order or checks to the bank
- Post receipts
- Check follow-ups to ensure checks don’t bounce
- Adjust your booking keeping
This can take a lot of time, but when you set up an online portal to collect rent payments, you can reduce the time spent on the manual processes associated with paper-based payments by up to 65%. Imagine what you can achieve with more than half of your day back and a hassle-free rent week!
Paying rent online is fast, easy, and convenient for your tenants as opposed to having them drive to your office or make sure that they get the check in the mail on time. There are a variety of things that can delay a check, but with the ability to pay rent online, tenants can make payments promptly, regardless of location. That means more on-time payments and fewer followups to track down rent.
Security is of the utmost importance when dealing rent payments.
Criminology Professor David Maimon from Georgia State University estimates that $11-30 million is being lost across the country due to drop box thefts. He also notes that the information your tenants share via checks and money orders contains sensitive data that—in the wrong hands—can make you and your tenants victims of identity theft.
On the other hand, online rent payments are end-to-end encrypted to mitigate the risk of identity theft and fraud. Your financial data is secure, and your tenant’s financial information is safe.
4. Boost Your Cash Flow
Timely collection of rent is, arguably, the most fundamental aspect of your business. Online rent payment increases the percentage of on-time rent payments, thus creating a domino effect of profitability and efficiency.
AutoPay and automatic rent reminders streamline the reconciliation of account receivables. As such, you will likely receive full-balance, on-time payments every month, which ultimately boosts your cash flow.
The online ability for your tenants to split rent through an online portal will also allow them to conveniently submit their half of the payment on the day it is due rather than trying to coordinate with each other each month. Once set up, a system such as LandlordStation’s Tenant Portal can charge each tenant the amount owed and deliver it to your bank account in a timely manner.
5. Enhance Tenant Experience and Retention
Offering your tenants pay-on-go flexibility through an online rent payment option will boost your resident’s satisfaction and overall experience at your property. Envelopes, stamps, and checks may seem outdated (and possibly inconvenient) to your tenants, especially the more tech-savvy ones.
According to a study, millennials pay up to 61% of their bills online, while the older generation pays 42% of bills online. If you want to hold on to such tenants, the ability to pay rent online offers them yet another incentive.
When the tenants perceive that you have their convenience, ease, and best interest in mind, they feel connected to the property and to you as the landlord. Happy tenants are more likely to renew their leases, refer friends, and respect the community.
How We Can Help
In the course of managing your rental property, it’s easy to get overwhelmed by all the nuances and lose focus on what’s important. At LandlordStation, we offer you a full range of products and services guaranteed to make tenant and property management easy and seamless.
Our online rent payment solution is a super brand designed with unparalleled expertise to ensure you receive rent payments quickly and securely. Stop chasing down rent payments and focus on what’s important—growing your business.
For more information on Online Rent Payments or inquiries on how we can help, feel free to Contact Us today, and we will be more than willing to assist.