As a property owner, receiving rent payments on time is essential for maintaining a successful rental home. But really, before receiving those payments, you must take into account the different rent collection methods available and prefer the one that best suits your management style and tenant’s requirements.
With multiple options, getting the appropriate rent collection method can be taxing. Accordingly, it’s significant to understand the available methods and review their pros and cons to make an informed decision. This will make sure that you receive rent payments according to schedule without any inconvenience.
Variables to Consider
If you’re trying to ascertain the best way to collect rent, there are several things you should think of. To cite an instance, how many tenants do you need to pick up from each month? Do you like using technology tools to manage rent payments? Taking into account these factors, you can very quickly narrow your options and figure out the appropriate fit.
When managing a property, you must look into the frequency and manner of your interactions with your tenants. While frequently engaging in positive communication can be very beneficial, only coming over to collect rent each month can give off a bad impression. It is significant to strike a balance between being quite involved and giving your tenants the space they need.
Convenient and Well-Documented
Before you single out and decide how to collect rent, ask yourself two things – is it uncomplicated, and can you keep track of every transaction? Currently, renters want tech that makes their lives so much better and easier.
Did you know that, according to a recent study, 83% of consumers prefer online bill payment? It’s no surprise, as online payments are advantageous, quick, and easy to tackle. Nevertheless, keeping track of all rental payments and other transactions is also very important. Finding a payment method that imparts both convenience and accurate record-keeping is important to manage your rental property appropriately.
Payment Methods
There are two main categories of payment methods: traditional and electronic. Traditional payment methods include cash, personal checks, cashier’s checks, and money orders, which have been used in property management for quite a while. But, as a matter of fact, electronic payment methods have become evermore popular and diverse over the years. Nowadays, property owners can select from the many electronic payment options, particularly ACH transfers and Square. Moreover, payment apps like PayPal, Zelle, and Venmo have made sending and receiving money electronically trouble-free.
Accepting cash or personal checks for payments can be challenging. Cash payments don’t really come with proper documentation, while personal checks can take a while to clear the bank. Because of this, it’s commonly better to go for money orders or cashier’s checks. They are typically more trustworthy and easy. When your tenant is paying a security deposit, it’s suitably reasonable to use a money order or cashier’s check.
Electronic payment methods offer a large advantage over traditional payment methods, as they present a detailed record of each transaction. This aspect makes documentation automatic, abolishing the need for manual documentation of each payment. This not only saves time but further helps keep track of your expenses and maintain financial records for later use.
Automate and Communicate
As to collecting rent, wisely selecting a suitable payment method is essential. By electing for a more automated rent payment method, you can streamline the general collection process and make it easier for yourself. In this manner, you can get down to other important aspects of managing your property without worrying about rent collection.
It’s important to offer tenants numerous payment options to shun restricting them to a single method that may be based on a technology they are not comfortable using. We urge rendering two or three payment methods and conveying the options with your tenant to warrant ease of payment and proper documentation. A combination approach can be a sensible compromise as long as each manner meets your requirements for documentation and convenience.
Take into consideration the benefits of hiring a property management company. Real Property Management Bluegrass gives tenants effortless online rent payment options. If you’re ready to turn the regular undertakings of managing a rental property over to the professionals, contact us online or call us at 859-684-2054.
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