When it comes to owning a lucrative rental property, getting rent payments on time is one of the most critical aspects. But to obtain those payments, property owners first need to specify how that rent should be paid. Rent can be collected in a variety of ways. However, the ideal ones are those that fit your property management approach as well as your tenants’ demands and needs. Here’s what you need to know about selecting the best rent collection technique for you to make your decision a little easier.
Variables to Consider
The optimal method of rent collection for you is determined by a number of distinct factors. Consider the number of tenants you will need to collect rent from each month, the distance between you and your rental property, and your comfort level with using technology solutions to assist you in managing rent payments. Each of these elements can help you narrow down your alternatives considerably. Additionally, you may want to evaluate how frequently and in what manner you wish to interact with your tenants. While frequent positive communication is beneficial to Hudson property managers, showing up every month to collect the rent may convey the wrong message to your tenant.
Convenient and Well-Documented
Before selecting a rent collection method, be sure it fits two critical criteria: ease and the ability to document each transaction. Today’s tenants, more than ever, are looking for technological conveniences to simplify their life. According to a recent study, 83 percent of customers prefer to pay their bills online. However, in addition to convenience, it is critical to maintain accurate records of all rent payments and other activities. Finding a payment option that can give both is vital for a well-managed rental property.
Payment methods are divided into two categories: traditional and electronic. Traditional payment options are just what you’d expect: cash, personal check, cashier’s check, or money order. While there are times when a money order or cashier’s check is appropriate, such as when paying a security deposit, receiving cash or personal checks isn’t desirable in most cases. Cash payments are notoriously difficult to document, and personal checks provide a slew of issues, ranging from slow delivery to lengthy wait times for checks to clear the bank.
On the other hand, electronic payment systems have expanded in variety in recent years. While property owners have electronic payment alternatives like ACH transfers and Square, money may now be readily transferred using payment applications such as PayPal, Zelle, and Venmo (to name a few).
The majority of electronic payment methods maintain a record of each transaction, which simplifies documentation. However, some tenants may be concerned about the security of online payments or choose not to utilize payment applications to pay monthly expenses. The primary disadvantage for property owners is the expense; all electronic payment options will often incur additional fees, so it’s critical to thoroughly examine each option before making a final selection.
Automate and Communicate
With so many payment options, it’s crucial to figure out how you want to manage rent collecting before it becomes a problem. The more automatic the type of rent payment you choose, the simpler the entire procedure will likely be for you. On the other hand, tenants may feel constrained if you take only one form of payment, particularly if it is based on a technology they are unfamiliar with. As a result, it’s critical to communicate with your tenant and to consider providing two or three payment options. This strategy could be a suitable compromise if each method provides the convenience and documentation you require. Rent collection does not have to be complicated, but figuring it out on your own might be tricky. Consider the advantages of selecting a property management firm that accepts rent payments online. If you’re ready to hand over the day-to-day management of a rental property to the specialists, call us at 603-801-2235.
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