Collecting rent payments is and has always been the most important aspect of maintaining healthy cash flow in a real estate rental business. While rent was traditionally paid with cash and paper checks, our increasingly digital world has altered several aspects of our lives — including rent collection.
Online rent collection methods, especially on property management software, have become more and more popular among landlords, and for good reason. While cash and paper checks are still viable payment methods, they bring along risks and inconveniences that paying online eliminates.
Here are five reasons you should be using online rent collection instead of paper checks and cash:
- Recurring payments
Setting up automatic payments makes things easier for everyone. Tenants don’t have to worry about taking the time to get their rent money together every month. They also don’t have to worry about forgetting to pay rent on time. With recurring payments, they can set it up once, and the rent collection software does the rest.
This is also beneficial to you, since you can rest assured knowing that you’ll automatically be receiving rent payments in full and on time. This eliminates the need to hunt down your tenants for your rent.
- Flexible payment options
Most online payment methods allow rent to be paid via credit cards, debit cards, and ACH payments, which pull the funds directly from the tenants’ bank accounts. This allows each tenant to pay using the method that works best for them.
Online payments can also be done from anywhere and do not require both the landlord and tenant to be present. If a tenant were to pay with cash or check, they’d have to coordinate schedules with the landlord so that the payment could be delivered in person. Since online payments are completed on a computer, the need for both parties to be physically available is eliminated. This also allows tenants and landlords to have the flexibility for vacations or trips without having to worry about delivering the money on time.
- Enforcing late fees
While the ability to set recurring payments and have flexible payment options seriously reduces the likelihood of late payments, there’s still a possibility that they’ll come up.
As a landlord, late fees can be tough to enforce. Nobody wants to come across as the bad guy, and as such, you might choose to remain lenient with late fees if forced to collect them in person. It’s important to remember that your real estate business can’t afford tenants who don’t pay on time.
Rent collection software makes things easier and less uncomfortable for you. It provides automatic late fees at a fixed amount and with a set grace period, as outlined by your lease agreement. Automatic, customized reminders can also be set to remind tenants when rent payments are past due.
- Automated records
When making a payment online, all transactions are automatically recorded and documented. You don’t have to worry about doing any of the bookkeeping yourself, which not only saves you from the tedium, but also eliminates any room for human error.
If you’re using best property management software, you’ll have the added benefit of exporting these documents, which you can easily share with partners, owners, and accountants, or keep for yourself as backups.
- Save Time
With services such as recurring payments, automatic late fees, and automated records, it’s clear how much more convenient and less time-consuming online rent collection is compared to cash and paper checks. But it doesn’t stop there.
When you receive a cash or check payment, you’re usually going to have to make a trip to the bank to deposit the money. The more tenants you have, the more physical payments you must deal with, and the more of a hassle depositing checks or keeping track of cash becomes. Online payments, on the other hand, are fast and require nothing from your end.
If you haven’t made the switch to online rent collection yet, now is the time to do so. As discussed above, it’s more convenient, efficient, and effective than cash and checks, and you’ll see the immediate benefits of collecting rent online the second you make the switch.