One of the most critical aspects of having a lucrative rental property is receiving monthly payments on schedule. However, before receiving those funds, property owners must first decide how the rent should be paid. Rent can be collected in a number of different ways. However, the greatest ones are those that fit your property management style and the desires and demands of your tenants. Here’s what you need to know about choosing the proper rent collection technique for you to make your decision a little easier.
Variables to Consider
The ideal rent collection strategy for you is determined by a number of criteria. Consider how many tenants you’ll need to collect from each month, how far you live from your rental property, and how comfortable you are with using technology to manage rent payments. Each of these factors can help you narrow down your options significantly. Additionally, you may wish to evaluate how frequently and in what manner you wish to interact with your tenants. While frequent positive communication is important to Huntersville property managers, coming up every month to collect rent may convey the wrong message to your tenant.
Convenient and Well-Documented
Another critical factor to consider when selecting a method of rent collecting is if the approach fits two critical criteria: ease and the capacity to document each transaction. Now more than ever, today’s tenants are looking for tech-driven amenities to make their lives easier. According to a recent study, 83% of consumers prefer to pay their bills online. However, keeping solid records of all rent payments and other transactions is just as vital as being convenient. A well-managed rental property requires a payment system that can provide both.
Payment Methods
Payment methods are divided into two types: traditional and electronic. Traditional payment methods are consistent with historical property management practices and include cash, personal check, cashier’s check, or money order. While there are times when a money order or cashier’s check is appropriate – for example, when a security deposit is required — receiving cash or personal checks is not optimal in the majority of cases. Cash payments are difficult to track, and personal checks have a number of drawbacks, including sluggish delivery and extended wait times for checks to clear the bank.
Electronic payment methods, on the other hand, have grown in variety during the previous several years. While property owners can choose to pay electronically using ACH transfers or Square, money can now be readily transferred via payment apps such as PayPal, Zelle, or Venmo (to name a few).
The majority of electronic payment methods will keep track of each transaction, making the paperwork a breeze. However, some tenants may be concerned about the security of transmitting money over the internet or choose not to use payments applications for their monthly fees. The primary disadvantage for property owners is the fees; all electronic payment options will often incur additional charges, so it’s critical to thoroughly examine each option before making a final selection.
Automate and Communicate
With so many payment methods available, it’s critical to select how you want to manage rent collecting before an issue arises. The more automated the form of a rent payment that you select, the simpler the entire procedure may be for you. On the other hand, tenants may feel confined 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 keep in touch with your tenant and consider providing two or three payment options. As long as each method provides the convenience and documentation you require, this combination strategy may be a suitable compromise. Rent collection does not have to be complicated, but it might be challenging to sort it all out on your own. Instead, think about the advantages of selecting a property management business that accepts rent payments online. Give us a call at 704-220-0110 if you’re ready to delegate the day-to-day tasks of managing a rental property to the experts.
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