Rent collection is a major challenge for the majority of rental property owners. One of the most essential decisions a property owner will make, along with determining how much rent to charge, is determining how to manage it. The greatest strategy to encourage on-time rent payments is to have a good rent collection method in place and ready ahead of time. Examine some of the most effective strategies for collecting rent from tenants, as well as a few that should be avoided at all costs.
Best Methods for Direct Rent Payment
- There are numerous alternatives available for collecting rent. But, these days, with so many individuals making use of the convenience of online payment systems, online rent payment is by far the most popular rental payment method. Tenants prefer the security and convenience of making payments online, and property owners benefit from the faster deposit of such funds.
- Payment App. Payment apps like Venmo, Zelle, and PayPal are another up-and-coming option for paying rent. These services are also quite useful for many tenants, as they allow them to request and send money in a quick and simple manner.
- ACH Debit. Finally, some Turlock property managers are now setting up ACH debit for their tenants, which can be another good way to make sure rent is paid on time, but it can also be a lot of work. If the tenant is comfortable, they can supply their bank account details and have their rent withdrawn automatically each month. Some tenants may object to this arrangement, therefore providing them with a choice of two or three options may be beneficial. It’s also worth noting that each payment option has its own set of fees. Because fees vary, it’s crucial to complete your research before deciding on a payment option.
Payment Methods to Avoid
On the other hand, there are some payment methods that you should not let your tenants use. Paying rent in cash, for example, should be avoided because it is difficult to generate a paper trail. It would be difficult to show when and how much your tenant paid if a dispute arose. Personal checks are particularly problematic since they take a long time to clear and can bounce if there is insufficient money, causing you and your tenant to incur bank fees. Money orders and cashier’s checks are typically acceptable methods of payment, particularly when collecting a security deposit. Simply pick whatever way you desire and have a method of documentation ready to generate a solid paper trail.
While you may need to utilize one or more of these techniques on occasion, you should try to avoid them whenever possible. Methods like these are difficult to document and riddled with problems and inadequacies. You may want to include a clause in your lease documents prohibiting these payment methods to make it clear that you will not take rent payments in this manner.
Collect Through a Property Management Company
Even in the best-case scenario, collecting rent may be a time-consuming aspect of rental property ownership. However, this does not have to be the case, particularly if you hire a rental property management company to assist you. We offer tech-enhanced operations at Real Property Management Valley Wide, such as online rental payments.
Hiring a property management company is one of the best ways to keep your rent payments coming in on time, month after month. Contact us today to learn more about our quality services!
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