Receiving rent payments on time is one of the most critical aspects of running a profitable rental property. However, in order to receive those payments, property owners must first decide how the rent should be paid. Rent payments can be collected in a variety of ways. However, the greatest ones are those that complement your property management style and your tenant’s desires and demands. 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
Several considerations play a role in determining the optimal rent collection method for you. 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 significantly assist you in narrowing your alternatives. Additionally, you may want to evaluate how frequently and in what manner you wish to interact with your tenants. While frequent positive communication is important to Dallas property managers, coming up every month to collect rent may convey the wrong message to your tenant.
Convenient and Well-Documented
Before choosing 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, 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 can be classified into two broad categories: 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, such as when paying a security deposit, accepting cash or personal checks isn’t always the best option. 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. Electronic payment alternatives like ACH transfers and Square are available to property owners, but money may now be delivered quickly and conveniently through apps like PayPal, Zelle, and Venmo (to name a few).
The majority of electronic payment systems will keep track of each transaction, making paperwork simple. Some tenants, however, may be concerned about the security of sending money over the internet or choose not to utilize payment applications for monthly expenses. The most significant disadvantage for property owners is the fees; all electronic payment options have additional costs, so it’s critical to examine each one before making a final decision.
Automate and Communicate
With so many payment options available, it’s critical to select how you want to manage rent collecting before an issue arises. The easier the entire process is for you, the more automated the rent payment option you choose. At the same time, if you just accept one payment option, tenants may feel confined, especially if it relies on a technology they are unfamiliar with. As a result, it’s critical to communicate with your tenant and consider providing two or three payment options. This hybrid strategy could be a reasonable compromise if each option gives you the convenience and documentation you require. Rent collection does not have to be tough, 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. If you’re ready to delegate the day-to-day management of your rental property to specialists, call us at 214-257-0101.
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