Rent payments are the fundamental source of income for most real estate businesses. In order to maintain a healthy cash flow, landlords must consistently collect rent payments on time and for the correct amounts. When tenants fail to meet the terms for rent as outlined in their leases, you must enforce late fees. It can be hard to juggle these tasks effectively while tending to all of your other responsibilities as a property manager. This is where online rent collection comes in.
Landlords have plenty of options when it comes to collecting rent online. The main methods of online rent collection are property management software, online bill pay, P2P platforms like Venmo and PayPal, and setting up collection with your bank. Of course, each method comes with its respective pros and cons.
Regardless of your chosen method of online rent collection, the benefits are undeniable. Below, we go over 5 of the major advantages that come with collecting rent online. If you haven’t been convinced to make the switch yet, you will be by the end.
#1 Set Recurring Payments
Most methods of online rent collection make it possible for tenants to set up recurring payments. They can set the payment interval and amount ahead of time so they don’t have to remember to make their payments each month.
Automated payments are great for tenants because it’s one less thing they have to remember to do, making it far less likely that they’ll have to pay late fees for missing rent.
Recurring payments don’t just benefit tenants, though. When they have the ability to automate their rent, you can rest easy knowing that your money will be delivered on time and in the correct amount. It truly is a win-win.
#2 Fewer Late Payments
There are a couple factors of online rent collection that result in fewer late payments. Because online rent collection typically makes it possible for tenants to automate their payments, you won’t have to worry about late payments nearly as much. This means no more tracking down tenants, listening to excuses, and worrying about whether or not they’ll pay.
What’s more, online rent collection allows tenants to make their payment from home. This way, they don’t have to worry about dropping off checks to you at time that you’re both available. Tenants can make payments when it’s convenient for them, and neither of you have to worry about coordinating schedules.
Some rent collection software will also send reminders and even automate late fees, making it even more likely your tenants will pay on time.
#3 Flexible Payment Options
Granting tenants with the option to choose their preferred payment method makes online rent collection a favorable choice for renters. Most forms of online rent collection provide tenants with the ability to choose between paying via credit/debit card or through ACH payments, which connect directly to their bank accounts.
Offering various payment methods isn’t the only flexible aspect of collecting rent online. Collecting payments online makes for a hassle-free delivery of funds. Because tenants are able to pay at whatever time works for them, they don’t have to worry about meeting up with you to drop off their payment at the first of the month. The more accessible the better.
#4 Enforceable Late Fees
No one likes to be the bad guy. With online rent collection, you don’t have to be. Most methods of online rent collection — with the exception of P2P platforms — enable landlords to set enforceable late fees.
Your chosen collection method should enable you to customize the late fee amount or rate, as well as the grace period. This way, you’re able to automatically enforce late fees based on the terms outlined in your leases, without having unpleasant conversations with your tenants. This isn’t only more efficient, but it also fosters a stronger tenant-landlord relationship.
#5 Automated Records
Automated records are the unsung hero of online payments. No matter what approach you use to collect rent online, they will all record every transaction made on the platform automatically. This is just a fact of online payments.
Automating records makes it easy to integrate transactions into your books without worrying about errors. It saves your time and your money and eliminates inevitable human error.
If you choose property management software as your method of online rent collection, this feature becomes even more advantageous. Most property management platforms not only record every transaction, but they also organize them into exportable documents that you can then share with partners, print out as backup records, or use in any way you need.
It’s Time to Switch to Online Rent Collection
It should now be evident that collecting rent online is a must if you want to run a successful real estate business. It enables you to collect payments efficiently, conveniently, and effectively. Online rent collection is the drop-box of the 21st century — now is the time to make the switch.