What to Look for When Choosing Rent Collection Software
September 29, 2020
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If you aren’t using rent collection software yet, now is the time to switch. It may seem overwhelming entering the world of online rent collection, but it’s certainly worth the trouble — and it’s not as bad as it may seem.
Rent collection software has the sole purpose of making your job easier. Tenants can automate payments. You’re able to send out reminders before due dates. Late fees are easily enforceable. You’re offered automatic, detailed financial records. Tenants can choose between multiple payment options. The list goes on.
With all of this technology at your fingertips, enlisting the help of rent collection software is a no-brainer. But with so many options, it can be hard to know what to look for and which software platform will work best for your business. Below, we go over 5 important features to look out for when choosing a software platform. When you do commit to a software provider, you’ll be sure that they’re the right fit for you.
One of the most basic features of rent collection software to be aware of is the type of platform offered. Local and cloud are the two platform types you’ll see. A local platform is one that must be downloaded onto individual devices. A cloud platform is one that is internet-based and uses outside servers to house the software. Think, for example, Microsoft Word (local) vs. Google Docs (cloud). Let’s look at the pros and cons of each.
- Feels more secure — Although there is a low security risk to cloud-based software, many users feel more secure using software that is locally based.
- Must be installed on all devices — It can be pretty time consuming to download software on every computer that you and your team use, especially if you need a support member to come assist with the installation process.
- Doesn’t allow for work on the go — Landlords are busy, constantly on the move between properties. With local software, you can’t jump on and do a little work unless you’re on a device with the software already installed.
- No installation needed — Because everything is stored on external servers, you don’t have to worry about installing anything on your devices. It can be accessed anywhere with internet access.
- Enables you to work from anywhere — Cloud-based software is constantly accessible. Whether you’re on a phone, tablet, laptop, or desktop, you’re always able to hop on and do your work.
- Feels less secure — Cloud-based platforms have been rumored to be less secure than traditional software. This rumor is mostly unfounded. The likelihood that your business information will be breached is slim to none.
Intuitively, your rent collection software needs to have all of the rent collection features you want and need for your real estate business. Here are a few things to keep an eye out for:
Payment Type Options:
When collecting rent digitally, it is good practice to provide your tenants with the option of making payments through either credit/debit cards or ACH. This way, tenants can pay in the way that works best for them, and you don’t have to worry about hearing complaints. A good rent collection software will offer both.
One of the primary reasons to switch to rent collection software is that it enables tenants to set recurring payments. In doing so, they don’t have to worry about remembering to pay each month, and you can rest easy knowing that you’ll receive your payments on time.
The ability to send out payment reminders before rent’s due is a key service provided by good rent collection platforms. Some platforms even allow you to automate these reminders, so you don’t have to go to the trouble of sending them out each month.
Enforceable Late Fees
No one likes to be the bad guy, and with rent collection software, you don’t have to be. A good platform will enable you to set late fees for your chosen amount. You should even be able to customize the grace period to match the policy outlined in your lease agreements.
A feature you may not think to expect from rent collection software is financial bookkeeping. The best collection platforms will automatically document all payment activity, including rent payments and any applicable fees. Records should be easily exportable so you can upload them to your favored financial program. These features allow you to download monthly data as a backup, print results for partners and owners, and easily share with your accountant at year end.
Prices and Fees
All rent collection platforms price their services a little differently, though most do so in one of three ways:
- Fees based on individual payments (often different for credit/debit cards and ACH payments)
- Monthly software usage fees
- Both individual payment fees and monthly software fees
When choosing which platform to go with, be sure the amount you’re paying makes sense for the size and operation of your business. If you only have a few units, for example, it might not be wise to pay high monthly fees in favor of fees based on individual payments.
Even the most tech-savvy landlords will need a little software help at some point. When this time comes, you’ll want your collection platform to have a wide range of service hours; you never know when you’ll need help. Because you can’t afford to sit around waiting for assistance, you’ll also want them to have quick response times. Lastly, you’ll prefer to be working with a team that is kind and helpful. The better the support team, the more likely you are to be satisfied with their services.
Hopefully you’re feeling a little more confident shopping around for rent collection software. Knowing what to look for is half the battle, but it’s a battle worth fighting. With the help of rent collection software, you’ll be collecting rent more efficiently and effectively than ever. As a landlord, streamlined collection is crucial to the success of your rental business.