Collecting rent is the lifeblood of your business if you’re a landlord. You can make it much easier for yourself and your tenants if you make the process digital. Always make sure your rent collection policy is clearly outlined in the lease so tenants know what to expect. You should never accept cash payments because it is harder to keep track of them, and this can work against you if any financial disputes arise. Here are some of the best ways to collect rent from tenants.
Use certified property managers
Evernest, Mynd and APM provide hassle-free property management services and have certified property managers in Colorado Springs. The company’s screening process means that only the best tenants are placed in your home. These are the type of tenants you can rely on to pay their rent in full and on time every month.
It is often hard to remain objective with your tenants when they come up with reasons for not paying their rent. Evernest collects rent for you from your tenants using payment methods that ensure you receive your rent in full and on time.
As the Evernest team manages many properties, collecting rent is an objective process with a specific system designed to handle the process optimally. There’s a well-considered process in place to handle late payments. Evicting a tenant is the very last option, and the company will handle this for you, too, if it becomes necessary.
Insist on online payments
Receiving rent by mail is an old-fashioned way to collect rent. It is very slow, and rent checks can arrive late or go missing. Collecting rent in person is another option for landlords, and it can be a way to connect with a tenant, but it’s not efficient for landlords with several properties in different areas.
You need to embrace technology and insist on online payments as a landlord. It is a convenient and popular choice for young tenants who are used to paying this way. They can make their payments at any time and from anywhere. They can also automate their rent payments by using an online payment app.
Specific rent management software enables you to send automated emails when payment is late. Tenants have to supply their email addresses for this to work. You can also set up a system that sends texts to tenants reminding them when payment is due or informing them that you are awaiting payment.
Use alternatives to bank-to-bank transfers
Bank-to-bank transfers may work well in other countries, but in the U.S., they can be expensive. The following methods are cheaper.
Zelle Pay allows you to collect rent payments through your banking app or through the Zelle app if your bank does not accept Zelle Pay. The payer must also have Zelle, and all you need is an email address or U.S. mobile number linked to an account to connect it with Zelle. Each bank account requires a different phone number or email address. The benefit of using Zelle is that transfers are free, and you will receive the money directly into your account. A tenant can set up recurring payments using Zelle as long as the option is supported through online banking.
Paypal has revolutionized online payments, and many people have Paypal accounts. They can quickly and easily send money from their Paypal account to yours. If you want to use Paypal to collect rent, you will need a business account, or you may risk violating the terms and conditions. You can set up recurring invoices for the monthly rent, and your tenants can pay using multiple sources, such as bank accounts, debit or credit cards.
Apple Pay is easy for tenants to set up and use. If they have an Apple device such as an iPhone or Apple Watch, they can just add a credit or debit card to the Wallet app and transfer funds. You will also need a merchant account for business banking that accepts debit and credit cards or a personal Apple Pay account for this type of payment to work. It isn’t possible for tenants to set up automated monthly payments when using Apple Pay.
Direct debit payments offer the most reliable way to get rent from tenants. Younger tenants typically prefer to rent than own, and using Automated Clearing House (ACH) debit is often their preferred choice for payment.
Direct debits can be tricky to set it up, and your tenants will need to sign and approve any direct debit payment before you can activate it. They can also be costly, but the advantage of this payment method is that you only have to set it up once, and payments are automated from then on. You have more control over payments and can rely on them coming in regularly and on time.
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