The purpose of any software is to help you optimize your processes. Using Zelle for rent collection allows landlords to do just that.
Zelle is one way landlords are making rent collection easier, more secure and faster for both themselves and their tenants. Most major banks participate in the Zelle network so if your tenant has a bank account it’s likely that they can pay easily and simply using Zelle.
In this article, we explore how to use Zelle for rent collection as well as outline some of the downsides and problems that can arise when using Zelle. Finally, because the purpose of using any software in your business is all about optimizing processes and saving time, we take a look at how you can use Landlord Studio property management software in tandem with Zelle for increased efficiency and accuracy for your rental property accounting.
* Update: You can now use Landlord Studio to collect rent online. Tenants can quickly and securely transfer the rent straight into their landlord’s bank account. It’s fast, it’s easy, and paired with other Landlord Studio features makes late rent payments a thing of the past.
To use Zelle both parties need to have enrolled in their software. There are two ways this can be done. First, and preferably for this purpose, you will want to enroll through your banking institute. If your bank doesn’t support Zelle though you can download the Zelle app.
You can enroll by following these steps:
For tenants to send rent through Zelle, they will also need to be enrolled with Zelle pay. As such it’s a good idea to stipulate this as your preferred method of rent payment in your lease. Once both parties are enrolled tenants can freely and easily send rent payments.
Online rent collection is faster, more secure, and generally easier for both landlords and tenants. Johan Hajji, who runs UpperKey, sums up nicely why online payments are generally better, “we’ve found the tenants often delayed or forgot to write a rent check on time each month, simply because of the process involved writing and mailing a check. Now, with the right software they can send payments with a few quick taps.”
However, not everyone is technologically savvy, so if you are going to collect rent online give your tenants detailed instructions on how to create their account with the relevant payment portal eg. Zelle if they’re to use Zelle, or Venmo if they’re to use Venmo.
It’s also a very good idea to recognize those individuals with certain disabilities that might hinder their ability to pay online. Elderly renters, for example, may need more assistance to be able to complete online rent payments.
Online rent collection should make it easier for everyone, it shouldn’t create new barriers for rent collection.
There are a few downsides to using Zelle for rent collection. This is because it’s not designed specifically for rent collection or small businesses. As such it’s best practice to fully understand any potential problems that may arise.
A few issues you may come across include:
Most issues when collecting rent with Zelle arise when Zelle isn’t supported by both parties’ banks. If both parties’ banks aren’t supported we suggest exploring alternative services.
As we mentioned above, with Zelle your tenants can set up recurring payments if, and only if, Zelle is offered by their bank. However, if their banking institute doesn’t offer Zelle, then they will need to connect their card to the app and remember to manually send the money through each month.
To ensure timely payments are made you can use the Landlord Studio software to create rent reminder emails to go out several days before the rent is due. These will automatically remind and then chase up your tenant should they not pay. We detail exactly how you can do this below.
One good thing about Zelle is real-time notifications. You can get notified via either email or SMS when a payment has been made. Then simply open your Landlord Studio app and reconcile the payment directly from your connected bank feed.
Looking for a better way to collect rent? You can now use Landlord Studio to collect rent online and automate your income tracking.