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Property Management

How To Collect Rent With Zelle Pay

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.

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How to use Zelle pay to collect rent

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 following these steps:

  1. View a full list of supported banks and credit unions. If your bank is supported you can find Zelle in your current banking app.
  2. Follow the instructions on the page to enroll and receive payments.
  3. If your bank or credit union is NOT listed, then download the Zelle app and enroll your Visa® or Mastercard® debit card.

In order 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. However, not everyone is technologically savvy, so if you are going to collect rent online give your tenants detailed instructions 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 recognise 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.

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Downsides of Using Zelle for Rent Collection

There are a few downsides to using Zelle for rent collection. This is due to the fact that it’s not designed specifically for rent collection or small businesses. As such it’s best practice to fully understand any and all potential problems that may arise.

A few issues you may come across include:

  1. If the tenant inputs your email address or phone number incorrectly it’s possible that the payment will either fail to go through or in the worst-case scenario could be sent to the wrong person.
  2. You can’t refuse to accept a payment. Meaning tenants can theoretically exploit this vulnerability to delay or derail eviction proceedings by sending partial payments.
  3. If your bank or credit union doesn’t support Zelle there is a daily spending limit of only $500. If you go over this you could have your account blocked without warning.
  4. There is no way to add and control late fees since the tenants control how much they pay.
  5. Tenants can only create recurring payments if Zelle is supported by both parties banking institutes, meaning you may need to continue to chase up tenants to avoid late rent payments.

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.

Optimising Rent Collection with Zelle and Landlord Studio

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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 a number of 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 are the 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.

*Landlord Studio is launching ACH payments for fast easy rent collection in 2020.

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Setting up Rent Reminders for Tenants on Mobile

Step 1: Open up the property/unit you wish to set tenant rent reminders for.

Step 2: Click on the pencil icon to the right (and down) of the log payment button to edit the current lease.

Step 3: Scroll down to the section labeled ‘Email Alerts’.

Step 4: Expand the Email Alerts section and set the number of days before the rent’s due, or after the rent is overdue for reminder emails to be sent out.

Setting up Tenant Rent Reminders on Desktop

Step 1. Navigate to the relevant property via the left-hand menu bar.

Step 2. Click on edit lease.

Step 3. Scroll down to the section labelled email alerts.

Step 4. Set the number of days you want an automated rent reminder email to be sent out before and after the rent is due.

Step 5. Hit save

Tenant Rent Reminder Notes

Note 1: You can edit the rent due and overdue email templates in settings.

Note 2: Our default setting is to CC landlords into all communications that go out to tenants, this can be edited in settings also.

View screenshots in our full help article for setting and managing reminders.

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Ben Luxon

"Ben is an author and real estate enthusiast. His interest in all things entrepreneurial has led him to work with real estate professionals all over the world, distilling their knowledge into articles and Ebooks. His love of travelling has taken him to over 10 countries in the last year, where he has sampled the craft beer of them all."

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