We explore few of the most common online rent collection systems landlords are using which of these might be right for your needs.
While of course we are concerned with our properties being looked after, as a landlord the primary concern is whether or not the rent going to come in on time every month. This is why we put together strict tenant application and tenant screening processes, and why we spend so long researching fair market rates.
Ultimately though, if you have a convoluted or out-of-date rent collection system in place it doesn’t matter how wonderful the tenant or affordable the rent, the chances of rent being paid late goes up astronomically. Traditionally, a landlord might collect rent in cash in person. However, times have changed, businesses that don’t accept digital payments are nearly extinct and if you haven’t already it’s time to update your rent collection process and start collecting rent online.
In this article, we take a look at a few of the best online rent collection systems landlords are utilizing, and explore which of these might be right for your particular needs.
When assessing potential online rent collection options you should establish a number of key things upfront.
Second, you need to consider how easy the system is for both you and your tenants to use. A more complex system might offer more functionality and save time in the long run, however, it might also provide a barrier for some less tech-savvy tenants. Again, take a look and see how much information is available and if you’re still unsure reach out to their support.
The final point is to check the speed of the transaction and overall cost are suitable for your needs.
Fast and free is obviously better. However, speed may come at an additional cost. And a free service might come with other limitations which could negatively affect your business. A good processing time is less than 5 days. However, there are numerous solutions on the market which are faster. And if speed is of the essence for you, it’s worth exploring those specific options.
Along with the basic functionality outlined above, there are several other things to look for. These are specific features designed for landlords. Features that will make it easier for tenants to pay and dramatically reduce the potential for late rent.
By removing the need for tenants to manually log in and pay their rent every month you remove the potential for them to forget or pay late. Instead, you can be guaranteed that the rent will come in at the same time every month.
Partial payments can be a problem. They can derail an eviction and ultimately cost a landlord thousands of dollars. The system you put in place then should allow the landlord to determine the amount the tenant can pay. In this way, you remove the potential for tenants to make partial payments (unless due to special circumstances this has previously been agreed upon by both parties).
Having a portal that allows tenants to view upcoming and overdue rent payments means they have clarity and records of their rent payments should they need to prove what or if they’ve paid at any time.
A good rent collection system should make sending invoices and receipts of payment as easy as possible. Having these records is good practice for both parties, and will also help ensure timely rent payments. Additionally, some platforms will actually allow you to automate this saving you even more time.
A property’s rent is the main revenue stream for landlords. For tax purposes, but also for the day to day cashflow management of one’s property portfolio, it is necessary to keep accurate and meticulous records of your income.
Having your income tracking system linked to your rent collection removes the potential for error that might occur with manual input. The right system will automate your income tracking and rent collection, which ultimately ensures on-time rent and completely removes time-consuming administrative tasks associated with income tracking.
Everyone’s needs are different. If you are looking for a simple and easy way for your tenants to transfer the rent to you then one of the above-mentioned solutions could definitely be a good option for you.
However, they each come with their own weaknesses, mainly that they aren’t designed for use by landlords. As such, there are a few potential issues that might occur such as tenants making a partial payment. On top of this, if you are self-managing your properties you will likely want a property management tool anyway to help streamline your income and expense tracking and manage routine admin and communication tasks.
As such it makes sense to look for aren’t collection tool that integrates with an income and expense tracking solution so that you can easily and accurately track your income.
There are plenty of rent collection solutions on the market, including generic money transfer apps such as Zelle, Paypal, and Venmo. However, tools designed specifically for landlords such as Landlord Studio come with tailored features to help ensure timely rent payments.
Choosing Landlord Studio over tools like Zelle or Paypal lets you combine the various smorgasbord of tools you are currently using for income and expense tracking, digitizing receipts, tenant screening, rent collection, and more into one single handy property management suite.
Ensure timely rent payments, remove time-consuming admin tasks, and improve the accuracy of your accounting with Landlord Studio.