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The Best Way to Collect Rent Payments from Your Tenants

Collecting rent is a pretty vital part of running a rental – but it will perhaps (or perhaps not) surprise you that not everyone has this process nailed. Tenants are sometimes difficult – maybe they work in a restaurant and live off cash tips. Or they just don’t like the idea of online banking. Perhaps they’re older and don’t like, or are unable to do things differently and so insist on sending cheques in the mail.

In today’s modern age of technology and digital payments there really is no reason for a landlord to be collecting cash payments or accepting cheques. These are outdated – slow and insecure forms of payment that just make everyone’s life harder.

So, I guess that’s our first point. Let’s get digital. Treat your business like a business, and make rent day easy for yourself and your tenants.

At Landlord Studio we are constantly evolving new features like our recent release of bank feeds which allows users to easily connect their bank accounts and reconcile income and expenses within the app.

We are currently working on further automation features. And are currently scoping the work required to create a feature for collecting rent payments through the app. This though is still a few months of development we are aiming to release October 2020.

In the meantime, we’ve written an article to help you nail your rent collection process!

Learn More about our Online Rent Collection

How Should You Collect Rent Payments?

In places like the UK, Europe, Australia or New Zealand, the answer is simple. Bank to bank transfers. Preferably have your tenants set up a direct deposit using their online banking. This is free in the above countries mentioned.

In the US though this can be expensive with a bank transfer costing up to $30 each time and a direct deposit costing upwards of $50 to set up, often with ongoing monthly fees.

Never fear though! There are a plethora of work-arounds available for the savvy landlord.

Here Are Some Methods for Collecting Rent in The Us:

zelle pay rent collection

1. Zelle Pay

With Zelle pay you can send and collect rent payments instantly through your banking app, or the Zelle app if your bank doesn’t support Zelle Pay yet. The transfers are free and only require you to know a US mobile number or email address (as long as the other person already has Zelle).

You can use Zelle with multiple accounts at multiple banks, but, and this is a big but, you must have a different email address or U.S. mobile number linked to each account to connect it with Zelle. If you try to use the same email address or mobile phone number to enroll with Zelle at multiple banks, you will receive an error message.


  • Instant.
  • Free.
  • Easy in-app or online with certain banks.
  • Just need their phone number or email address.
  • Payments go straight into your bank account.
  • Set recurring payments through your online banking.


  • You can only set recurring payments using Zelle if it’s supported by your online banking.
  • Both parties need a Zelle account.
  • You need a different email address or phone number for each bank account connected to Zelle.
  • If your bank or credit union doesn’t yet support Zelle there is a daily spending limit of $500. Going over this limits could mean having your account blocked without warning.

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 using alternative service.

venmo logo

2. Venmo

Venmo allows you to send and recieve money quickly and easily through their app to people on your contact list. You can quickly connect to people through social media, or, like Zelle, you can use their email or phone number if they already have a Venmo account. Although it’s not designed for colleting rent you certainly could use it that way.


  • Quick.
  • Easy in-app process.
  • Free to send money “to friends”.


  • Both parties need a Venmo account.
  • Can’t set up automated payments.
  • Money goes to your Venmo account instead of straight to your bank.
  • Records may not be accepted in court.
  • Business purchase support entails is a 3% fee
How to Collect Rent

3. Paypal

Paypal has been around for a while now. They revolutionised online payments, and it’s taken a while for other companies to catch up. Many people have a Paypal account already. Paypal allows you to quickly, easily and securely send money to someone else’s Paypal account through their app or online.


  • Fast.
  • Easy to send money online or via the app.
  • Free.
  • Just need an email address.


  • Both parties need a Paypal account.
  • Paid into the Paypal account not direct to your bank.
  • Can’t set up automated payments.
  • Paypal more often than not side with the customer (in this case Tenant) if issues arise. 
  • There are applicable account limitations, non-compliance could result in account funds being frozen.

4. Apple Pay

Apple are making some interesting moves in the payment sphere and now allow US customers to pay each other inside iMessage. You simply connect up your debit card and then you can pay your contact inside the Message app.

They have also released Apple Card – a credit card with zero fees which is well worth knowing about.


  • Easy, just need their phone number.
  • A lot of people already use Apple Messages.
  • No fees.
  • Connected to your bank account.
  • Instant.


  • You both need to have Apple products and be using iMessges.
  • You can’t set up automated payments.

Other Methods to Collect Rent 

The following methods have associated fees, but are also worth considering.

Related: How Facebook’s “Project Libra” is Going to Revolutionize the Rental Industry

Collecting rent

5. ACH – Direct Debit

Direct Debit payments are the most reliable and secure way to collect rent from your tenants, but it can be tricky to set-up a Direct Debit yourself. Any Direct Debit payment will require a mandate signed or approved by the tenant before it can be activated, and organising this yourself will be difficult. 


  • Automated – one time set-up – save time.
  • Less chance of them missing a rent payment.
  • Landlord is in control.
  • Reliable.


  • Fees – see your banks terms and conditions.
  • Have to work with your tenant to get it set up, requiring a signed mandate.

6. Standing Order

A Standing Order, otherwise known as ‘The Standing Order Mandate’, is a set of instructions given to a bank or building society which tell them to make payments for a fixed amount on a regular basis to a specific bank account. 

In the case of rent payments, a Standing Order will be set-up by the tenant to send the rent amount to the landlord’s bank account on the due date each month. Once a Standing Order is set-up, it can run indefinitely until it is cancelled.


  • One time setup.
  • Automated.
  • Reliable.


  • Potential Fees dependent on the bank.
  • Tenant is in control.
  • No notifications if the payment doesn’t go through. So, you have to manually check.

7. Credit Card

This is more of a last resort but for those times when your tenant is having a “tough month”, allowing credit card payments can help everyone stay on top of the rent payments. Using a credit card will incur processing fees (which will need to be charged to the tenant) as well as involve the tenant risking their credit score if they are unable to pay off that credit card debt for the next month.

You will need to use a 3rd party to enable this such as Plastiq which has a 2.5% fee, or Venmo which has a 3% fee.

There is another downside to allowing them to use a credit card to pay rent which is the time taken for the money to go through to your account which could be days, weeks or even months.

How to collect rent

Up Front Policies to Collect Rent Payments Online

Collecting rent online is the fastest and most efficient way in which to collect your rent payments. However, in the US it’s not been made simple by the glacial slow adoption of banks to enable efficient bank transfers means you have to use a work around. 

If you are going to collect rent online you should make sure your tenants are aware of this and have this detailed in your lease. On top of this make sure you detail how you expect the rent to be paid with detailed instructions of how to get set up so that the tenant has no excuse to pay late.

Expectations in Your Lease

The terms of your lease should include:

  • Rent: How much a tenant is paying and when payments are due.
  • Payment methods: What forms of payment are accepted, where and how tenants can pay online.
  • Late payment consequences: What late fees will be charged and whether you will report late payments to credit agencies.

Recognize Ability of Tenants to Make Online Rent Payments

Make sure you 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.

You policies should be firm, but be sure to make it easy for everyone to be able to pay – offering assistance if neeed.

Download our Free Lease Agreement

Some Suggestions for Helping These Individuals Set up Their Online Rent Payments Include:

  • Create step-by-step instructions: This only needs to be created once and then given out to tenants when they each move in. It should be a clear and concise step by step guide to paying rent the way that you expect them to pay rent. Leave no room for error on their part.
  • Available assistance: Make sure your tenant has the companies customer assistance details handy. For example, if you want them to use Zelle, include their customer help line phone number and website address so that they can ask questions.
  • An introductory email: Email them the companies set-up guide, with videos if possible. Each of these companies has extensive resources to help their customers use their product.
  • Accommodate protected tenants: If you have a tenant that is disabled or elderly, see that they have a family member responsible for the payments. Be sure to contact them to help them set up their payment system and establish your expectations clearly.
Are there any payment methods we’ve missed? Or do you have a preferred method? Let us know in the comment section below.
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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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