rent collecting methods

Rent Collecting: The Best Ways to Collect Rent from Tenants

One of the driving factors of becoming a property owner is earning money from it. Having an exemplary rent collection system is one of the main ways of maximizing rental income and saving time.

It is therefore, important as a property owner to establish the best ways to collect rent.

This insight is principally applicable in light of efficiently tracking the payments made by tenants and making rent day easy for yourself and the tenants.

This will ensure you get paid on time and avert any potential confusion. In this regard, here are the best ways to collect rent from tenants.

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Online Payment Options

There are technological innovations being made in various sectors. Rent collection has not been left out. There is a good probability that in the future, rent collection will all be done online. Some of the online digital payment methods include:

#1: Venmo

Venmo is a modern, user-friendly system that makes rent payments effortless for tenants. This payment method requires both the landlord and the tenant to create an online account or download the Venmo app to facilitate funds transfer.

Once payment is made, transactions will show up instantly in your account. The amount will then take 1-2 days to process when you withdraw it from Venmo to your bank account you’ve linked on your Venmo App. The money will then reflect in your account.

Venmo charges a 3% transaction fee for businesses so sign up as an individual user to get the free transactions. There is also a fee if you want instant same day deposit to your bank account when withdrawing. If you wait the 1-2 days for normal withdrawal, then it is free to withdraw the funds from Venmo.

#2 Zelle

Zelle allows you to send money between bank accounts without charging a transaction fee. It only requires an email or a cell phone number. It is advisable that both the landlord and the tenant have bank accounts that support Zelle.

Since it is integrated with most major banks, Zelle transactions are instant and deposit money straight into your bank account.

#3: PayPal

This is among the pioneers in the online payment field. Both the landlord and the tenant must set up PayPal accounts to facilitate the transfer of funds. Users have the option of paying with a credit card, debit card or using a bank account.

PayPal charges a fee of 2.9%+ $0.30 for each rent payment. Payments take from thirty minutes or up to one business day to process.

#4: ACH Deposit

ACH stands for Automated Clearing House. This is one of the most secure, convenient and reliable rent collection methods. ACH Deposit needs a one-time set up for your tenants.

The tenants are required to authorize bank account details and sign or approve a mandate to activate it. After initializing a payment, there is a 3-day delay duration before it is received.

There is also a provision for automatic recurring payments.

#5: Apple Pay

This option is only available for Apple customers. US customers only require a debit card. Apply Pay facilitates rent payment from within the Messages app.

You connect up your debit card, and then you make payment to your contact inside the Message app.

In-Person Cash

The landlord may choose to go door to door to collect rent. This rent collection method ensures a hands-on experience. The property owner can monitor their property every month to make sure it is well maintained during these rent collection visits.

You will have the payment in your hands immediately. It is advisable to give a receipt of the transaction once payment is received.

Checks

There are several checks you can accept as a property owner.

#1: Personal checks

This is received directly from your tenant’s bank account. The tenant can include other bills due to the landlord in the check and pay with the rent.

After receiving the check, the landlord deposits it. The tenant needs to have those funds in their account to avoid the check being given back for insufficient funds.

#2: Cashier’s Check

This is where a bank draws a check on the bank’s account. Cashier’s check comes with a guarantee from the bank of available funds in the tenant’s account. This approach requires that the tenant makes a check payable to the bank or pays cash.

The bank then draws a check in their name. This implies that the bank’s name appears at the bottom of the check instead of your own. Cashier’s checks come with a carbon copy when printed, making record keeping simple.

There is usually no transaction charge for the cashier’s check.

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Property management Company

This rent collection method is applicable where you hire company managing your property. They collect rent, screen applicants, handle maintenance, deal with tenants’ complaints and do evictions when needed.

The management company keep records and avails them when required. You will get into a contract with the company and pay an agreed-upon amount based on the services you need.

Drop off location

The landlord may choose to allow tenants to drop off rent at a specific location. An office away from your house would be the most appropriate drop-off location.

Overall, as you set up policies for rent collection, it is good to check your local and state laws. This will ensure you are aware of regulations around rent collection.

It is also good to be knowledgeable in rent collection methods and choose what works for you.

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