Rent collection is incredibly important to the success of your property management business. Landlords are forced to juggle a lot of different things at once, and there isn’t room for a rent collection process that makes your life difficult.
Because it is such an important part of your business, it is natural to wonder what the best way to collect rent is. As a landlord, you should look for a method that is reliable, easy, and accessible both for you and your tenants. The best method should ensure timely rent payments and keep missed payments and late fees to a minimum.
For this reason, online rent payments are the best way to collect rent both for you and your tenants. Like many parts of the real estate business, rent collection has shifted online, and its numerous benefits have helped landlords tremendously. This article will cover what online rent collection looks like and why it is the best way to collect rent.
What is Online Rent Collection?
In the 21st century, a lot of business operations have moved onto the internet and have been streamlined as a result. Rent collection is no exception. A number of digital platforms exist that allow you and your tenants to do a lot of your regular business online.
Property management software contains features that are designed specifically for the needs of the real estate business, allowing you to set up regular rent payments and collect late fees.
Peer-to-peer platforms like Venmo and PayPal can also be used to set up rent payments, but they lack some of the industry-specific features of property management software like the ability to collect late fees. They can also lead to a number of legal issues, so it is advisable to avoid these platforms in favor of more reliable methods.
The Advantages of Collecting Rent Online
Automatic Payments
The biggest advantage to making the switch to online rent collection is the ability for your tenants to set up their monthly rent payment as an automatic withdrawal. This process allows for a hands-off approach in which the tenants no longer have to worry about forgetting to pay their rent on time or about paying the wrong amount. This means that you won’t have to worry as much about the hassle of late fees or missing payments.
Flexible Payment
Another way that online rent collection minimizes missing or late payments is by allowing tenants to pay their rent from anywhere. Rather than having to deliver a check, using property management or peer-to-peer software means that a tenant can pay their rent from anywhere with a stable internet connection. There is no need for you or your tenant to be physically present in order to make the transaction, meaning that last-minute payments can come through easily.
Automatic Record Collection
Whenever your tenant makes a rent payment online, the software automatically records information about the transaction. It is necessary to keep records of your tenants’ payments, but manual bookkeeping can be tedious and uses up resources that you could invest elsewhere. Additionally, automatic records are not susceptible to human error that might come from a ton of manual bookkeeping.
Increased Transparency
Improved transparency and clarity about the rent collection process is a natural benefit of automatic record collection. The online process is much more responsive for a tenant than traditional offline methods: Tenants will receive invoices of outstanding bills, receipts after they make a payment, and notifications if rent is overdue.
Since you are in business with your tenants, transparency can be an important part of building trust. The responsiveness of automatic records is an effective foundation for trust and can lead to a happier tenant who chooses to stay in your property longer.
Conclusion
The trend toward online rent collection is happening for a number of reasons that benefit both landlords and tenants. Simplifying the process and eliminating manual workload gives you more time to focus on other priorities of your business, making the switch to online one that cannot be made too soon.
