As a landlord, one of the biggest stressors is collecting rent. Even if it typically gets paid on time, you’re still left with a little anxiety at the beginning of each month. The reality is that it’s just not efficient to collect rent through the mail or in person. If you want to make the process as safe and painless as possible, you need to consider online rental payments.
How Online Rent Collection Works
Is there anything that the internet hasn’t changed? Whereas landlords once had to wait on checks to arrive in the mail each month, it’s now possible to electronically send and receive payments in a matter of seconds.
Online rent collection is actually really simple. Think of it like any traditional online bill payment system that you would use to pay your mortgage, car loan, or cable bill. Rent payment platforms draft money from the tenant’s bank each month and transfer it to your account. It’s quick to set up, can be automated, and requires very little setup for either party.
If you handle all of your landlord duties on your own, you’ll have to find a stand alone rent collection solution. There are a handful of good choices available, with both free and paid options. Many landlords swear by Cozy, a free platform, but there are plenty of other choices, including Appfolio, Buildium, and Rentec Direct.
If you work with a property management company, there’s a good chance they have an online rent collection option in their package. (Hint: At Green Residential, we do.) Either way – whether you’re on your own or you use a property management company – it’s a good idea to leverage an online rent collection solution.
Why You Need to Collect Online Rental Payments
As you can likely deduce from how rent collection solutions work, automatically collecting rent online is extremely valuable. Just how valuable, though? Here are a few of the top benefits you’ll enjoy after transitioning from manual collection to online collection:
Every landlord wants to get paid on time every month, yet few actually do. This doesn’t always mean you have terrible tenants in your properties. Sometimes it’s just the nature of manual rent collection. For local landlords, it can take a day or two to collect rent checks through the mail. For out of town landlords, that time frame may extend to three, four, or even five days.
When you use an online rent collection solution, there’s no delay. The rent arrives in your bank account within seconds of leaving the tenant’s account. How’s that for getting paid on time every month?
Late rent excuses are extremely common. In fact, it’s incredible how many different and unique excuses a single tenant can come up with. Have you heard any of the following?
• “I sent my check last week. The post office must have lost it.”
• “My daughter just had a baby and I had to help her out.”
• “I’m still waiting on my check from the government, it must have gotten lost.”
• “My kids just started school, I’ll have the money next month.”
• “Sorry, the first of the month was on a Sunday.”
• “The weather was bad, so I didn’t want to drive over and drop off the check.”
• “We decided we’re going to move out and figured we didn’t have to pay this month.”
While some of these are humorous, the reality is that late rent payments are never funny. And honestly, handling late rent excuses time after time gets pretty old after a while. That’s why online rent collection is such a beautiful thing. It removes any opportunity for a tenant to come up with an excuse. Rent is automatically drafted each month and if you don’t get paid, you know it’s because there’s no money in their account.
3. More Convenient for Everyone
Online rent payments aren’t just more convenient for you, they’re also easier on your tenants. They don’t have to remember to write a check, buy stamps, and place the envelope in the mailbox every month. Or, if they typically drop off their check in person, they don’t have to spend time driving to your home or office.
From your end, you don’t have to wait for the check to arrive and then deal with cashing it. The payment simply shows up in your account every month without any effort on your part. It’s simple, convenient, and streamlined.
4. Safer and More Secure
Collecting rent through the mail isn’t the safest strategy. Checks can get lost, stolen, or misplaced. However, when you collect rent via an online payment solution, the money is directly transferred from the tenant’s account to yours. This direct deposit nature of the system means there’s much less risk associated with collecting payments.
5. More Consistency
If you have tenants who pay on the same day every month, you’re lucky. Most landlords have to deal with inconsistent rent collection. One tenant may deposit their check on the 30th of every month, another on the first, and another on the third. When you’re collecting rent, this makes bookkeeping a little more challenging. Things can get messy and disorganized – especially if someone doesn’t pay at all.
When you collect rent online, you can standardize collection. For example, you can set up all payments to process at 10am on the first of the month. This simplifies your accounting process and lets the tenant know exactly when their rent will be debited.
Green Residential Professional Property Management
Being a landlord comes with a lot of responsibilities. The more of these tasks you can delegate or remove from your plate, the better. At Green Residential, we understand this. That’s why we offer extensive property management solutions for Houston landlords that don’t have the time to deal with all of the time-consuming tasks that come along with owning and managing rental properties.
If you’re in need of a property management team that can handle rent collection, tenant screening, property marketing, and everything in between, let us know! We’re the premier property management company in the area and would love the opportunity to welcome you into the Green Residential family.