Cash is king, just not when it comes to collecting rent. Many problems come with accepting cash rental payments. The most obvious include the struggle to collect the payment, keeping the money safe once collected, depositing the money, and then accurate record keeping.
You can eliminate all of these potential issues by transitioning to only accepting online rent payments. This article will explain the four advantages of accepting rent payments online.
1. Avoid Snail Mail
“The check is in the mail.” This one sentence is the most dreaded statement by anyone who is owed money. There was a time when you were forced to accept it because the only other option was to collect payment in person.
Thanks to innovations in technology, we no longer have to depend on snail mail to deliver rental payments. This eliminates several problems, including delayed payments, lost payments, and potentially destroyed payments.
Mailing payments creates several barriers for the tenant. They have to have envelopes, stamps, and checks. Then they have to get the check to a post office to put it in the mail. With online payments, all of these steps are eliminated, which makes paying rent significantly faster and easier for your tenant.
2. Flexible Payment Options
The standard statement is that rent is due at the first of the month. But in today’s world, this isn’t always possible. 78% of Americans live paycheck to paycheck, which means it doesn’t matter when you say the rent is due, they won’t be able to pay until they get paid.
Managing your rental payments online allows you to accommodate your tenant’s needs. This makes you stand out as a desirable landlord, encourages a positive relationship with your tenant, and increases the demand for your properties.
With flexible payment options, a tenant can choose when and how they pay their rent. This could be choosing a specific day of the month or breaking up their payments into several smaller payments throughout the month.
Your online portal can manage each tenant’s payment schedule and alert you to when a tenant falls behind. This eliminates the time you spend managing each tenant’s account.
3. Direct Deposits
Certain forms of payments can take several days to process. This is especially true of paper checks. While you know that you’ll eventually receive your money, you don’t have direct access to use your incoming money until the bank finishes its processing.
With online payments, the funds are deposited directly into your account without any additional effort from you. Your bank gives you immediate credit for the payment, and you can transfer or spend the money as you wish.
4. Better Record Keeping
Having a dedicated online portal for accepting your rental payments means you also have an automatic digital record of your transactions. This means you no longer have to manually record the transactions.
Most online payment programs also give you reporting abilities. This is invaluable because it will help you identify tenants that are exemplary in paying their rent on time. These are desirable tenants that you want to retain long term.
You can also use these reports to better manage your properties. Integrate these reports with your property management activities. Now you can accurately determine the bottom line of your investment.
Set Up Online Rental Payments
If you don’t already have an online payment system in place, then there’s no better time than the present to get started setting one up. Once in place, you’ll benefit from more on-time payments, faster payment processing, and better record keeping.
A property manager can help you. Look for one that offers online rent collection services. This will give you a streamlined implementation process as the system is already in place.
Roland JeanCharles, LCAM, RMP Candidate, CISSP
PMI JCM Realty Group