Receiving rent payments on time is one of the most critical aspects of running a profitable rental property. However, in order to receive those payments, property owners must first decide how the rent should be paid. Rent payments can be received in a variety of ways. The ideal ones, however, are those that complement your property management style as well as your tenants’ demands and needs. To assist you in making a decision, the following information will outline what you need to know in order to select the most appropriate method of rent collecting for your situation.
Variables to Consider
Several considerations play a role in determining the optimal rent collection method for you. Consider how many tenants you will need to collect rent from each month, your distance from the rental property, and your comfort level with adding technology solutions to assist you in managing rent payments. Each of these factors can significantly assist you in narrowing your alternatives. You should also think about how often and how you want to communicate with your tenants. While frequent positive communication is advantageous for Ozark property managers, coming up each month to collect rent may convey the wrong message to your tenant.
Convenient and Well-Documented
Another critical factor to examine before selecting a method of rent collecting is if the approach fits two critical criteria: ease and the capacity to document each transaction. Today’s renters, more than ever, are looking for technological comforts to make their life easier. Consumers prefer to pay their bills online, according to a recent study. However, keeping accurate records of all rent payments and other transactions is just as crucial as ease. For a well-managed rental property, finding a payment mechanism that can provide both is crucial.
Payment Methods
Payment methods are classified into two broad categories: traditional and electronic. Traditional payment options are cash, personal check, cashier’s check, or money order, and they are exactly what you’d expect: cash, personal check, cashier’s check, or money order. While there are times when a money order or cashier’s check is appropriate, such as when paying a security deposit, accepting cash or personal checks isn’t the best option in most cases. Cash payments are difficult to track, and personal checks have a number of drawbacks, including sluggish delivery and long wait times while checks clear the bank.
Electronic payment methods, on the other hand, have expanded in number and variety in recent years. Electronic payment options such as ACH transfers and Square are available to property owners, but money can also be delivered via payment applications such as PayPal, Zelle, and Venmo (to name a few).
The majority of electronic payment methods keep track of each transaction, making paperwork simple. Some tenants, however, may be concerned about the security of sending money over the internet or choose not to utilize payment applications for monthly expenses. The most significant disadvantage for property owners is the fees; all electronic payment options have additional costs, so it’s critical to examine each one before making a final decision.
Automate and Communicate
With so many payment options, deciding how you’d like to manage rent collecting before it becomes a problem is critical. The easier the entire process is for you, the more automated the rent payment option you choose. At the same time, if you just accept one payment option, tenants may feel confined, especially if it relies on a technology they are unfamiliar with. As a result, it’s critical to communicate with your tenant and consider providing two or three payment options. This hybrid technique may be an acceptable compromise, provided that each option delivers the convenience and documentation you require. Collecting rent payments does not have to be tough, but figuring it all out on your own might be tricky. Rather than that, consider the advantages of employing a property management firm that accepts online rent payments. Give us a call at 417-220-4100 if you’re ready to hand over the day-to-day management of your rental property to the pros.
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