As a landlord, the financial stability of your rental business relies on timely rent payments from your tenants. That’s why it’s important to have a reliable way to collect rent payments online to ensure tenants pay on time and minimize the risk of delayed (or missing) payments. If you’re not sure what the best way to collect rent as a landlord is, we’ve outlined the different options available so you can choose the ideal software for your rental business to ensure consistent, punctual payments.
Different ways you can collect rent
Determining which rent collection method is right for you depends on various factors including the size and location of your rental properties, tenant preferences, and your financial situation.
In-person rent collection
Best for: Landlords who manage small-scale properties and who have strong personal relationships with tenants.
When you only manage a handful of tenants, cash or check payments is a practical method for collecting rent payments. It allows for face-to-face interaction and gives you the opportunity to build a solid tenant-landlord relationship.
Although collecting rent in person can be physically demanding, a monthly visit is a good excuse to check in on the status of your tenant’s unit. That said, your schedule may not always sync up with your tenant’s and they may not even be home when it’s convenient for you.
If you don’t live on the premises, you may need to make more than one trip. If you do pursue in-person rent collection, make sure you have a reliable system in place so you can maintain accurate records of transactions. Doing so will safeguard both you and your tenant in case of any discrepancies or disputes regarding rent payments.
Physical checks in the mail
Best for: Landlords whose tenants prefer or are accustomed to submitting rent through traditional mail.
If you’re not strapped for cash, waiting for rent checks to arrive in the mail might not be a huge inconvenience for you. For some landlords who cater to the elderly or those who lack the technological tools to do so, this method of collecting rent is easier than introducing unfamiliar electronic payment methods.
On the flip side, if check is the only payment option you offer you risk excluding other demographics such as young professionals or college students. They may not even own a checkbook or know how to properly write a check.
While checks are still popular, they do have a few major drawbacks: they can bounce, get lost, stolen, or be delayed in the mail. You also have to physically go to a bank to deposit them. For landlords who find a physical paper trail to be reassuring, this payment method might be preferred.
Peer-to-peer payment services
Best for: Landlords who manage remote properties, have tech-savvy tenants, or need funds quickly.
The ease and speed of peer-to-peer (P2P) payment service transactions make collecting rent a hassle-free experience. Mobile payment apps like Venmo, PayPal, Zelle, or Cash App allow landlords to collect rent quickly and simultaneously encourage tenants to pay on time. P2P payment services eliminate the need for physical exchanges of money, reducing the risk of lost or stolen payments. With access to a digital record of transactions, these services also add an extra layer of transparency and accountability to the rent collection process.
For these transactions to take place though, both you and your tenant need to have the specified app of choice. Be aware that some platforms may charge fees for processing payments. While these fees are typically modest, they can add up over time and can impact your overall revenue. And some services enforce a daily spending limit which means your bank can potentially block your tenant’s account if they transfer too much at once. Another disadvantage is that not every app will allow tenants to set up automated payments, putting the burden on you to remind your renters every month.
Online rent payment platforms or ACH transfer
Best For: Landlords who want a comprehensive digital solution for rent collection, lease management, and tenant communication, especially if they’re overseeing multiple properties.
When landlords collect rent through online rent payment platforms or by ACH transfer, the process is efficient and convenient. These online payment platforms also often offer additional features like lease management, maintenance requests, and communication tools. And if you manage more than one property, you’ll appreciate how much these tools will reduce your administrative burden, save you time, and improve overall operational efficiency.
If you want to automate how you collect rent payments online and decrease the risk of missed or late payments, online rent payment platforms or ACH transfers are a sensible choice. Tenants can set up recurring payments, so that they don’t have to worry about paying on time each month and you get to collect rent with peace of mind.
Because these rent collection options generate electronic receipts, it’s easy to verify transactions and resolve any payment-related disputes. All financial data is secure and stored in a centralized place for easy access, which is especially helpful if you manage a large number of tenants. And the silver lining to it all is that they aren’t expensive. The small transaction fees associated with each payment usually come out of your tenant’s pocket, not yours.
Best for: Landlords who depend on immediate availability of funds, who manage international tenants or where local regulations require this specific form of payment.
For landlords who need to cover expenses promptly, access to funds that are immediately available and verified (otherwise known as “good funds”) is critical. Asking tenants to pay rent by money order on a monthly basis guarantees that you will receive your payment right away, reducing the risk of delays or insufficient funds that can occur with other payment methods.
If you want to expand your tenant base and offer rentals to international tenants, collecting rent using this method enables you to accommodate renters that may not have a U.S. bank account. Although money orders are a dependable form of payment, it does put some strain on your tenants who have to purchase one every month.
Additionally, depending on where your property is located, local laws may require you to only collect rent using money orders. If that’s the case, it's important to familiarize yourself with the specific regulations in your area and ensure that you comply with them to avoid any legal repercussions.
Credit or debit card payment
Best for: Landlords who want to offer flexibility to tenants or manage properties with tenants who may not have access to traditional banking services.
If you don’t mind the typical processing fees that come along with credit or debit card payments, then it’s worth considering this method for rent collection. Landlords who accept card payments may attract a wider range of tenants, including those who prefer electronic payment methods or do not have access to traditional banking services. However, If you’re willing to give tenants the option to pay this way, be sure to choose a reputable and secure payment processor and also implement strong security measures. The last thing you want is to deal with rent payment fraud.
Why you should opt for an online rent payment platform to collect rent
Online rent payment platforms are gaining popularity, quickly outpacing older methods of rent collection. The benefits of using these platforms are clear for both you as a landlord and your tenants.
With RentSpree Rent Payment, you can streamline how you collect rent payments online and even help your tenants build their credit with every on-time payment. From secure online transactions to easy record-keeping and reporting, RentSpree is designed to make managing your rental properties a seamless and secure experience.
Say goodbye to the hassle of traditional rent collection methods and create an account with RentSpree now.