8 Rent Payment Options for Tenants
As a landlord or rental agent, you need to ensure that the rent is not only paid but paid on time. How can you ensure on-time payments while offering value-added options for your tenants? Here you’ll find eight different collection solutions so that you can facilitate prompt rent payments and communicate your tenants’ options for how to pay rent.
For many landlords, the day that rent is due offers both exciting and frustrating outcomes. Roughly 20% of renters in America are behind on their payments, according to CNBC. As a result, landlords scramble to determine which tenants are not paying on time. By offering renters a variety of options on how to pay rent, including online, ensures satisfied tenants and a straightforward rent collection process.
How To Pay Rent Online
Rather than coordinating tenant banking information, tenants are responsible for putting in their information and paying on time online, unlike other payment methods. An integrated online portal for rent payments, like RentSpree, offers you this flexibility.
RentSpree provides options that allow you to send reminders, late fees, and automate your online rent collection. Adding services like online rent payment shows your tenants that you value their time and peace of mind, which is crucial for building relationships and increasing retention.
Other Options for Your Tenants To Pay Rent
Implementing easy and efficient ways for tenants to pay their rent helps to ensure prompt on-time payments. In addition, as the landlord, it streamlines your bookkeeping and record-keeping and improves your monthly cash flow.
Here are the standard options you can provide for rent collection:
- In-person payments: This is a common practice for landlords who live or maintain an office near their rental properties. In-person payments are typically required during specific office hours or a secure dropbox where tenants leave their payments. As the sole rent collection method, this is difficult to maintain both for the tenant and the landlord. It is incredibly inconvenient during the holidays or when tenants are traveling and are not in town when rent is due.
- Mailed-in checks or money orders: Mailing in a check or money order, either through tenants bank's Bill Pay service or a physical check. This method can lead to frustration and late payments if the weather, holidays, or other factors affect post office hours and mail delivery. The biggest challenge is determining if tenants paid their rent on time or at all when there is variability in delivery timing.
- ACH electronic transfers: ACH (Automatic Clearing House) payments are sometimes available through your bank. Landlords will need to coordinate set-up and opt-in with your tenants from their bank account. This process requires you to gather the needed information and update it as necessary. While ACH transactions offer added convenience, it can become unwieldy to keep track of accurate banking information for all of your tenants. In addition, you may incur expensive charges, depending on your bank's fee structure.
- Zelle: - Zelle is a relatively common method of transferring funds from one bank's user to another. Although, among the significant drawbacks, Zelle is frequently unavailable for business accounts and sometimes personal accounts. This lack of availability means Zelle may work for some of your tenants, but you cannot receive payments directly to your business account. Ultimately this payment method significantly affects your bookkeeping.
- Venmo: Venmo is a popular payment app that many people use to transfer payments to each other. While it is an easy and convenient way to pay your friend back for yesterday's latte, it doesn't work as well for rent payments. Venmo offers no protection against errors, so if the tenant uses the wrong Venmo address, they are unable to get that money back. As well, Venmo charges a transaction fee for business accounts which can cut into your bottom line.
- Apple or Google Pay: Apple and Google Pay provide another way for renters to pay rent online. These platforms are convenient for some tenants who use Apple and Google services. However, it is difficult to get other tenants up to speed with either of these options, especially if they are not familiar with the interface. Additionally, to use Apple Pay, you will need to use an Apple device to accept payments, leading to frustration if you outsource your rent collection records and bookkeeping.
- Electronic invoice: Electronic invoice platforms like PayPal, Square, and Stripe offer a way for you to provide reminders to your tenants and keep better track of when they make payments. A major drawback to many of these services is the transaction fees, which can add up significantly. Invoice platforms experience delays of one to three business days or even more when transferring collected payments to your bank account—creating problems for both your bookkeeping and cash flow.
RentSpree is committed to making your experience as easy and efficient as possible. Our online rent collection tool is a great way to integrate all your important tasks and streamline every step of the rental process on a single platform.
