You probably have a love/hate relationship with collecting the rent from your tenants each month.
You love getting paid for your work as a landlord who provides a safe living environment for your tenants. However, you probably hate actually collecting and logging checks, electronic payments, and tracking down tenants who haven't paid on time.
How can you make it easier to collect the rent from tenants in your Novi property? What payment options should you consider for tenants?
Here’s a quick look at several payment options and how you can incorporate them into your rent collection system to this task easier on yourself.
You probably don't see many people writing checks at the grocery store.
The paper check was once a popular and convenient way to pay for just about anything. It was better than carrying lots of cash when running errands.
Although debit cards have taken over most point-of-sale transactions, paying by check is still a common way to pay bills.
The upside of accepting a check is that they create an instant record for easy accounting when they clear. The most significant downside of this payment method is the bounced check.
When a check bounces, it creates a hassle for you. As the landlord, you have to track down the tenant, let them know their check didn't clear, and request a cashier's check for that month's rent.
If you have multiple tenants who pay by check, you're spending a lot of time collecting paper, processing deposits, and running down late checks or checks with insufficient funds.
When accepting checks, make sure you have a strict policy in place. Checks must be in your hand by a specific deadline each month. Bounced checks result in additional fees.
By Mail, Drop-off, or In Person
When you allow checks (or cash), you need a process to collect checks from tenants every month.
Some landlords set up a mailbox specifically for collecting rent checks. They can mail their check each month--making sure the check arrives at the mailbox on time. You choose a specific day each month to collect the mailed checks from the mailbox.
Other landlords prefer collecting rent in person. This can be a time-consuming process. However, if you only have one Novi property or just a few properties, this could be feasible.
You might enjoy checking in with your tenants each month when collecting the rent. While you're there, take a quick look at your property to make sure there aren't any repair or maintenance issues.
Tenants can also drop off their rent checks at your office each month. Set up a designated place for after-hours drop-offs in case you aren't there.
Beware of accepting cash. Make sure you create a receipt for your tenants to verify that they paid the rent that month. A receipt also protects you from a tenant who claims they already paid when they didn't.
With more banking apps emerging to make banking easier, some tenants might prefer to pay using an app. You might be most likely to see this preference from your Millennial tenants.
PayPal, Venmo, or other bank and payment apps are a secure way to send money for paying bills--including rent.
Set up a PayPal account to accept rent payments from tenants. They'll be responsible for reminders to pay their rent each month. You'll also need to log their payment and send a receipt to confirm the amount.
However, when considering apps versus paper checks, payment apps are the more convenient and secure option.
Electronic Payments Provide the Most Convenience
Using an online system is the best-recommended method for accepting rent payments. With an electronic system, your tenants can log in and pay their rent instantly each month.
Online portals allow tenants to use a credit or debit card. Many current systems collect the payment, send a confirmation, and log the payment into your accounting tools.
This process saves you the time and hassle of manually collecting rent checks, logging the payments, and sending the receipts. You can also set up an online payment system to make automatic deposits to your business bank account after you collect rent payments each month.
Take the Easiest Way Out
You want to provide a convenient process for your tenants. As a landlord with a lot of day-to-day tasks, you also need to make the rent collection process easy on yourself.
The easiest way to collect rent is to let a professional property management company collect the rent for your Novi property. Take the task of collecting, processing, and depositing the rent off of your to-do list.
JMZ Property Management knows how to collect the rent! We handle everything from collecting to logging payments to making sure you get paid. When you work with us, you never have to chase down a late payment or assess late fees.
We do it all! Get started with a FREE Rental Property Analysis to know how much rent you should collect for your properties. We'll handle the rest. We offer a Guaranteed Rent in 59 days or less, or the leasing fee is on us. Click the link below to learn more!