Collecting rent is one of the principal roles of a landlord. However, traditional rent collection processes are inefficient, insecure, and a hassle for both the landlord and the tenant. Landlords need to collect multiple different checks or cash payments from each of their tenants and accurately track their income. And, with multiple tenants across numerous properties, this can become increasingly complicated. To top it off there may be scenarios where cash or checks are misplaced, get lost in the mail, or could even be stolen.
These are just a few of the reasons why landlords are making the switch to online rent payments solutions. But how can you increase adoption, and improve the efficiency of your online rent collection?
What Are The Advantages Of Online Rent Collection?
Online rent collecting has several major advantages over traditional strategies like checks and cash. These advantages range from the convenience of use to faster processing times. Below are the most significant of these advantages:
Reduced Late Payments
With an online payment system like Landlord Studio, tenants can set up recurring payments. This means the tenant doesn’t need to remember each month and will never forget to pay the rent on time again. This helps landlords avoid cash flow issues reduces friction pints between landlords and tenants and helps tenants avoid late fees and penalties.
Online Payments Are Safer
Despite the various concerns around hackers, internet banking, online payments are safer than if you pay with cash or checks. Additionally, all payments are protected from scams and financial fraud by the payment provider as well. You compare this to cash or cheques which can easily get lost or stolen and where there’s no paper trail to retrieve the funds
Transparency And Accountability
When a renter pays the rent online there is a clear record of the payment. This record can be viewed and accessed by both the landlord and the tenant. Additionally, landlords can see when a payment has been initiated, and when a payment has been completed. There’ll be no more situations where the check is lost in the mail.
By clearing up any ambiguity and simplifying the interactions around rent collection you remove the possibility for human mistakes and this will go a long way to improving the relationship between landlord and tenant resulting in an increased likelihood of on-time payments.
5 Ways To Increase Adoption Of Online Rent Collection
1. Motivate Renters To Sign Up
Specifying how you will be collecting rent before your tenant moves in is a good way to encourage the adoption of an online rent collection system. You may even choose to include a clause in your lease before your tenant moves in to make sure they are aware of how you expect them to pay. And you could offer a reward for those that get set up in a timely fashion.
If they have any questions or need any help getting set up or using new technology, direct them to the software’s help services or even guide them yourself. This should be part of your move-in process.
2. State Your Preferred Payment Process In Your Lease Agreement
To encourage the adoption of modern processes like online rent collection by your tenants you need to be very clear in your communications with them. You may even want to stipulate in your lease document that online payments are required throughout the lease duration. However, remember to consult a licensed legal professional as different states have different laws regarding this.
3. Use A User-friendly Rent Collection Application
Rent collection software benefits both landlords and tenants. It allows tenants to easily initiate payments online from their phone or desktop computer, create recurring payments, and view historical and upcoming payments.
On the landlord’s side, a fast and trustworthy solution and can automate more than just the rent collection. For example with Landlord Studio, payments made through their rent collection system are automatically tracked in their financial tracking tool against the relevant property. Additionally, you can automate rent reminders, so that if a tenant is late you don’t have to manually chase them up.
4. Inform Your Renters About The Significant Advantages Of Online Rent Collection
There may be some pushback when requesting a tenant to pay using a particular platform. You can overcome this barrier by explaining the various advantages that online rent payments have. A few of these examples include:
- It’s easier for them. They simply need to log into their account online.
- It’s more secure. There is no chance of their payments getting lost and payments are protected by the payments provider.
- There is a clear record of all of the payments that have been made for future reference should any disputes arise.
5. Provide Options For Payment Methods
Ideally, you want your tenants to pay using your preferred platform. However, this may not always be possible, and some tenants may be uncomfortable using new systems. You can overcome this barrier by providing education and an alternative should they request one.
Online rent payments make the process easier for everyone. Enabling renters to pay rent digitally will save them time, reduce stress and reduce stresses related to late rent payments.
Landlords should choose a high-quality rent collection tool that integrates with their financial tracking software. Landlords studio is just one example. Offering a suite of property management tools including income and expense tracking designed for landlords’ rent collection, lease management, tenant communication, and even rental listings and tenant screening.
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