There are lots of little details to sort out when you start investing in rental properties. One that deserves a close look is how you accept rent payments from your tenants. In fact, even if you’ve had investment properties for years or decades, you might not have looked at this issue in a long time, and are simply collecting checks every month out of habit. But there are a number of compelling reasons landlords should accept online rent payments.
Allowing your renters to pay you through an online system has many advantages. It’s become increasingly desirable in recent years, and not just to property owners; tenants appreciate this option, too. So, it’s a win-win. Let’s take a quick look at some of the primary reasons landlords should accept online rent payments.
Benefits of Taking Online Rent Payments
- It increases on-time rent payments. This is undoubtedly one of the main benefits of online payments. Tenants can schedule automatic payments, and many happily take advantage of this option for simplicity’s sake and to avoid forgotten payments and the resulting late fees. Also, most online rent collection tools allow you to send automated payment-due reminders shortly before rent is to be paid.
- It simplifies deposits. Online rent payments go straight from your renters’ bank accounts into your bank account. This is easier than receiving checks and having to deposit them at the bank or scan and deposit them on your phone. And, of course, the more tenants you have, the more advantageous this is. You also get your money faster this way.
- It simplifies payment records. When using an online rent collection tool, you’ll have instant notifications of payments received and an easy way to track outstanding payments. Also, many of today’s tools connect to your other record-keeping or accounting software for further convenience. These features make it easier to treat your investment property income like a business; failing to do so is one of the common mistakes that landlords make.
- It allows your tenants multiple ways to pay. Renters appreciate payment options. Most online rent collection software and apps allow for various types of payments (at varying processing fees), such as e-check, debit card, credit card, PayPal, etc.
- It’s a competitive advantage. If your investment properties are in a competitive market, online payments are a convenience that tenants appreciate. When they’re comparing the pros and cons of different potential rental homes or commercial properties, the ability to pay rent online will usually make it into the pros column.
- It avoids problems associated with checks. Another of the many good reasons landlords should accept online rent payments is that you don’t have to deal with the issues that can arise with check payments. For example, they can get lost in the mail, they can bounce, the tenant can forget (sometimes deliberately) to sign them, they are susceptible to fraud, and so on.