Modern renters often expect to be able to pay rent online, and you might be surprised by how common it is for landlords to accept rent payments online. Landlords across the country have realized that receiving electronic rent payments is a fast, easy way to improve their rental process.
What is it about accepting rent payments online that just makes sense for landlords? How can adding this service as a payment option actually make both your tenant’s life and your life easier?
While setting up rent payments online was difficult in the past, it’s easier than ever before thanks to great, landlord-centric options. If you’ve ever been curious about this process but never implemented it for your own properties, now is a great time to reconsider. Let’s talk about the advantages of online rent payment (and how you can easily add this service).
A Table Of Contents For Online Rent Payments
- Reduces Errors
- Saves Time
- Improves Communication
- Saves Money
- Increased Flexibility For Tenants
- Streamlines Online Management
- Improves Timeliness
- FAQs: Online Rent Payments
1. Reduces Errors
When you make a mistake in your bookkeeping while tracking rent, those mistakes can be costly! From not realizing that you were unpaid to missing out on collecting the appropriate late fees, there are a lot of ways you can make simple errors.
Online rent payment services often include basic accounting tools that help to prevent common errors. Switching from paper to online for rent can eliminate many issues. Some of the most common problems that can be avoided by moving online include:
- No more transposing numbers
- No more double posting
- No more forgetting to track a payment
- No more misbalancing a spreadsheet
Of course, these errors can all be avoided if you incorporate technology in other ways, but online rent payment systems make it easier than ever before. Paperless, online systems just make sense for many landlords.
2. Saves Time
Another reason landlords find accepting online rent payments to be incredibly advantageous can be found in the time they save!
Collecting rent can be quite a lengthy process:
- Collecting the checks or payments
- Preparing deposit slips
- Going to the bank to make deposits
- Posting receipts
- Making sure checks clear
- Updating your bookkeeping
All in all, this can take a lot of time! Every minute you spend on rent collection takes time away from growing your business in other ways. If you have ever felt like you do not have enough hours in the day to take care of all of your landlord responsibilities, this change could have huge benefits.
By setting up a way to accept online payments, your tenants and the service will do some of that work for you simply by paying rent. The funds are handled online, so many of the steps you had to go through are completely eliminated.
Efficiency is very important when you are running your own business. Saving time where you can is essential!
3. Improves Communication
Landlords who have set up fully-integrated online portals have found that paying rent online, as well as accessing other services, can make a huge difference in the way they manage their properties.
Communication and transparency between landlords and tenants are always very important. Tenants feel more comfortable with their landlords when they feel like they are being given all of the important information. Landlords like you, on the flip side, feel most comfortable when their tenants follow protocol very easily.
By setting up online payment portals, tenants are able to see their payment history, review any fees they are being charged, and make their payments 24/7. When tenants were only able to pay via check, this was not the case.
On your end, you will also be able to clearly see when payments are submitted and who is still running behind. Tracking down paper trails on who mailed what rent when can be complicated; checking this information online is very easy.
Of course, not every landlord is going to find it practical to invest in an online payment portal that has all of these features. However, even just having a simple online setup allows tenants to pay rent from anywhere while also being able to check their payment history, and that will help to improve tenant-landlord communication.
4. Saves Money
We’ve already discussed how you can better budget your time by using online rent payments. When you spend less time collecting and processing rent, you can spend more time on new properties, finding tenants, and otherwise increasing your cash flow.
That’s not the only way that being able to receive electronic rent payments might help you to save money!
Often, the bookkeeping and processing associated with processing rent paperwork is going to cost you money either in supplies or in needing to hire someone to manage said documentation. You can avoid or reduce these costs by sticking to online rent payments when possible.
5. Increased Flexibility For Tenants
Giving your tenants more ways to pay gives them a better chance of being able to easily do so. By setting up online payment systems that allow for a variety of payment types, your tenant will be able to pay on-time more easily.
Many online portals allow for rent payments to be made via:
- Credit carts
- Debit cards
- eChecks
- Electronic transfers
- Bank drafts
- Money orders
Landlords might not be able to accept all of these types when using a paperless route as processing a credit card payment is nearly impossible as a landlord. When using an online portal, however, a lot of flexibility in the payment method is offered to tenants.
There are even some online rent payment portals that allow you to divide up late rent into multiple payments in a way that is clearly tracked and visible. This makes it possible to create payment plans with your tenants when needed with great transparency.
6. Streamlines Online Management
Are you thinking about incorporating more online services into your rental business?
Many landlords that have multiple properties have found that using an online property management site that allows for rent payments, maintenance requests, and general tenant communication has really improved their business. Not every landlord will find these services useful, but online portals have made a world of difference for other landlords.
If you have an online portal but residents have yet to start using them, offering online payments through these portals is a great way to show tenants what benefits the system has. Paying rent is essential, and most tenants will like the ease of paying online. This will bring them onto the portal, and they will see its other benefits from there.
There are some cases of residents being even more satisfied with landlords who have effective online portals in place. From requesting maintenance to paying rent, tenants love being able to access these things easily whenever they need them.
7. Improves Timeliness
Some landlords who adopt a payment system online find that it improves the timeliness of their tenants’ rent payments. There are a few ways that rent can have this type of effect.
First, most tenants are used to having to pay bills online. The younger generations become less and less familiar with checks, and checks are being gradually phased out of common business practices across the board. By having an online system many are familiar with, it is easier for them to pay on time.
Second, there are a lot of online rental portals that allow you to schedule payments in advance or to set up a recurring rent payment. While not all tenants will want to use these options, those who do will never be late for rent as long as they schedule the payments in advance.
Having payments scheduled in advance won’t affect when you get paid, but it will help to ensure you get paid on time. That can make a great difference in the efficiency of your business.
Finally, some rent collection platforms automatically send tenants a reminder when rent is almost due. This reminder from the platform is great for forgetful tenants, and it could have a positive effect on your business.
FAQs: Online Rent Payments
What Is The Best Way To Collect Rent Electronically?
There are many different ways to collect rent electronically:
- ACH transfers
- Money transfer apps (Venmo, Zelle, etc.)
- Middleman transfer companies (i.e., PayPal, Square)
- Online rent collection companies
There are pros and cons to using each of these services. Some of the services have transfer fees; others charge monthly fees for the management services provided.
Is There An App To Pay Rent?
There are a number of different apps that can be used to pay rent. From basic money transfer apps to apps that are officially branded for rent collection, you can work out a few different payment methods with your tenants.
What Is The Best App For Landlords?
When you’re deciding which type of collection platform is going to be right for your business, consider the following:
- How many properties are you managing?
Less than five properties can easily be managed on any platform, but landlords with more than that may want to consider a rental-specific collection avenue. - Do you want other services?
Do you want to be able to do more than just collect rent, or are you only looking for a simple, online way to transfer money between two parties? - Do your tenants have a preference?
If you’re only working with a few tenants or a tenant has specifically requested online payments, find out what their preferences are and take those into consideration as well.
Ultimately, it is up to you to choose which route is best. Most landlords will choose to have one online method and at least one offline collection method as well.
How Can I Accept Rent Via A Credit Card?
To be able to collect rent via a credit card, you will need to use an online rent collection tool. Credit card payments must be processed, and the processing fee and method involved typically need a third-party vendor. Many people-to-people money transfer apps do not allow credit cards, but some middleman companies like PayPal do.
Finally, using a rental portal specifically developed for landlords and tenants is sure to have a larger variety of options, including credit card payments, when it comes to payment possibilities.
Can I Use PayPal To Collect Rent?
Yes; it is possible to use PayPal to collect rent. When using this type of service, however, remember that you must make sure you are using it in the appropriate ways for a business and not as an individual.
Once payments are processed, you will also want to make sure you keep the necessary receipts from the rent payment on file as well. These can easily be accessed on your PayPal account.
How Often Do You Receive Rent For An Apartment?
How frequently your tenant will owe rent depends on your lease agreement. For long-term contracts and month-to-month contracts, rent is owed monthly. Some lease agreements will be weekly, and the tenant will need to pay rent each week in that case. The rent payment frequency is always determined based on what is written in the lease agreement.
Update Your Collection
Technology has come a long way in recent years. Tools developed specifically to make life easier for landlords and tenants both are more accessible now than ever before. If you haven’t previously considered figuring out how to accept rent payments online, this might be a perfect time!
Even if some of your tenants continue to pay through offline methods, getting accustomed to online payments and offering it as a flexible option for your tenants is a great idea. Remember, you can:
- Save time and money
- Make your process more efficient
- Track your incoming payments easier
Changing collection methodology can seem overwhelming at first, but it doesn’t have to be. Choose the tool that best fits your needs, and you’ll be on your way to improving your rental business in no time at all.