Collecting rent is one of the most important but least glamorous parts of being a property manager or owner. It can be time-consuming, frustrating, and sometimes even dangerous. There’s always the risk of running into a tenant who is behind on their rent and angry about it. And then there are the ever-present worries about late payments, bounced checks, and evictions.
It’s no wonder that so many property owners are eager to find ways to streamline the rent collection process. And for many years, the go-to solution has been online rent collection. Online rent collection offers several advantages over traditional methods like mailing paper checks or collecting rent in person. Here are ten ways to increase online rent collection.
Require Tenants to Set Up Automatic Rent Payments
One of the best ways to ensure timely rent payments is to require tenants to set up automatic rent payments. With automatic rent payments, the rent is automatically withdrawn from the tenant’s bank account on the first of every month and deposited into the property manager’s account.
This eliminates the need for the tenant to remember to pay their rent on time or for the landlord to chase down late payments.
According to Mark Pierce, CEO of Cloud Peak Law Group, “Automatic rent payments are one of the best ways to increase online rent collection because they take the burden off of both the tenant and the property manager.”
Use Online Rent Payment Software
There are many different software programs available that landlords can use to collect rent online. Some programs are designed specifically for property management companies, while others are more general.
When choosing a software program, be sure to look for one that is easy to use and offers various payment options. You’ll also want to ensure that the program is compatible with your property management software to track payments easily.
According to Jeff Zhou, CEO of Fig Loans, “Using an online rent payment software can automate many of the tasks involved in collecting rent, from creating invoices to processing payments. This can save you a lot of time and hassle.”
Offer Incentives for Tenants Who Pay Rent Online
Another way to increase online rent collection is to offer incentives for tenants who pay their rent online. Many landlords offer a discount on the rent if it’s paid online. For example, they might offer a $5 discount for tenants who pay their rent online. Or they might offer a $10 gift card to tenants who set up automatic rent payments.
Additionally, a great incentive can be to offer tenants a mobile app that allows them to add on a credit-boosting feature to improve their credit score with rent payments.
By providing these types of incentives, property managers can encourage more tenants to pay their rent online. One thing to watch for is that you don’t want to give so much of a discount that it eats into your profits.
In addition to credit and debit cards, many landlords now accept eChecks. An eCheck is an electronic version of a paper check. The tenant enters their bank account information into the property management software, and the rent is withdrawn from their account and deposited into the property manager’s account.
This is a convenient option for tenants who don’t have a credit or debit card. While a small fee is associated with processing an eCheck, it’s typically much less than the fees charged for credit and debit card payments.
According to Dean Kaplan, CEO of Kaplan Collection Agency, “eChecks are a great way to increase online rent collection because they’re easy for tenants to use, and they eliminate the risk of bounced checks. They’re also much less expensive for property management companies to process than credit and debit card payments.”
Allow Tenants to Pay Rent with a Mobile App
With the proliferation of mobile devices, it’s no surprise that many landlords now offer mobile apps that allow tenants to pay their rent. This is a convenient option for tenants who are always on the go.
And it’s especially useful for tenants who don’t have a computer. There are many different property management apps available, so be sure to do your research to find the one that best meets your needs. Look for one that has the following characteristics:
- Easy to use
- Intuitive interface
- Accepts a variety of payment methods
By offering a mobile app, you can make it even easier for tenants to pay their rent online while also increasing your online rent collection.
Make Online Rent Payment the Default Payment Method
If you have a mix of tenants who pay their rent online and those who don’t, you can increase online rent collection by making online rent payment the default payment method. When you do this, tenants who want to pay their rent offline will have to request it.
This is an easy way to encourage more tenants to pay their rent online directly from their bank accounts. However, you’ll want to be sure to offer offline payment options for tenants who want to pay rent with cash or who prefer to pay their rent in person so that you don’t alienate them, such as recording manual payments in RentRedi.
There are many different ways to increase online rent collection. Using the tips in this article, you can encourage more tenants to pay their rent online, saving you time and money. In addition, you can help to ensure that your rent payments are always on time and that you have an accurate record of all rent payments.