What Every Landlord Should Know About Accepting Rent Payments Online
Table of Contents
- Chapter 1: Online Rent Collection: Payment Options for Landlords
- Chapter 2: Mobile Rent Payment Options for Tenants
- Chapter 3: Online Rent Collection: Tenant and Landlord Apps
- Chapter 4: Online Rent Collection: Empowering the Tenant to Pay Rent
- Chapter 5: Online Rent Collection: Getting Paid On-Time
- Chapter 6: Online Rent Collection: Managing the Eviction Process
With more online and mobile technology available, you’ve probably already had someone bring up the idea of online rent collecting. They may have even suggested common payment apps—like Venmo, Cash App, Zelle, or Paypal—as methods in which tenants could electronically submit rent. And while these options might be good in a pinch, long-term you’re far better off investing in a rental payment software for landlords that offers more options for managing the rest of your rental property business as well.
Don’t get me wrong, rental property management software is first and foremost efficient systems of rent collecting, but beyond their short-term benefits, they’re a good long-term strategy investment, especially when it comes to saving time (and money) for tenant screening, marketing vacancies, handling maintenance requests, and exporting expenses for tax season. (Venmo, as much as we love it, can’t help fix a broken toilet.)
So, when it comes to collecting rent, you’re going to need to look at property management solutions for landlords that enable online and mobile rent collection options. Additionally, this should also come with a mobile tenant app that functions similarly to renter faves like Cash App and Venmo, so that it is easy to use.
Chapter 1: Online Rent Collection: Payment Options for Landlords
If you’re unfamiliar with the concept of electronic rent payments, you may be wondering how to accept rent payments online. Where do you start? And, is it worth it? The short answer is: start here, and yes, it’s worth it.
Before the pandemic, online and mobile rent payment technology was struggling to break into the rental business. But now that it has, landlords are finding it easier than ever to collect rent online and track their payments from tenant to bank account.
Why online rent collection is more secure & better for landlords
Before collecting rent online, rent checks were sent via the mail, dropped off, or handed off via an in-person interaction. All of these manual methods of collecting rent have their own obstacles: waiting on a delivery, money lost in the mail, a special trip out to the landlord’s office/tenant’s house to pick up, and then another trip to take the check to the bank. Hassles and hurdles every step of the way. However, mobile rent payments and online rent collection have totally streamlined the renting process: from payment to collection.
Customizable rent payment options for landlords
Rental property management software gives landlords a lot of flexibility in how they accept rent payments online. For example, landlords can designate the type of electronic payment they collect such as debit/credit card payments and/or ACH/bank account payments. Some landlords will accept both card and bank payments, while some landlords prefer the security of only allowing bank payments.
Note: Setting up debit or credit card payments include the ability to use Government Stimulus Cards or Government Unemployment Cards to pay rent. This guide was written in September 2020 while the Coronavirus shutdowns impact tenants and landlords.
Additionally, selecting “ACH-Only” for online rent collection can also help tenants avoid incurring unexpected and massive processing fees. It can also be beneficial for landlords who choose to assume their tenants’ processing fees. Typically, ACH/bank payments charge a flat-dollar amount to process (for RentRedi, it’s only $1/rent payment), while card fees are typically charged by a percentage amount. Card processing fees can be significantly substantial for metro highers where tenants pay higher rent. So enabling ACH-only payments can provide not only more security for landlords but also ensure the processing fee is minimal for the tenant (or landlord).
Accept partial payments or block payments
Of course, with accepting rent payments online, there can be some disadvantages when you’re in the middle of an eviction. In some states, landlord-tenant laws indicate any payment made by a tenant can, in effect, delay the eviction process. However, there are online rent payment options for landlords that give you the ability to accept partial payments or even block all payments directly from the software. This is extremely useful when you may need to evict a tenant.
Set up auto-late fees
Additionally, if you have a late fee addendum in your lease, rental payment software can be essential in setting late fee rules to be automatic. RentRedi, for example, enables you to set up auto-late fees and ensure you’re compliant with state landlord-tenant laws that cap late fees. You’re able to customize rules by property, input charge by day/week, percentage/dollar amount, and state cap.
Chapter 2: Mobile Rent Payment Options for Tenants
Electronic rent payment options are more diverse than ever. Using a rent payment app is beneficial for tenants in that it makes it easier to pay rent without having to worry about ordering or sending checks. In fact, as Millenials and (soon) Gen-Zers become a larger portion of the population, they are more likely to turn to mobile ways of paying their rent versus having paper checks on hand.
So, giving them some mobile or smartphone way of how to pay rent, makes the process easier for them. Plus, a rent payment app gives them (and the landlord) more options when it comes to paying the rent, such as credit card, debit card, bank account, or even bank-account only.
What can tenants expect?
When paying rent electronically, a lot of times there is a processing fee. This fee will vary depending on the rental property management software you use, so be sure to research their processing fees. With RentRedi, the fee to pay with ACH (bank account) is only $1, keeping the cost relatively low for tenants.
However, some online rent payment software lets you assume the processing fee for tenants if you prefer—which can be an added incentive, especially if you offer to assume the processing fee if the tenant sets up automatic rent payments.
Chapter 3: Online Rent Collection: Tenant and Landlord Apps
When it comes to the best online rent payment system, the leading property management software includes portals for tenants. And now, the tech-first companies have apps for both landlords and tenants. Beyond managing online rent collection, a rental property management software that has both a desktop dashboard and mobile app for landlords means that you can always have your properties in your pocket.
Smartphone app for tenants to pay rent
Having a mobile rent payment app for tenants to make payments offers far more security than online web payment portals. 81% of tenants now have a smartphone, which means that more likely than not, your tenants will have a smartphone. Additionally, a growing number of renters use smartphones as their primary means of online access at home. This makes it easier for tenants to pay their rent, regardless of computer or broadband access.
Smartphone app for landlords manage their properties
Being a landlord means you’re busy and always on-the-go. That’s why, in addition to having a web dashboard to manage all your properties from your office, having a companion landlord app is equally as important. In RentRedi, your information is synced across all platforms (web and mobile) so that you always have access to all your information and data.
If needed, you’ll want to be able to send a rent reminder while you’re out and about and thinking of them, check on applications while you’re stuck in traffic, or be notified immediately that a tenant has made a rent payment.
Chapter 4: Online Rent Collection: Empowering the Tenant to Pay Rent
Fortunately, with rental property management software, there is a bevy of features that not only allow landlords to collect rent online or via mobile app, but that also makes the process super easy for tenants as well.
Tenants can enable auto-pay
One of the most basic ways for tenants to ensure rent is paid on time is to schedule an automatic rent payment (auto-pay). Automatic payments is a popular method of making recurring payments (like utility bills, phone payments, and streaming services). For tenants who want to make paying their bills as easy as possible, paying rent via auto-pay is an easy solution. Let’s face it, the first of the month can slip away from the best of us so being able to set a recurring payment for all your bills, including rent, is an easy way to avoid incurring late fees.
Schedule recurring rent reminders
Another easy way to make sure rent is paid on-time via a rent payment app is to schedule a recurring rent reminder. You can line up this rent reminder to occur when you receive your paychecks and pay rent early (if your check comes before the end of the month), meaning your rent is all paid for and taken care of by the time the 1st of the month rolls around.
Support for tenants included
Importantly, when it comes to choosing the best online rent payment system, you’ll want to check out their tenant onboarding process. When adopting a new technology for your rental business, it’s valuable to know that if your tenant has any questions regarding the software that YOU won’t be the middle person. This is why a rental property management software’s customer service is key and why it’s a central focus for RentRedi. We know that providing a harmonious rental experience is important when it comes to providing a rental payment app for your tenants, so it’s our number one priority.
Chapter 5: Online Rent Collection: Getting Paid On-Time
Ultimately, the key factor when rent collecting is time. Tenants want to be able to pay their rent on time and landlords want to be able to transfer their funds in a timely manner. Time can have a major impact on how you set yourself and your business up for success.
Send in-app notifications by unit, property, or all tenants
There are several features of a rent payment app that successfully position and empower the tenant to ensure their rent is paid on time. But, if you’d like to give them a little nudge in the process, landlords can send customized in-app notifications to their tenants regarding rent reminders (and any other important announcements, like maintenance).
Landlords receive funds from tenants in 1-3 business days
Often, the most time-consuming part of rent collecting comes with the transfer of funds from tenant to the bank to the landlord. However, if you’re using a rental property management software, you can track your rent payment from tenant to bank account. As soon as the rent payment is made by the tenant, you’ll be able to see the initiated payment on your RentRedi dashboard. This solves the problem of the “check’s in the mail” ambiguity. And, while typically you can receive your rent payment in 1-3 days via rental payment software, keep in mind that banks often have their own holds.
Set up automatic, recurring late fees
Another way to ensure that rent payments are timely is late fees. If you’re self-managing your properties and trying to account for Tenant X being 10 days late and Tenants Y being 6 days late…it can start to become confusing. Automatic, recurring late fees via rental property management software can optimize your process. This sets you up for success by ensuring you are consistently following your best business practices.
- 5 Tips for Easier Rent Collection and Getting Paid On-Time
- How Auto-Late Fees Can Optimize Your Landlord Process
- Tenant Communication: In-App Notifications to Tenants
Chapter 6: Online Rent Collection: Managing the Eviction Process
The eviction process is never fun. It’s time-consuming and costly, so it’s important to protect yourself as a landlord. Like we noted in our Guide on How to Be a Good Landlord, having a lawyer-reviewed lease and adhering to your business policies are key ways to avoid lawsuits when it comes to eviction.
Block partial payments
Sometimes circumstances with a renter might lead to a partial rent payment situation. If that’s the case, you’ll want to have an agreed-upon arrangement with your tenant that indicates when full rent should be paid. However, should you be proceeding with an eviction, you can block partial rent payments directly from your RentRedi dashboard.
Block all payments
Another way to protect yourself as a landlord is to ensure that you don’t receive any further rent payments from your former tenants once you’ve started the eviction process. Of course, this will depend on state-specific laws, but states like Texas, require blocking payments after you’ve delivered a notice to vacate.
Landlords customize and control payments from their dashboard and settings
Importantly, should the situation arise where you need to evict a tenant, you’ll want as many customizable payment settings that you can control from one place—which is exactly what RentRedi provides from our dashboard and settings option. Landlords should be able to set up their business for success when it comes to collecting rent and managing properties so that they can ensure they’re following best practices for being a good landlord.
There is a whole wide world of online rent payment options available for landlords looking to make their lives easier and business better. When it comes to rent collecting, you’ll want to ensure that the process is easy for both landlords and tenants. For landlords, online rent collection services like RentRedi ensure that you’re able to customize the rent collection experience—from the types of payments you’ll accept (card, ACH, or ACH-only) to being able to block payments if necessary. It’s also important to ensure that the online rent payment system you use comes with a mobile app that syncs your data automatically and allows you to access all your information on the go.
Additionally, rent payment apps like RentRedi ensure that your tenants have an easy to use, secure platform on which to pay rent and schedule customized rent reminders and even set up automatic rent payments. Moreover, you’ll want to ensure that—like RentRedi—tenant support is included in the mobile rent service, so you don’t have to worry about troubleshooting issues with the tenant.