One of the most important aspects of property management is collecting rentals when they are due. As a professional property manager, you probably oversee the management of various properties that are located in various areas. With this in mind, it is imperative that you identify and implement an effective and seamless way to collect rentals from your tenants. Here are a few of the best ways to collect rentals from tenants.
Choosing a rent collection method
There are a few considerations when you are contemplating the most effective rent collection method for your circumstances.
The number of properties you are managing
Firstly, the number of tenants, as well as rental properties you are managing, are of great importance. Are you managing a single property or multiple rental properties? There is a correlation between the number of tenants/ units you manage and the rent collection method you choose.
Proximity to your tenants
Secondly, your distance from your rental properties is another important consideration. Are you in close proximity to your tenants or do you have to travel a long distance to swing by the rental properties?
Interaction with tenants
Another equally important consideration when determining a rent collection method is your desire to interact with your tenants. Do you want to keep interaction with your tenants to a minimum or do you wish to interact with your tenants on a frequent basis?
Use of technology
Finally, are you familiar and comfortable using technology and various payment methods. Although there are several electronic services, there are also other excellent alternatives to digital payment methods.
Do not forget that regardless of the payment method you pick, it is still your responsibility to keep accurate records. Moreover, keep in mind that there are rent related taxes that you need to prepare for.
To start with, you can utilise traditional rent payment methods. However, in addition to being less convenient than digital payment methods, traditional payment methods are more difficult to document.
Traditional payment methods
Here is what property managers and landlords need to know about traditional rent payment methods.
You can opt to receive rent payments in the form of cash. However, this is not advised as cash payments are tough to document. This can subsequently lead to disputes over rent payments. In the event that you are more comfortable receiving your rent in cash then it is important to set up a formal way of doing the exchange. In addition, it is vital that you devise a way of acknowledging the rent payment details.
Secondly, you can also accept rent payments in the form of cheques. Keep in mind that there are different types of cheques and some offer more security than others. As such, decide which cheque type you will be comfortable receiving. You can pick between personal cheques, certified cheques, as well as cashier’s cheques.
Another traditional rent collection method is the use of money orders. A tenant will a money order from a post office or bank and remit the equivalent of the rent amount with either of these institutions. The tenant will then give you the money order to receive the rent amount.
Electronic payment methods
Fortunately, in the modern era there are so many electronic payment methods to choose from. You can choose from any number of online portals and other mobile payment methods. From online transfers to Paypal there are so many electronic payment methods by which you can collect rent. Keep in mind that some of these payment methods have a delay before the payment reflects on your end.
Additionally, there are a host of other online rent collection services. These services come highly configured and specialised to aid you collect rent. Some are even so sophisticated that they can automatically calculate late rent penalty fees, as well as manage work orders. Is your overall object to streamline and automate the entire rent collection process as much as possible? Then an online rent collection tool is your best option.
It is usually a good idea to have one electronic and at least one traditional rent payment method. This is essential to simplifying the rent collection process. In additional, it is also important to consider which payment option is the mot convenient for your tenants. Whatever, rent payment method you eventually settle on, keep in mind that is should be well documented.