Are you a landlord collecting rent from tenants? Whether you're sticking to cash or considering more high tech, we'll show you how to collect rent from tenants quick and simple.
Smooth rent collection begins even before you sign the rental agreement. Confirm with your tenants what payment methods you're accepting and when is the
due date for rent.
If you're imposing late rent penalties, warn your tenants beforehand so that they will think twice about late rent payments - Click here for more details on how to collect late rent payments.
To avoid late rent payments, it's a good idea to give new (and errant) tenants a reminder call a few days before their rent is due. You can also choose to text them by phone or send them a polite email.
Now that we have set up the ground rules for rent collection, let's learn how to receive rent from tenants online:
More landlords are turning to online methods because it is quicker and more convenient. So which are the best online payment methods for a landlord?
Buildium is a popular online property management program that allows tenants to pay you directly from their bank accounts. You can set it to automatically charge your tenants whenever rent is due and once rent is received, it will update your accounting records.
You just want the bare basics, Paypal is a good way to collect rent online too. Set up is free but they will charge you 2.9% of any amount that you receive. The fees will be lower if your Paypal account receives than $3,000 every month.
Setting up merchants accounts that accept credit card payments are too costly and complicated for the most landlords so we don't recommend it unless you have more than 50 rental properties to manage.
There are 2 offline payment methods that is favored by landlords - Cash on Delivery & Checks by Mail.
Cash on delivery simply means collecting cash from your tenants face to face. While it's more tedious, this is the most secure method. We recommend it if you live near your rental property or your tenants need a little push before they will cough up their rents.
If you live further away or prefer a less hands-on approach, then receiving checks by mail is the way to go.
How to collect rent by check: Hand them a stack of stamped envelopes with your own address so that your tenants can use them to mail checks to you. That ensures they can't worm their way by claiming to forget your address or running out of stamps.