Rent collection is the key to success with being a landlord because of one simple fact, if you don’t have cashflow coming in from your rental properties, you’re not going to be in business for very long.
Thankfully, there are a wide variety of methods that you can use to collect rent as a landlord but the big question is which option is the best?
The good news is that success leaves clues and you can learn from the mistakes, trials and mishaps of other landlords so that you can start collecting rent correctly the first time.
In this article we will share with you some of the most popular methods that you can use to collect rent so that you won’t get stuck using a rent collection method that’s not ideal for your business.
1. Online Payment Portals
Due to its efficiency and security, digital rent collection is becoming the preferred method for landlords. Platforms like Cozy, Avail, and Buildium allow tenants to pay rent through bank transfers, credit cards, or direct deposits. These systems provide automatic reminders, track payments, and reduce human errors.
Example:
John, a landlord managing 10 rental units, transitioned from collecting paper checks to using an online portal. Late payments dropped by 60% within two months, and he spent significantly less time managing rent collections.
2. Direct Bank Transfers (ACH Payments)
Automated Clearing House (ACH) transfers allow tenants to deposit rent directly into the landlord’s bank account. This method is convenient for both parties and eliminates processing fees and delays associated with checks or cash.
Example:
Sarah, who owns three rental properties, requires all her tenants to set up ACH payments. She never has to remind tenants about rent since payments are automatically deducted from their accounts on the due date.
3. Mobile Payment Apps (Venmo, PayPal, Zelle, Cash App)
Many tenants prefer using mobile payment apps due to their ease of use. Apps like Venmo, PayPal, Zelle, and Cash App allow tenants to transfer funds instantly with minimal fees.
Example:
Mike, a landlord renting out a duplex, allows tenants to use Zelle for rent payments. Since Zelle transfers directly from one bank account to another, he receives payments instantly without additional processing fees.
4. Property Management Software
If you manage multiple properties, using property management software like Rentec Direct, AppFolio, or Yardi can streamline rent collection. These platforms integrate with accounting tools, provide automated invoicing, and allow online payments.
Example:
Jessica manages 25 units and switched to AppFolio for rent collection. This software allows tenants to pay online, view lease agreements, and submit maintenance requests, significantly reducing administrative tasks.
5. Check or Money Order Payments
Though it is becoming less common, some tenants still prefer to pay rent via personal checks or money orders. Landlords can require tenants to mail the check or drop it off at a designated location.
Example:
David, who rents out a single-family home to an elderly couple, accepts paper checks since they are uncomfortable using online payment methods. He provides pre-addressed envelopes to simplify the process for them.
6. Cash Payments with a Receipt System
Cash payments can be risky due to the lack of paper trails, but they may be necessary in certain situations. If accepting cash, always provide a detailed receipt and document transactions properly.
Example:
Maria, a landlord in a lower-income neighborhood, accepts cash from tenants without bank accounts. She issues written receipts and records all payments in a logbook to maintain accurate records.
7. Rent Collection Services
Rent collection like Rent Portland Homes – Professionals handle payments on behalf of landlords who prefer to outsource rent collection. These services often include additional features such as eviction protection and legal compliance assistance.
Example:
An out-of-state landlord, Tom uses a rent collection service to handle payments for his three rental units. The service automatically deducts rent from tenants and deposits it into their accounts, saving them time and effort.
Contact Us
The best rent collection method depends on your specific needs as a landlord and the preferences of your tenants. While online payment portals and bank transfers offer efficiency, some tenants may prefer traditional methods like checks or cash. Multiple payment options ensure timely payments and a smoother landlord-tenant relationship.
Implementing one or more of these strategies can reduce late payments, improve cash flow, and create a hassle-free rent collection system.
Rent collection can be tricky when you’re a landlord but not impossible, especially when you hire a professional property management company to do the job for you.
Learn more about the property management services that we can offer you by calling us at (503) 646-9664 – Talk to a Live Person – Our office answers the phone 9 AM to 5 PM Monday through Friday – or click here to connect with us online.
