Real Estate

3 Different Methods for Collecting Rent

One of the many challenges that landlords face is tenants who fail to pay rent on time, or at all. Tenants may also fail to pay for other things they are responsible for, such as utility bills or property damages.

When tenants don’t uphold their rental contracts, landlords may be forced to sue their tenants or have them evicted from the property. But even if the landlord secures a judgement in their favor, they may never be paid and going to court can be expensive and time-consuming.

The best way for landlords to ensure prompt, regular payment from tenants is to establish clear rent collection policies. One way to simplify this process is to use outsourced payment services that can help establish payment options and produce statements to keep track of who owes what, and when. Here are just a few examples.

Automatic payments

Electronic payment options give renters and landlords maximum convenience and flexibility while saving time. There are several companies that offer direct deposit services and can set up a direct deposit payment system for landlords. Landlords can also use other services, such as QuickPay, that let their tenants go online and pay their rent. Often, this is much more convenient for both parties.

Landlords can also purchase a credit card reader, which can be used to collect rent from bank cards and credit cards. Those who have large buildings with multiple tenants may find this to be an ideal option for ensuring rent payments are on time. It offers the assurance of instant payment so that the landlord knows the bill has been covered.

Standing order

A tenant may want to be certain that they pay their rent on time, but they hate having to remind themselves to go through the payment process every month. This is often the case for regular monthly payments people have to make. One example is a car payment, and another is paying for vehicle or renter’s insurance. As a landlord, you can accommodate that in a way which benefits you.

Standing orders are used to make sure that a person’s bank goes ahead and makes that payment each month. People can use standing orders for bills that are paid on the same date each month and require payment of the same amount.

Landlords can have their tenants set up a standing order payment for rent. This ensures that the money is transferred directly to their bank account on time at the beginning of every month. The landlord doesn’t need to worry about locating the tenant and asking for payment when a standing order is in place.

Post-dated checks

Checks are always a popular payment method for landlords and tenants alike. One advantage is that landlords do not need to handle large amounts of cash, and tenants do not need to get a receipt for a cash payment to prove that their rent was paid. A canceled check turns up in the payee’s bank records, ensuring an accurate account of bills paid.

Post-dated checks have the disadvantage of delay, however. With standing orders and electronic payments, a landlord can have the immediate peace of mind of knowing that the tenant’s bill was paid in full. A check can bounce once taken to the bank if there are insufficient funds in the account to cover it. This may not be known immediately, and can lead to bank fees that the landlord then needs to collect from the tenant, as well as the original rental payment.

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