Landlords listed payment issues as their number 1 worry in a 2014 SmartMove user survey, far ahead of criminal and eviction records. If you've ever had to hunt down rent payments, you know how frustrating it can be. More than half of Americans, according to a recent CitiGroup survey, have paid a bill late. What is the most important reason? They simply forgot about it. This is one of the reasons why six out of ten landlords prefer to collect rent online, according to a SmartMove survey.
Here are five reasons why landlords and tenants prefer to collect rent online:
1. PAYMENT OPTIONS AND REMINDERS HELP TO REDUCE LATE RENT PAYMENTS.
Your tenant will be more informed and accountable for paying rent on time if they receive alerts and reminders when it is due. Online rent payment tools, according to Bigger Pockets, allow tenants to deposit rent into your bank account without giving them access to your financial information. The ACH Network is used to send payments to your bank account in the majority of circumstances. Websites, mobile applications, text messages, and pay-by-phone services are all examples of payment systems.
Tenants can pay in a variety of ways, depending on the platform:
Cash at local grocery stores
PayPal
eCheck
SMS payment
Debit card
Credit card (may involve additional fees)
2. RECURRING PAYMENTS ON A SCHEDULE
Not only do most landlords prefer online rent collection, but tenants are also more ready to set up automatic payments. Checks, envelopes, and stamps may appear outdated to younger tenants, but even older tenants are opting for online bill payment. According to Money magazine, millennials pay 61% of their bills online, while older generations pay 42% of their bills online.
Paying by check adds to both you and the tenant's workload. Paying by check also makes it difficult to set up regular payments. This procedure may involve:
Waiting for a check to arrive in the mail or traveling to the property to pick it up.
Making a deposit to the bank.
Adding the payment to your accounting ledger manually.
3. RENT PAYMENT PROTECTION
One of the most secure options for both you and the renter is to pay the rent online. It removes the tenant's anxiety about misplaced or stolen cheques. Researchers recommend customers to "use online bill pay whenever feasible" in a recent Identity Fraud Consumer Report. Because a tenant's banking information is displayed on the front of the check, they may be an easier target for fraud if the check is lost in the mail.
4, REALTIME PAYMENT STATUSES
Rent collection via an online service should provide you with digital documents, allowing you to skip the paperwork. Many services may also be simply incorporated into accounting software, allowing you to focus on more vital parts of property management like tenant screening.
Using services to collect rent payments online can give real-time notifications when the money transfer is successfully put in your account. This gives you a better picture of the status of your rent transactions across various properties and makes your renters more accountable.
Source: Andrea Collatz (SmartMove)
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