Old-fashioned landlords and property managers sometimes still collect rent money via mailed check, or even in person.
If you’ve been managing rental properties for many years, or even decades, your reluctance to change is understandable.
But for modern landlords, with modern tenants, it’s much more advantageous to collect rent online.
With the right online platform, you can quickly and easily set up the option for online rent payments – or even automated payments for your tenants. And once you make the switch, it’s unlikely you’ll ever go back.
Your Priorities as a Landlord
Let’s start by reviewing your top priorities as a landlord. What, exactly, are you trying to accomplish?
Most landlords want three things:
- Profitability. First and foremost, landlords want to make money. When buying a property, you’ll use a cap rate calculator to determine the profitability potential of the acquisition. From there, you’ll manage tenant acquisition, rent payments, repairs, and other aspects of the property to maximize your income.
- Convenience and efficiency. Landlords also want to keep things running as smoothly and efficiently as possible. They don’t want to deal with constant back-and-forth communication with tenants, nor do they want to juggle dozens of tasks and responsibilities at once (especially if they have another full-time job to contend with).
- Organization. Taxes and legal issues can get complicated fast for a landlord – especially if they’re disorganized. Keeping all your financial records and communications in one place is vital if you want to succeed.
The Benefits of Collecting Rent Online
So why is collecting rent online so beneficial for property owners?
- Tenant convenience. For starters, it’s not just property owners who benefit from online rent collection. Tenants are also spared significant hassle. Instead of writing a physical check, applying a stamp to an envelope, and mailing it at the same time each month, they can simply log onto their computer and click a few buttons to make the payment. It’s faster, it’s paper-free, and there are fewer potential mistakes or hiccups to worry about.
- Options for landlords and tenants. There are multiple ways to collect rent online and multiple options for both landlords and tenants. Landlords can choose how they want their platform to look and function and can choose which options to provide to tenants. They can also set rules and automatic reminders as they see fit. Tenants, in turn, typically have the option to pay for rent in one of several different ways – and they might even be able to customize their portal to make it even more convenient for them.
- Consistent collection. Most landlords who upgrade to online rent collection find themselves collecting rent much more consistently. Tenants are much less likely to forget about rent due to automated reminders – or possibly automated withdrawals. They can also make rent payments the day it’s due, in a matter of minutes, so there are fewer delays and logistical obstacles preventing them from following through.
- Faster deposits. For the most part, landlords enjoy much faster deposits when they collect rent online. You don’t have to wait days for the check to get through the mail, nor do you have to go out of your way to collect rent yourself. You also don’t have to make special trips to the bank to deposit your income. Instead, the money is transferred to you digitally, sometimes in less than 24 hours.
- Increased security. What happens if someone intercepts the check in the mail before it gets to you? What happens if you drop or lose the check on your way to the bank? The reality is, sending and receiving money in person is inherently less secure than collecting rent online. Just make sure you and your tenants choose strong passwords and utilize best practices for cybersecurity.
- Electronic records. Once you start collecting rent through an online portal, you’ll start keeping consistent, irrefutable electronic records. You’ll have all the details of every payment your tenants have made to you – and possibly communications surrounding those payments. When it’s time to file your taxes, you’ll have a much easier time reviewing your records. Additionally, if you ever need to evict a tenant or take legal action against them, you’ll have the records to prove their historical actions (or inaction).
- Additional integrations. Many online rent collection systems don’t function exclusively for rent collection. They offer additional integrations and features for landlords, such as tenant communication portals, a place to request repairs, and even built-in marketing for your property in some cases.
Online rent collection platforms and landlord/tenant portals are relatively inexpensive. You also have the option of creating your own. If you’re interested in attaining these advantages, and accomplishing your top priorities as a landlord, there’s really no other option.
