Are you spending time every month driving from property to property collecting rent? If the answer is yes, then you are wasting your time. If you only own one or two rental properties, then it may not seem like a big deal, however as your property portfolio grows, this time will also increase. Eventually, it’ll become overwhelming.
These five tips will help you streamline the rent collection process so you can focus your efforts on other tasks.
1. Collect Rent Online
The most popular method of streamlining the rent collection process is to implement an online system. There are several online rent collection websites and services that you can sign up for. Then your tenants would make their own account with the website or service. They will then log in each month to make their rent payment.
A great alternative to this is to work with a property manager. They tend to already have payment processes in place. The manager can then track and manage online payments for you.
2. Deposit Into a Checking Account
Some tenants don’t have the proper bank accounts or financial tools to be able to make payments online or other automatic payment services. The tenant may want to pay you in cash. However, cash is a terrible idea, and you should never resort to making physical visits to your rental properties to collect cash payments.
Create a separate account from your personal banking accounts. Give the account number to your tenant. Your tenant can then make a cash deposit into the account. This method comes with several benefits:
- Eliminates property visits to collect rent.
- Puts the responsibility on the tenant to pay.
- Create a trackable record of payments.
- Makes the money immediately available in your account.
3. Post Dated Checks
If your tenant has a checking account but isn’t comfortable with automatic payments, they can give you post-dated checks. When you sign the lease, they will fill out a check for each rental payment for the lease’s entire length. Then as the landlord, you’ll deposit each check at the appropriate time.
4. Automatic Payments
If your tenant is ok with it, you can set up automatic payments. Then the rent payment will get automatically withdrawn from the tenant’s account upon the scheduled date. As long as there’s enough money in their account, you never have to worry about late payments.
This method does depend on your tenant to contact their bank and arrange for automatic payments. Your tenant will need to have a bank account, and their banking institution needs to offer this service. Keep in mind that many people do not like this method because it takes away their control to decide when to make their rent payment.
5. Actively Enforce Policies
While this tip isn’t about the method of payment, it’s a vital element to streamlining the rent collection process. Having set consequences in place makes it more likely that tenants will pay their rent on time. This will reduce the amount of extra effort you expel following up with late payments.
You can do this by having a set due date, grace period, and late fees. Educate your tenants on the consequences of paying their rent late. If your tenant does fail to pay their rent on time, then enforce these policies. This will reduce the likelihood of the tenant making another late payment.
Streamline Your Rent Collection Processes
As you can see, there are several ways you can streamline your rent collection efforts. This will require you to spend less time collecting rent and gain the potential to completely eliminate the need to physically visit your properties each month.
The added benefit of streamlining the collection efforts is that you’ll see an improvement in on-time payments. This gives you a more stable revenue flow, which allows you to better budget your own finances.
Contact our team today and let us help you streamline your rent collection processes.
