Last Updated on February 24, 2024 by Touseef Umair
Managing rental properties is made simple with online rent collection. This feature is offered by every major property management software company and allows both landlords and tenants maximum efficiency and flexibility.
So how does it work? Prepare your tenants to put cash and check payments aside. With online rent collection, tenants pay online via debit, credit, or ACH transfer. Once their payments are processed (anywhere one to three days), you receive the funds as a direct deposit into your bank account. It’s as simple as that!
For many tenants, it can be hard to give up a long-held tradition of mailing payments. Landlords, too, struggle to conceptualize a rent collection process with so little responsibility on collection day. However, even the most reluctant landlords will find that online rent collection enhances their rental businesses.
Here are three benefits of implementing online rent collection in your business.
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1. Convenience
Convenience is a major draw of online rent collection and property management software more generally. For landlords, online rent collection eliminates the need to make trips to the bank each month to deposit large quantities of checks or cash. Funds are automatically deposited within a few days of each payment. Without this tedious task on your radar every month, you are free to pursue other, more pressing responsibilities.
Property management software also makes record keeping more convenient. For instance, landlords can view payment records on their cloud-based software on any computer or device, no matter where you are. Going out of town for the weekend? No worries. You can still access your software and ensure that tenants are meeting those rent deadlines.
Online rent collection is convenient for tenants as well. They can view their previous payment records on the software by logging on to their accounts. Tenants can also make payments from wherever and whenever is most convenient for them.
Let’s say your tenant forgot about rent until the evening of the due date. No need to panic or worry whether the payment can be mailed in time—they can submit rent the instant they remember, even from their phone.
2. Efficiency
Efficiency is key for every rental business. The more time you spend on simple, repetitive tasks, the less time you can dedicate to bigger projects for your business, like adding another revenue stream or polishing up some listings.
Online rent collection is designed to make collection as efficient as possible. With this feature, you don’t have to waste time creating and sending your own payment receipts each time a tenant makes a payment. Your tenants already have access to payment records as soon as they make payments.
Sometimes it’s difficult to notice exactly which areas of your business are inefficient. It’s useful to have a second pair of eyes on your financial reports. Property management software is those fresh eyes, offering financial reporting features. Your software generates accurate, detailed reports based on rent revenue and expenses, helping you glean helpful insights for better business management.
Property management software prioritizes efficiency in all of its features. Online rent collection is no exception.
3. Automation
A final benefit of online rent collection is its ample potential for automation. Any function that can be partly or fully automated is both convenient and efficient. Look out for opportunities to automate in each of these areas.
Late Fees
Most online rent collection features have built-in structures for assigning late fees. This means you can configure your software to automatically push late fees to any tenant who hasn’t made the appropriate payment by a certain date or after a specified grace period.
There are multiple benefits to late fee infrastructure. For one, it increases accountability between you and your tenants, ensuring everyone sticks to the original lease terms.
It also serves as a neutral third-party enforcer. With online rent collection, you no longer need to be the “bad guy” when it comes to enforcing unwanted fees.
Record Keeping/Accounting
As mentioned, property management software automatically generates payment records and receipts. Emailed receipts are convenient and quick, while detailed payment records can be found by logging on to the software.
AutoPay (for tenants)
If you want to minimize late payments, encourage your tenants to use the AutoPay feature. Automated payments mean zero risk of late fees, and decreased hassle for you on collection day.
Upgrade Your Rent Collection Process
Online rent collection offers benefits for landlords and tenants alike. There’s no downside to a system that offers convenience, efficiency, and ease for all parties involved. The simplest way to upgrade your rent collection process is to entrust the task to the property management software of your choice, and then reap the benefits.
Read also: Move-in Fees vs. Security Deposits: Which Should Landlords Collect?
