What is the Best Way to Collect Rent as a Landlord?
Collecting rent is one of the fundamental parts of being a landlord. While it seems simple, it can actually add up when it comes to managing rent collection on numerous properties… we’re talking about not only processing the payment but also record keeping and managing late rent and renter’s varied ways of making payments. It can become a lot. What is the best way to collect rent as a landlord? There are a few different answers and it may come down to certain preferences on your end.
Our Atlanta GA property management includes a whole array of services. Collecting rent we respect as being one of the most important and integral parts of the entire process of managing property. That’s why it is important to do it right… but also, do it in a way that makes the most sense for you and where you are at as a landlord. So, let’s dive into some of the main options so you can decide what is the best way to collect rent as a landlord for your own journey.
Table of Contents
- Pros and Cons of Different Ways to Collect Rent
- Ranked: The Best Ways to Collect Rent as a Landlord
- How Hiring a Property Management Company Helps
Pros and Cons of Different Ways to Collect Rent
When seeking out what is the best way to collect rent as a landlord, it is pretty clear that choosing the right rent collection method for you is a big deal. It impacts cash flow, record-keeping, and tenant relationships… all of those might be based on your own preferences on how they are done. You might also already have certain software that does part of those things that you prefer… “integration” with existing systems might be part of your decision-making.
Traditional methods like collecting rent in person or via mail offer a personal touch and don’t require technological proficiency from tenants. While this is true, these approaches can be time-consuming, pose security risks, and may lead to delays if payments are lost or delayed.
Online payment platforms, such as PayPal or Venmo, provide convenience and speed. So they become solid options. Their services generally offer instant payment confirmations and reduce the physical handling of money. On the downside, they will typically charge transaction fees. Also most of these platforms are not designed specifically for rent collection, potentially lacking features like automated reminders or integration with accounting systems.
Dedicated property management software offers a more comprehensive solution, so many go that route. These combine rent collection with tools for lease management, maintenance tracking, financial reporting, and possibly a number of other things. These platforms can automate late fees, block partial payments, and provide detailed financial records. The primary drawback is likely the cost, as premium features often come with subscription fees… this may be a consideration for landlords with smaller portfolios.
Ranked: The Best Ways to Collect Rent as a Landlord
Now let’s get into the meat and potatoes of the topic. There are pros and cons to each. It may be that one of the cons at the top is so important to you that it drops to the bottom of the list. But overall, when judging the best way to collect rent as a landlord, it can be helpful to look at the options based on what tends to be the more popular ones and make your way down the list. So here is our list.
Online Rent Collection Platforms – Using dedicated platforms like Avail or Landlord Studio streamlines the rent collection process. These services offer features such as automated payments, reminders, and direct deposits into your bank account. They also provide integrated accounting tools, making it easier to track income and expenses.- Automated Clearing House (ACH) Transfers – ACH transfers allow tenants to transfer rent payments directly from their bank accounts to yours. This method is secure and can be set up for recurring payments. While it eliminates the need for physical checks, coordinating the setup with tenants and banks might require some initial effort.
- Payment Apps – Payment applications such as Paypal, Venmo, or Zelle (a few of the big ones) offer a quick and convenient way for tenants to send rent payments digitally. These apps provide instant notifications and easy tracking. On the other side, these apps need to make money somewhere on their end. That generally means transaction fees. Also as previously pointed out, not all are designed specifically for rent collection so they may lack certain custom features that landlords might want.
- In-Person Collection – Collecting rent in person allows landlords to maintain a personal connection with tenants and address any concerns directly. This method means having immediate receipt of payments but can be time-consuming and – for many – impractical.
- Mailing Checks – Accepting rent payments via mailed checks is a traditional method that some tenants may prefer. While it doesn’t require technological proficiency, this approach can lead to delays due to postal service issues and lacks the immediacy of electronic payments. There’s also the risk of checks being lost somewhere in the mailing.
How Hiring a Property Management Company Helps
Are you looking to expand your rental business, but you don’t have the time to manage it all? That is when property management can come in and make a world of difference. Bay Property Management can assist with all the day-to-day tasks of your rental properties… so you don’t have to!
BMG offers tenant screening, maintenance, rent collection, eviction services, and more. If you are searching for what is the best way to collect rent as a landlord, you would be amazed how choosing the right property management company can alleviate so many of your payment issues so you don’t have to worry about it. We provide property services in Atlanta, Texas, Boston, Baltimore, Philadelphia, Northern Virginia, Washington DC, and elsewhere.
