Traditional methods of rent collection, such as cash and check, are slow and insecure, and in an age of ease, of Amazon and Netflix, collecting rent with one of the aforementioned methods will not only make your life harder but could be actively detrimental to your rental business. Having efficient processes in place around rent collection will not only save both parties time but also encourage more timely rent payments.
What though, can landlords and property managers utilize the available technology to create efficient rent collection and property management systems that will increase on-time rent payments and positively impact tenant retention?
In this article, I’ll explore 3 key areas that landlords and property managers can focus on, and how technology can make a major impact.
When communications break down, it can create a feeling of neglect on the tenant’s side, rent is a large expense, and there are certain expectations that come with high costs. Well managed communications on the other hand, whether it’s routine notices or a rent reminder email, will show your tenant that you are engaged and create a positive customer experience.
Fantastic Cleaners sheds light on this and says, “However, managing comms with multiple tenants across several units can become increasingly time-consuming. Landlords that adopt the proper tools will be able to supply the required level of service to their tenants without spending all their time messaging them.”
This is why a high level of engagement is a reflection of your professionalism and will show tenants that missed rent payments will be chased, and any late fees as stipulated in the lease will be implemented.
Setup online rent collection
We live in a digital age. Things are increasingly moving online for the sake of convenience. According to JRT Plumbing, “Businesses that don’t accept forms of digital payment, whether that’s recurring subscriptions or in-store card payments have long since lost out to their competitors.” However, landlords are behind the times in this area.
There are numerous platforms that a landlord could use to collect rent, from Zelle pay to ACH. However, there are few solutions that can combine with your income and expense tracking tools and enable you to automate the process.
With online rent collection through landlord specific tools, tenants can set up recurring payments, meaning they actually can’t forget to pay. According to tenancy experts Fantastic Cleaners, this allows both parties a full history of payments and non-payments in an easy to use and access dashboard and can act as an assurance of income for the length of the lease.
With the right tools, you can relax with peace of mind in the knowledge that you have proof of any and all transactions.
There are several aspects in which automation tools can make a real difference to the workflow surrounding rent collection. From improving tenant communications and allowing automatic payments, to automatically reconciling transactions and automating receipts and invoices.
When collecting rent via cash, checks, or even standing order you are presented with the challenge of reconciling rent payments against bank statements each month, with an additional task of double-checking amounts and then chasing up tenants who might not have paid in full or even missed their payments.
With an automated rent collection solution, this is completely unnecessary because all of this can be taken care of for you within the software. This is yet another time-consuming task, which, when handed over to the power of technology and automation, can be removed from your daily schedule, freeing you and your staff up for more valuable exercises.
The ultimate goal of using technology to improve rent collection processes is to reduce the potential for late payments without dramatically increasing the amount of work involved while doing so. When tenants are left to manually pay their rent, using whatever system you decide, whether it’s cash or a tool like Venmo, then it is easy for them to forget, or even prioritize other expenses first.
With the right tools though, tenants can be requested to set up automatic payments which will go straight into your bank account and simultaneously remove the need for manual reconciliation tasks.
Whichever method and tools you adopt to improve your rent collection processes make sure it is spelled out in the lease. You should explain how you expect the rent to be paid with detailed instructions if necessary or how to get set up so that the tenant has no excuse to pay late.