As a landlord, how many late rent payments have you received? The answer is probably more than a couple. Collecting and managing the rent payment process is a significant concern for landlords and property owners. Nobody wants to chase down money or face the uncertainty of payments “lost in the mail.” So, what is the best solution for landlords to help ensure on-time rent payments? Online rent collection has not only grown in popularity; many tenants have come to expect this option. Join us below as we lay out the benefits of online rent collection along with some of the top software options for tech-savvy landlords.
Top Reasons Why Landlords Should Offer Online Rent Collection
According to Aite Group, 46% of Americans pay their bills late. Surprisingly, one of the top reasons why is that they simply forgot. That said, let’s take a look at a few reasons why landlords should adopt an online rent collection system.
- Decrease Late Payments by Adding More Options – Depending on the platform you choose, various payment types are accepted, such as debit, credit card, or ACH. Many online rent collection apps or sites also offer rent reminders, cutting down on late payments.
- Utilize Recurring Payments – Online rent collection is a desirable convenience for tenants. Additionally, tenants are more willing to sign up for recurring payments using this secure system. According to Money Magazine, millennials use online platforms for 61% of their monthly bills versus 42% for older generations. Recurring payments take away the threat of forgetting a payment, which benefits both tenants and landlords.
- Real-Time Updates – Online rent collection software allows landlords and tenants to receive real-time updates when payment is due and payment is processed. This is a huge time saver for property owners by easily showing payment status across multiple rental properties at once.
- Added Security – Imagine if a check, complete with your banking information printed directly on it, is lost in the mail. According to the Identity Fraud Consumer Report, using online rent collection is one of the safest options for payments.
- Streamlined Accounting – Online rent collection creates a reliable way to trace payment history. Items process faster and offer immediate confirmation. Tenants can easily review how much they owe and pay using a variety of digital methods. Landlords will appreciate the ability to run reports and track cash flow, making year-end taxes easier. Payments “lost in the mail” is a thing of the past.
What are the Benefits of Online Rent Collection for Rentals?
Improving operations to allow landlords to focus on more pressing matters is important. In addition to convenience and streamlines accounting, there are many benefits to online rent collection. Thanks to technology, there is no need for landlords to spend extensive time chasing payments, depositing checks, and recording on paper ledgers. Take a look at some of the benefits of online rent collection below.
- Landlord-Tenant Relationships – Added flexibility and convenience translates to increased tenant satisfaction. The straightforward transparency of online rent collection helps to eliminate disputes between landlords and tenants. No more lost payments or arguing over the date received! Improved efficiency is a benefit to all parties involved.
- Reliable Accuracy – It is easy to transpose numbers or miss a decimal point accidentally. However, if not corrected immediately, these errors can lead to a time-consuming process down the road. Online rent collection eliminates many of the common errors human interaction can cause. Therefore, by switching to an electronic format, owners can easily download reports or simply copy and paste.
- Save Valuable Time – Efficiency is the backbone of any good business, including rental management. Manual rent collection, processing, and recording take landlords away from other vital tasks. In other words, you could miss a great opportunity because you are stuck in the office. Online rent collection is fast and efficient, with little to no intervention from the landlord needed. So, landlords can save time, money, and aggravation.
- Added Flexibility – If you are still collecting rent manually, that means you need to be there to collect it. What happens if there is an emergency? What if you want to go on vacation? Well, with online rent collection, a landlord can check in on payment progress from virtually anywhere. Equally convenient, if the tenant is away, electronic payments allow them to still send money on time.
The Best Online Rent Collection Software for Landlords
Modern technology has come a long way in aiding landlords with property management tasks. Whether you are looking for just online rent collection or various administrative tasks, software is out there to help. Read on as we detail some of the industry’s top picks!
Software Programs for Online Rent Collection
- Cozy – Cozy offers landlords a variety of options at different price points. If you choose their free version, tenants can pay online via their checking account. From there, funds are available in 5 business days. However, for a nominal monthly fee per month, Cozy offers a plan where funds only take 3 business days. If tenants prefer to pay with a credit card, they have that opportunity for an added fee.
- PayRent – PayRent offers landlords added services such as tracking and reports, rent reminders, and full or partial payment options. While they do not have monthly fees, it is not a free service. Instead, they charge a small percentage fee depending on the type of transaction. PayRent accepts e-check and credit card payments with funds being available to the owner in 3 business days.
- RentTrack – RentTrack allows tenant payments via e-check or credit card. One of the biggest differences to other programs is RentTrack reports to all three credit bureaus. It provides funds the same-day to landlords, which is a great bonus. That said, there are fees involved, and they range in cost based on the type of payment processed.
Software Programs with Expanded Management Services
- Appfolio – Appfolio has various services available for landlords, from rent collection to screening and digital maintenance requests. If you have 50 or more units, Appfolio might be the solution for all your administrative needs. On average, Appfolio costs around $1.25 per unit along with a $250 minimum per month subscription. If you need something even more advanced, they offer additional products that tackle strategic accounts management, performance insight, and data export, just to name a few. These advanced options are available to portfolios of greater than 500 units.
- Buildium – Buildium affords residents the ability to pay online as well as set up recurring payments. They also offer landlords a variety of accounting, budget, and reporting services. Online rent payments will cost users a set fee for EFT and a percentage for any credit card transactions. That said, with low fees and additional services, this is a popular option among property owners.
- Rentec Direct – Rentec Direct offers a convenient web or mobile app tenant portal. Residents can easily log in to pay bills or track their submitted payments. Landlords appreciate the ability to apply late fees and collect either full or partial payment. Also, online rent collection is included in the software for no additional fees. Property owners can use this platform to handle accounting, reporting, marketing, leasing, tenant screening, renters insurance, and much more.
What to Look for in an Online Rent Collection Software?
No matter which program you choose, certain features are essential. Therefore, to get the most from your investment, ensure the software offers the following features.
- Mobile-Friendly Option or Dedicated App
- Ability to Make One-Time Payments or Enroll in Autopay
- Calculation and Applying of Late Fees
- Landlord Notice of Missed or Late Charges
- Several Types of Payment Options (Credit, Debit, ACH)
- Ability to Accept Full or Partial Payments
- Automatic Tenant Rent Reminders
- Owner Transaction Reports
Technology is a useful resource for landlords when utilized in the right way. It offers conveniences for both landlords and tenants alike. However, even with the best technology, property owners still need to follow up with tenants, market the property, process applications, field maintenance calls, and many more tasks. However, there is a no-stress solution to the day to day running of a rental property portfolio. Bay Property Management Group bridges the gap between tenants and owners. Our experienced team handles every aspect of rental management. Therefore, freeing investors up to do what they do best, find the next big deal! Give us a call today to learn more about our full-service approach to modern property management.