Do you still collect rent using traditional methods? If you are a landlord who is very busy or has many properties to manage, you may be wondering how to make the process of collecting rent more efficient. Landlords can save time and focus on other important aspects of property management by using an automated rent collection system. Automating rent is a great way to eliminate the inconvenience of collecting late payments and sending monthly reminders to tenants.
The property management industry is growing at a rate of 2.1% from 2022 to 2023. However, there is still a need for improvement and progress in this sector. In order to keep up with this growth, landlords need to find different ways to automate rent collection and make the process more efficient. Let’s look at different ways landlords can use to automate rent collection and make this process easier.
Card Payments
One way to collect rent is by accepting card payments. The biggest benefit of this method is that the transfers can be set up to happen automatically every month. However, a major issue with cards is that they can sometimes be lost, leading to recurring payments becoming failed payments. It’s important to remember that every payment method has its downsides. For card payments, there is a failure rate of 6-18%.
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Rent Collection Software
Rent collection software is a simple and quick way to automate rent collection. Rent collection software has many benefits for landlords. It helps them keep track of property deposits, access payment history, and generate automated receipts and invoices. Additionally, tenants have the option to schedule regular rent payments and automate invoices, which is convenient for everyone involved.
Online Payment Portals
A simple way to automate rent collection is to create an online payment portal. Tenants can use credit and debit cards, bank transfers, or digital wallets to securely pay their rent. Creating an online payment portal makes things easier and enables automatic recurring payments. Some popular online payment portals are PayPal, Stripe, Adyen, and others. Statista reports that PayPal is the most popular online payment brand in the United States.
ACH Payments
ACH payments for collecting rent have become popular because they are simple to set up and convenient for property managers. In the United States, these are commonly used for collecting rent because property managers can automate regular payments. This allows tenants to set up automatic transfers on a specific date. One major benefit of using ACH for rent payments is that it lowers the risk of stolen checks. ACH payments have authentication measures that provide additional security to prevent fraud. A survey conducted by U.S. News found that 73% of the people surveyed had experienced at least one instance of identity theft.
Standing Order
Standing orders make it easy to collect rent. Tenants instruct their bank to transfer money to the landlord’s bank account every month on specific dates. Once this arrangement is established, the payments occur automatically until the tenant decides to stop them. This feature benefits both landlords and tenants by ensuring that rent is paid on time without the need for manual monthly payments.
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Why Landlords Need to Automate Their Rent Collection?
There are many benefits to switching from the traditional method of collecting rent to automating rent collection. When you collect payments online, it simplifies the entire process by eliminating the need for manual tasks such as collecting and processing checks.
Efficiency
Automating the process of collecting rent saves time and effort for both landlords and tenants. Instead of having to manually find each payment and send monthly reminders, automating rent collection can be made simple.
Consistency
Automating rent means that payments are automatically received on time, every month. This consistency helps to establish trust with tenants, leading to recommendations and improved cash flow management for landlords.
Reduce errors
Collecting rent manually can take a lot of time and is more likely to have mistakes. Automating rent collection means that landlords don’t have to deal with manual paperwork, which reduces their administrative workload. The entire process is made simpler and more effective.
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