Rent payment methods are often chosen based on several competing priorities. For instance, as a property owner, your top concern is your tenant being able to pay their rent consistently and on time. This means you’d prefer a method that allows you to receive the funds quickly. On the other hand, tenants don’t have these priorities. What they regard as important is both convenience and keeping their information secure. By going through the details of each type of payment method, you will be able to determine how each method approaches the different priorities.
There are some property owners who would like their tenants to pay rent in cash or with a personal check. They would be required to physically visit the tenant to collect the payment, have the tenant deposit the funds in the owner’s account or ask the tenant to send it to them in the mail. But while cash payment is the fastest way to receive funds, it is also difficult to document. Without a paper trail, a disingenuous tenant could claim that they paid in full when they actually haven’t, and you can’t verify the amount.
Personal checks create documentation of amounts and dates paid but are also problematic in some ways. Checks deposited can bounce, resulting in bank fees. Now, in order for you to get paid, you’ll have to go back to the tenant for another method of payment. There’s no immediate remedy if your tenant puts a stop payment on a check. You’ll have to suffer delays in your cash flow.
Money orders or cashier’s checks seem like a solid option, and for a lot of property owners, they are. Money order or cashier’s check facilitates the quick transfer of the rent payment into your account because they are pretty much a cash equivalent. But unlike cash, they leave a paper trail that can be used if there are any disputes. The paper trail would help resolve matters quickly. They typically do not bounce like personal checks. You can also have them sent through banks, post offices, and convenience stores. One drawback is in your tenant’s convenience. Sending a money order or cashier’s check means that they have to visit one of the locations. They have to pay for it in cash when they buy it. Also, most institutions ask them to pay a fee for their service. Now, if you add all that to the time and cost of the trip to the bank, you get an option that is more costly than it has to be.
With today’s technology and culture, online and mobile payment methods are now the new normal for rental payments. Paying online grants tenants the convenience they like and this could encourage them to make timely rent payments. But tenants are suspicious if they have to use personal banking information on a website. They are really concerned about the security of their personal information. Now, if you select to use a secure online payment method, you are addressing your tenant’s fear. The only problem with this arrangement is that there might be additional fees. Nowadays there are online payment options that don’t charge expensive fees and don’t require banking information, such as Venmo and Zelle. These are becoming very popular options for today’s landlords and property owners.
By hiring a great Hoffman Estates property manager, you’ll be free to concentrate on other matters since your property manager will collect rent from your tenants for you. At Real Property Management Northwest Chicago Suburbs, we know the importance of collecting rent in a systematic, timely way. Since we are all over the country, we can offer tenants a variety of convenient ways to pay rent. We can even offer them incentives for paying on time. Our collection process is tough but fair and is built around treating tenants with respect. If you are interested in learning more or have additional questions, please contact us online or by phone at 847-892-4040 today.