When it comes to collecting rent, there are several different methods that you can offer your residents. Good old fashioned cash always works, but now there are a lot more payment methods that have become accessible. Let’s take a look at some of the pros and cons that go with each and help you determine which one is right for you and your business.

Cash

Cash is quick, easy to use, and almost everyone has it. This is not usually the preferred method of landlords for a couple of reasons. First, it is easy to lose. If a resident hands you a cash payment in passing, you had better be able to put it somewhere and not lose it. Once it is in your hands, it is your responsibility to get it to the bank. Also, if the bank loses it, there is no way to track that it was deposited. A check can be followed and tracked to when it was cashed. It is also easier to steal. If you know your staff well, then you are probably all set. But you never know if someone might have the urge to suddenly start taking a little piece of the cash for themselves. And third, cash is the way that some people get around being tracked for one reason or another. If they are involved in illegal activity, it makes it easier for them to go undetected.

In Person Debit/Credit Card Transactions

You can take a resident’s card manually to swipe in the office. Having a card reader or an app on your phone that takes payments makes this easy. However, for the convenience, you may end up paying some fees. Square, a popular credit card payment processing system will send you a free card reader that you plug right into your phone. They charge a 2.75% fee on transactions where you swipe your card and 3.5% plus a $.15 fee for every time you key in the numbers on a card. If you are taking a $1,000 rent payment, this can equal out to almost $25 or $35 in fees. You could consider charging your residents a “convenience fee” to use this method of payment, making it so that you get the majority of your payment in full.

Online Payment Options

You can give your residents the option to pay right online. PayPal is a website that allows you to send invoices and receive payments from your residents. It makes things easy to track and convenient for your residents. They can pay you from anywhere. PayPal also charges a fee, so make sure you understand what will be taken out of your payment. You can also run into the risk of a chargeback where a resident might go straight to PayPal to dispute their rent charge. This leaves you completely in the lurch.

Automatic Payments

Automatic payments are probably the most convenient way to get paid. It automatically withdraws the payment from your resident’s bank account at the same time every month. Knowing when and how your rent payments are going to show up is worth every cent that you have to pay for the system. If the resident does not have enough money in their account to cover the payment, it will fail and you will be left chasing them for money when the time comes.

It is best to keep a credit or debit card on file for each of your residents. Have a policy in place that if they don’t pay by a certain day of the month, then you will automatically charge the rent to their credit care. Ensuring that you get paid on time keeps the property functioning and everything running smoothly. If you are looking for more help with property management, check out our website at Occupancy Solutions.