The prevalence of online rent payment services should continue to explode in the coming years, due to a number of factors affecting the market. Continued economic uncertainty means that young adults and families regard renting as a safer option when compared to purchasing a home. In addition, the ongoing transition to digital commerce means that his generation views online rent payment services as the obvious alternative. Landlords also gain benefits from instituting online rent payment services for their tenants.
Once thought to be a logistic nightmare, online rent payment services have firmly entered the mainstream. While many industry watchers believe the transition was inevitable, a number of factors have played a role in quickening the pace of this change. A prime cause in the move to online rent payment services has to do with the country’s changing demographics, as survey after survey shows increased interest in renting as a preferred way of life.
For example, online rent payment services are tailor made to suit members of the Millennial Generation, who are now firmly ensconced in their renting years. Whether they are entering college, seeking to enter the workforce for the first time, or settling into marriage, this group of Americans lives a mobile life – both geographically and digitally. They expect to rent for years, perhaps decades, to come, and they expect to be able to handle their entire social, business, and bill-paying tasks from their mobile devices.
In fact, a survey by the National Apartment Association found that online rent payment services topped a list factors that influence this generation’s decision regarding whether or not to rent a particular unit. One a five-point scale, with 1 representing no impact and 5 signaling a significant impact, the availability of online rent payment services scored a 4.44. The one caveat was that renters wanted this transaction to go through without a convenience fee.
Given this ongoing trend, increasing numbers of landlords and property management companies are adding online rent payment services to their business procedures. One easy method is simply to implement an automatic withdrawal method. From the point of view of the landlords this system offers a number of benefits over the traditional method of collecting rent via a check sent in the mail.
First, under normal circumstances, when no payment problems are occurring, the automatic withdrawal method of online rent payment services requires no effort on the part of the landlord to collect rent. In addition, the system is easy to set up with the majority of banks and other financial institutions.
At the same time, using automatic withdrawal for online rent payment services is not perfect. Monthly fees can eat into profit margins or turn prospective renters away. It also requires monitoring to ensure that the rent was actually transferred to the account.
Credit cards also provide a method of instituting online rent payment services. To take advantage of this option, landlords usually need to have a merchant account that accepts major credit cards. This is usually easy to set up, but some landlords may not want to set up a merchant account. In lieu of a merchant account, PayPal can be used to create a system of online rent payment services. In some cases, landlords can build the online rent payment services into their main website, which is also provides terrific convenience for everyone involved.
Accepting credit cards as part of a property’s online rent payment services does carry some risk. Allowing a tenant to pay by credit card by unwittingly result in the tenant over-extending themselves to the point where they no longer have the means to pay rent. At that point, the situation can deteriorate into an eviction battle. Transactions fees also represent a necessary part of this type of service, something both tenants and landlords will have to come to terms with sooner rather than later.
These concerns are minor, however, when compared to the overall convenience and efficiency of online rent payment services. The technology surrounding them will steadily improve in the years to come, to the point where sending a check to pay for rent will most likely go the way of the eight-track tape and rotary phone.
Whether you’ve got one unit or 100 units, being a landlord or a property manager is no easy job. You’re constantly dealing with repairs, upgrades, complaints, counter-complaints and perhaps the worst part, collecting rent on time. And all from numerous tenants at various properties. Keeping who has what problem straight at which location is enough to make the average person’s head spin. One area that can be greatly improved is rent collection thanks to online rent payments.
No one has to tell you that the world has gone digital. As ecommerce expands, collecting rent electronically is fast becoming a new trend. Every day, millions and millions of people pay bills, make purchases, buy movie tickets and more online. And with prescheduled payments deducted automatically from tenants accounts, landlords enjoy the immediate transfer of funds to their accounts while tenants enjoy the peace of mind of knowing that their rent is definitely paid on time.
Besides a mortgage, a monthly rent payment is probably the single largest expense any individual or family is responsible for. And it’s important to both landlords and tenants. Online rent payments eliminates the possibility of forgetting to write the check or even forgetting to mail it. Of course, you then have to worry about having a stamp and on top of that, the payment can still get lost in the mail. A harrowing experience for both parties involved. Paying rent online takes the hassle and the worry out of paying rent for both sides. It offers tenants the benefit of paying their rent in just a few keystrokes from any computer or mobile device, and it offers landlords better cash-flow and easier bookkeeping.
Naturally, some people will resist paying online. This is often the case with many senior citizens. If some of your tenants do not wish to pay rent online you must be prepared to accept the traditional mode of payment; the check. This means that whatever accounting software program you choose to manage your rent payments must be adaptable to both forms of payment. Of course, you’ll want to back-up records of your rent payments–be they checks, cash or online–in case of a computer malfunction. While online rent payments can clearly make collecting and accounting for rent payments much easier and a faster, a software glitch can wreak havoc with your books without proper backup.
When instituting an online rent payment arrangement, the issue of transaction fees must first be settled before any program is put in place. Will the tenant pay the transaction fee or will that responsibility fall to the landlord or property manager? Many financial institutions offer extremely affordable programs that wave the typical fees if the rents are deposited in an account with that institution. Important Note: If you chose to deal with a bank or other financial institution please be aware that holidays and weekends will interrupt the processing of deposits.
As a final note, you will need to create a corporate website where you’re tenants can go for information and to pay their rent online. Be sure to hire a top notch web developer who can create an intuitive, stable, secure site free of opportunities for hackers.
Online shopping, travel reservations, movie tickets and even online bills. Could paying rent online be next? If the past has taught us anything it’s that people throughout the world love the Internet and frankly, can’t imagine living without it. So it only stands to reason that soon landlords will join the fray and begin collecting rent online.
Online rent collection portends to be a huge boon to landlords in so many different areas. Online payments are electronically processed and arrive in your account almost instantly. In addition, once the funds arrive they are instantly accessible. There’s no more waiting for checks, money orders or cash and best of all, you eliminate many bookkeeping and accounting functions which your bank now provides.
The first step in collecting rent online is to establish and account to receive your rent payments. A business account is your best bet as there’s no chance of your personal information being revealed. Once you have the mechanism to receive funds in place it’s time to make your tenants aware of this option. Flyers or letters are probably your best best. You’ll want to extoll the benefits of paying rent online to your tenants. Benefits such as the ease, the lack of hassle, no loner having to remember when the rent is due, and the relief of writing one less check and then accounting for it. Rent payments can be automatically programmed to be transferred to the landlord’s account on any date the tenant sets. Tenants who opt for this option literally don’t have to do a thing. It’s all taken care of electronically online.
You should also provide your tenants a form which they complete signifying their willingness to participate in online rent payment. You will then collect these forms and turn them over to your bank so they can prepare for rent payments form these tenants.
Of course, you may encounter some “old school” tenants who prefer to write a check which they receive back once cancelled. Your goal as a landlord is to do your best to convince these late adopters that they should, in fact, join the majority and switch to online rent payment. Ask these hold-outs whether they shop online, order theatre tickets online or even pay their utilities and other bills online. If so, then paying rent is no different, Their bank statement will show the deduction and the landlord’s will show the credit. All without writing a single check, buying a money order or walking around with a large amount a cash.Once you, the landlord, has received yeses from all your tenants, collecting rent online will put you in the category of some of the most progressive businesspeople around, And that, certainly, is a good thing.
Learning how to collect unpaid rent from tenants is one of the key issues faced by landlords and property managers on a regular basis. Often tenants will pay a portion of their rent, or string landlords along with promises of imminent payment. Understanding and clearly communicating a number of key policies to tenants is the best way to manage the process of how to collect unpaid rent from tenants.
Seasoned real estate investors will confirm that knowing how to collect unpaid rent from tenants is one of the key skills necessary for success as a landlord or property manager. Failure to pay rent is a problem stretching back to the very first rental agreement, and it is unlikely to go away anytime soon.
In addition, the image of the unscrupulous landlord exploiting the weak and helpless tenant is etched in our collective psyche, making it even more difficult for landlords to know how to collect unpaid rent from tenants, what their rights are, and how to create a system that works for everyone involved.
To be sure, some landlords take their knowledge of how to collect unpaid rent from tenants too far. However, the vast majority of landlords simply wish to conduct a decent, profitable business that provides shelter, a much needed service by human beings everywhere around the world. As such, landlords who know how to collect unpaid rent from tenants in an efficient manner stand a much greater chance of remaining in business for decades and even generations in the future.
The first step in gaining this knowledge is to recognize the need to follow a precise legal process. If a tenant fails to pay rent, the landlord must move into “robot mode.” Following a system helps ensure that rent will be collected before too much time elapses. Promises of impending windfalls are nice, but, as the saying goes, promises don’t pay the rent. Money pays the rent.
Landlords who know how to collect unpaid rent from tenants usually start with a document known as an Urgent Late Notice. This notice should be delivered at the end of whatever grace period has been determined. Tenants should know which day of the month represents the end of the grace period before they sign the lease. If that date passes, the landlord or property manager should ensure that the notice arrives in a prompt fashion.
The late notice starts the process of how to collect unpaid rent from tenants. Once sent, it should prompt a response. If that response fails to come within a reasonable period, perhaps three to five business days, the landlord should follow up with a phone call. The call should be firm, friendly, and serious in tone. It should inform the tenant that failure to pay rent by a given date will result in the account automatically being handed to an attorney’s office.
Should the tenant still fail to respond or pay rent, the next step in knowing how to collect unpaid rent from tenants is to send an official eviction notice or attorney’s letter. The letter should include instructions to pay rent of quit the premises. It should also inform tenants that failure to pay in a timely fashion will be reported to appropriate credit-rating agencies.
If this step also fails to elicit payment, landlords or property management companies who know how to collect unpaid rent form tenants agree that the eviction process must move forward. At this stage, landlords should employ the services of a competent lawyer who has experience in eviction cases.
Going it alone, without the aid of an attorney, is a recipe for disaster.