Collecting rent from your tenants is one of the most important parts of renting. Receiving payments is why you started renting in the first place. So, it is only natural that you want to collect your rent in the best way possible. There are several different methods, some of which are new and some are outdated. It is vital to say that the best method for you will not be the best for someone else. Based on your renting situation, you will be able to determine what is the best way to collect rent from tenants. Here are the most common methods we will present to you today.
Collecting rent in person
This is certainly one of the oldest methods of collecting rent, you can agree. You can simply go to your property, chat with your tenant, and collect rent. It is really convenient because it gives you the opportunity to check out whether the property is well taken care of. It also becomes much harder for your tenant to forget to pay the rent or pay the wrong sum of money. Furthermore, you won`t have to wait for long to get your money, as it sometimes happens with other methods.
However, this is not a flawless way to collect rent from your tenants. For example, if you live far away from the place you rent. It may not be convenient for you to go there every month. And if you have several houses for rent, it may be difficult and time-consuming to visit your tenants every month.
Creating a dropbox
This is a perfect solution if you are renting to several families that live in one house. Or if you have several houses for rent in one property. You will not have to collect rent from each tenant in person, and you will save a lot of time. The downside is that you would have to secure the drop-box from theft.
Receive your payment via mail
This is another old-fashioned yet useful method for collecting rent. Your tenants can mail you a check. The downside of this way for collecting rent is that your tenant(s) can mail the check on time, but you may receive it several days later. Technically, your tenant won`t be late with the rent, but you will not receive your money on time. And if you choose this method, always ask your tenant for proof from the post office that they sent it on time. However, there is no way that you can ask them for proof about the amount that they sent, so they can get away with mischief.
Pro-tip: Receiving checks via mail is great, but you should make sure never to give your home address to your tenants. So, the best thing to do is to set up a post office box and receive mail there. Even if the tenants made a very good first impression, you should never mix business with personal life.
Having a property manager is also an option
If you want to have someone deal with your tenants, making sure that they pay the rent on time, you can hire the best property management company NYC. They will see to it that you receive your rent on time, that your property is well taken cared of, and will resolve any issues with tenants that may arise. So, having a property manager is great, but unfortunately, it comes with a price. You would have to pay them monthly for their services. But if renting is your only source of making money, you will be able to do all of these things on your own.
Collect your rent online
Perhaps the best and easiest way for collecting rent is through an online app. Since money transfers between banks cost $30 and more depending on the fees, it is better to use an app in order not to waste money. Luckily, there are several apps you can choose from.
- The Landlord Studio app – This app has a lot to offer with just a small transaction fee. You can track your payments, issue invoices, receive money into several bank accounts, etc. The only downside is that it can take up 5 business days for the money to be processed.
- Zelle – Perhaps the best online app for collecting rent from your tenants. With Zelle, you won`t have to pay for any transaction fee as it is completely free. Also, you will never have to wait 3-5 business days to get your money, as you will receive it as soon your tenant send it. The only downside is that your bank needs to support Zelle in order for you to use this app. And both you and your tenant need to have a Zelle account in order to use it.
- PayPal – The best thing about PayPal is that most people already have a PayPal account. It is quite easy to use it, and you only need an e-mail address of the recipient. It is also completely free of charge, so your tenant won`t have to pay for any fee. Although money does not go straight into your bank account, this is a great way to collect rent.
Choose the method that works best for you
As we have seen, there are several ways in which you can collect rent from your tenants. The one that makes both you and your tenant satisfied and unbothered is the best. If your tenants are older people perhaps the best thing is to collect rent via mail or collect rent in person. On the other hand, if your tenants belong to generation Z, you will be able to receive money online without any issues. They are familiar with the newest technology.
After you choose the best method, make sure to include it in the lease
After you have decided which of the abovementioned ways for collecting rent is best for you, it is important to include it in the contract. You must state the exact way in which you expect to receive money, the amount of money, and the date when you want to receive it. Furthermore, you should leave exact instructions on how can someone send a payment to you in the method that you chose. Good luck!