An efficient rent collection system is every landlord’s goal. Owning multiple rentals or an apartment complex that houses several tenants highlights the need for a good rental payment system. It’s imperative to monitor closely which renters already paid their rent dues for the month. After all, 100% collection leads to a steady income.
A variety of rent collection methods are available. As a landlord, you need to know which one works better for your Phoenix rental home. This article will highlight the different techniques to collect rent.
Considerations Before Picking a Rent Collection Method
Each landlord has a unique rental situation. You must be able to discern which collection method is more appropriate for your rental property in Phoenix. Here are factors to analyze before applying the method for collecting the rent:
Number of Rental Units and Tenants
It can be time-consuming collecting rent if you have several tenants and rental spaces. So it makes sense to streamline the process. Opt for a method or online system that saves your time. Collecting the rent shouldn’t require you to designate a whole day for it.
Location of the Rental
If the property is some distance from your residence, collecting the rent can feel like an arduous task. It would be a better idea to outsource the rent collection process or proceed with digital money transfers. It’s faster and saves your commute time.
Level of Tenant Interaction
Depending on the type of landlord you are, you may be more comfortable with limited tenant interaction. It won’t matter if you live near your rental property or only handle a single tenant. Your management approach should match the method of rent collection you use.
Level of Comfort with Technology
Not all landlords are technologically savvy. If you fall under this category then it’s perfectly alright to visit the tenant and personally collect the rent dues.
Available Rent Collection Methods for Your Phoenix Rental
As a landlord, you have a variety of rent collection methods to choose from. You can do it in person, online, or assign a third party. But be aware that you need to include the rent collection procedure in the leasing agreement.
Here are 5 options to select from:
1. Online Rent Collection
Most people are connected online so it’s convenient for them to pay digitally. This can be your main method but you do need to provide an option for renters that prefer to pay offline. Your Phoenix renters can also pay using the mail system.
These days, online sites provide landlords with numerous online payment choices. A host of online rent collection services can be researched online. You can pick which one best aligns with your needs.
Know that rates will be dependent on the service plans. Some services are straightforward and only offer basic rent collection. Others provide more extensive plans such as online rent roll, chat messaging, and uploading of documents for your Phoenix renters.
More common online payment platforms are Paypal and Venmo for rent collection. The former is a free service while the latter requires social media connection. They also differ in terms of payment processing time.
With Venmo, you’re able to receive payments quickly. However, Paypal takes considerable time and entails specific instructions when performing the payment. Doing it incorrectly can subject you to fees and delays.
2. Mail Rent Collection
For those who don’t have easy online access, collecting the rent via mail can be a viable option. It doesn’t require the landlord to collect in person. But there are risks involved.
One of them is a postmarked date on the envelope leading to a delay in receiving the rent. The renter could also make a partial payment only to gain more time to pay the rest. Since the mail arrives later, it will take a while for you to discover.
Another issue is the check could get lost in the mail. You can counter this by seeking a certificate of mailing. This can limit rent payment delaying tactics and provides evidence that the tenant sincerely sent the payment on time.
3. Using a Drop-off Location
This method is available for landlords who have access to a business office. Your Phoenix renters can simply head to the location to drop off their rent dues. Note that it’s not advisable to permit the renters to head to your private residence to pay the rent. However, if you live in the same rental property, this is unavoidable.
Remind tenants to use a cheque when dropping off payments. Cash can expose you to many risks. It’s easy to steal or overreport a cash value as payment and can leave the landlord with an income loss.
4. Face-to-face Collection of Payments
Going to your Phoenix rental home to collect the rent in person is also an effective method. You can directly receive the payment. The downside is it can take up some time. You’d also need prior scheduling to ensure that you meet up with your tenants.
If cash is your preferred medium of rent payment then personally collecting the rent works. You get to verify the amount of payment and issue a receipt in person.
5. Hiring a Property Management Company
Engaging the services of a property management firm is also recommended. Rent collection is just one of the valuable services they offer to support the operation of your Phoenix rental property. They can also take charge of your property’s maintenance, document management, and handle tenant issues as well.
There are many options available to landlords to ensure that rent is collected in full every month. It’s important to understand what kind of landlord you are to know what collection method works best for you.
If you need the services of a reputable property management company, please contact Taylor Street Property Management today!