The core commitment in a real estate rental transaction is for the tenant to provide the landlord with timely rental payments. However, not selecting the right rent collection method could become an obstruction for both or either party in fulfilling their legal obligation in this regard.”

 

 

In any real estate rental agreement, if there is anything more important than the performance of rental obligation between the landlord and the tenant, it is unquestionably the method adopted by the landlord to collect the rent from the tenant.

Not having or selecting the right means of rental payment and/or receipt methods will only result in unusual delays and probable differences between the landlord and the tenant which otherwise were avoidable.

This article provides essential information on the best ways to collect rent and can benefit both the landlord and a tenant.

 

 

What are the top methods for rent collection?

Thanks to modern technology, rent collection by landlords or rent payment for the tenants can be done in various ways. From traditional cash or cheque payments to quick and easy online methods of fund transfer to appointing a third party to collect timely payments on your behalf, selecting a rent collection procedure is not a big deal.

Below is a list of a few good methods that you can consider using for collecting rent from your tenants.

 

1. Using online methods for real estate rent collection

Perhaps using online facilities and services for rent collection is the second most convenient method of all. We will discuss the first, the best, and the most reliable method for rent collection in the last of this list.

Online rent collection methods are available as both general and purpose-built methods.

General online rent collection methods include services like PayPal and Payoneer where you can request or generate an invoice for any sort of online payment collection including rent from your tenant.

Apart from the above, there are also purpose-built or landlord-tenant specific services as well for online collection of rent. These services specifically cater to the needs of the landlords and tenants for receiving and making timely payments of rent when due, respectively.

The good and the bad thing about online payment methods is that –

  • Some services are free while others charge high percentage-based service fees,
  • Few services allow transactions with users of other online services or bank accounts as well while others require that the sender and receiver both exist on their platform, and
  • Payment processing time can vary from being instant to taking a few days.

 

2. Rent collection via mail envelope

Some landlords allow the tenants to send their rental payments via mail. Even though this is quite traditional, but it does save a lot of time. This is because the landlord doesn’t have to go for collecting rent themselves. However, it does have some drawbacks.

First, the landlords cannot be certain as to whether they will receive the full rental amount or not.

Second, post mail can get delayed or lost on the way. Each of these cases favors the tenant as he uses these reasons as delay tactics and intentionally prolongs sending the rent due to the landlord.

Although there are ways such as a certificate of mailing that confirms that the tenant did send an envelope on the exact date when it was due, it still cannot prevent it from getting lost on its way nor can it confirm the amount enclosed in the envelope.

 

3. Having a designated place for rent collection

Quite like using post mail for rent collection is having a designated place for the same purpose. Landlords and real estate investors with a huge portfolio of rental income properties will usually have an office as well. Hence, these people can ask the tenants to pay their rent in person or drop off rent payment envelopes at their offices.

However, if you intend to use your residential address for this purpose, we highly discourage doing it.

Depending on whether you receive rental payments in the form of a cash or cheque, handling payments at your home can be a huge risk. Also, many experts never recommend landlords disclose their residential addresses to the tenants unless in exceptional circumstances.

 

4. Visiting your tenants in-person for rent collection

Some landlords prefer collecting rent from tenants by personally visiting each tenant. Although this ensures that you receive full payments immediately when due, this activity also demands a substantial amount of time.

Another great benefit of personally collecting rent is that the tenants always know when you are supposed to arrive and so they stay ready to pay off their rental obligations.

However, the disadvantage of this is that tenants could deliberately remain unavailable at such time, requiring you to revisit them for rent collection.

 

5. Property managers, management companies, and consultancy firms

The best, most reliable, and convenient of all rent collection methods is to outsource the entire thing to a property manager or consultant, property management company, or a property management consultancy firm.

These persons and businesses have dedicated staff as well as efficient and effective procedures for timely and full rent collection. This ensures that your rental income receivables reach you or your bank account on time and there are rarely any delays.

In addition to rent collection, the best property management consultants near me such as Attorneys Real Property Management offer a ton of other services to landlords as well. This helps landlords to manage and take care of various aspects of their real estate properties and property investment business.

 

 

Final thoughts

The things that you should be most concerned about when choosing any of the above-mentioned rent collection methods are convenience and documentation.

The rent collection method should be convenient for both you as a landlord and your tenants. Likewise, it should also be easy to document and keep track of all payments that have been received. Proper documentation avoids any confusion as to whether any rent due was received or not and whether it was received on time or is subject to any penalty or surcharges.

If you are having trouble finding the best way to collect rent from your tenants, our expert property managers can help you out. Attorneys Real Property Management offers services and legal consultancy in various matters related to real estate property management.

Our team of property management consultants covers a wide scope of areas in real estate management services and can offer relevant help to suit your precise needs.

Book your free consultation session now at this link or simply give us a call at (800) 481-4049.