Ever had tenants who always paid their rent on time? Such tenants are an asset but are also not very common. For property managers, rent collection is one of the tiresome aspects. More than 50% of Americans make late payments due to job loss, financial problems, or simply because--they forget! And with traditional payment methods, property managers have to also deal with payment defaults and bounced checks.
Online rent payments can eliminate many of these problems. This is true not just for property managers but also for tenants. According to NAA, 79% of tenants prefer to pay their rent online. Apart from this, this article will tell you several other reasons to upgrade to online rent collection.
Simpler payments
Traditional payment options like checks have many time-consuming processes. From receiving the check by mail to finally cashing it at the bank, it usually takes several days. But online payments are simpler. Tenants can pay their rent every month with only a few clicks through their phones. This saves the time of both property managers and tenants. Digital payment methods are also easier to set up, which is why most of the tenants prefer paying online.
Multiple options
One of the common digital payment methods is bank transfer. Apart from that, tenants can choose from several options like debit cards, credit cards, and pay-from-phone services. Some providers also give offers and discounts on transactions made through their apps. Tenants have the flexibility to choose the option most convenient for them. By giving them a variety of options, you can receive more payments on time.
Some property management software also has a payment processing feature. Yardi’s payment processing allows tenants to pay rent through simple browser-based and app-based options.
Real-time tracking
Payment through checks takes a long time to process. There is also a risk of the check bouncing due to a lack of funds. But with online rent payments, there is almost no risk of payment failure. You can receive real-time notifications every time a tenant pays rent. This helps you keep track of all the payments you received. Similarly, tenants can instantly know if their payment is successful. In case of failure, they can try again or choose a different payment option.
Schedule recurring payment
When you have multiple tenants, reminding each of them to pay rent every month is tedious. Through digital payment apps, you can send reminders to all tenants at once. You need to schedule these reminders once, and your tenants will automatically receive them every month. For example, if you collect rent before the 5th of every month, then you can schedule reminders to be sent on the 1st. This reminder is repeated so you don’t need to set it again every month.
Tenants can also avoid late payments by setting up recurring payments. These options transfer the rent every month through credit cards or account transfers.
Go paperless
Online rent payments do not require any paper invoices, receipts, or any other paperwork. According to The Chicago Tribune, 2.2 billion sheets of paper are used for mortgage paperwork alone. You can reduce the environmental impact of the real estate industry by using digital send invoices and receipts. Most online payment methods generate e-receipts and avoid unnecessary use of paper. Accepting online rent payments is one of the essential steps to a paperless real estate industry.
Secure rent payments
A 2020 report by Wall Street Journal states that check frauds make up 47% or $1.13 billion of the total bank frauds. Checks contain a lot of confidential information which can be easily stolen. Online payment gateways are more secure as sensitive information is not public. It is also easy to track all the transactions made online. So if a tenant has not paid rent, then you will have proof. It will also ensure that any payment is not “lost”, which is also a common reason cited for late or missing payments.
Minimal errors
If you have multiple tenants, you might lose or mishandle a check. It is also difficult to keep track of the tenants who have paid and those who have not. Or you might have missed collecting the late fees. In any case, checks are prone to simple errors. But with online payments, all the transaction details are recorded. You can check your account to know who has paid and at what time. You can also spot tenants who have been regularly missing payments. By using RPA tools and accounting outsourcing, you can easily organize the transaction records of your properties.
Transparent rent collection
If you have increased the rent or want to collect late payment fees, you can do so easily online. You can provide a breakdown of the rent to the tenants for better clarity. With online platforms, you can also maintain a record of the late payments, rent increases, and any other charges paid by tenants. This will make the system more transparent as every transaction is accounted for. For example, if a tenant has missed their rent payment, you can add late payment fees to their regular rent through rent collection apps.
Apart from general online payment apps, property management software also has features for online payments. These platforms have additional features such as scheduling recurring payments and managing financial data. For the real estate industry, choosing software specific to property management can make the process much easier.
How Assetsoft can help
Liked the idea of going digital with rent payments? Assetsoft can turn this idea into reality. We aim to help our clients automate their property management processes through software integrations. Some of our most popular platforms like Yardi and MRI software have their own payment processing tools. Some also have individual tools intended for rent collection. We can help clients decide the best software according to their requirements. Assetsoft understands that no two businesses are alike and hence, provides custom software integrations through platforms like UiPath. We also provide outsourcing services for finances, back office, and software support.
To know more about our services, book an appointment with Assetsoft!