Collect rent online. I mean, why not? In the digital era we live in, having tenants drop off rent payments to an office seems like such an archaic an inefficient way to do things.
As a landlord, it’s likely the vast majority of your tenants will be ‘millenials’ born sometime between 1980-1999. Growing up in a digital world, millenials are more inclined to use technology to make payments instead of more traditional ways like cash or check.
According to Payfirma (see snippet of their infographic below), 62% of millennials would be comfortable connecting their payment info to an app from a retailer or service they use frequently.
Collecting rent payments online allows you to appeal to your target audience (renters) & handle rent payments more efficiently.
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Getting The Right Software In Place to collect rent online
It’s best to subscribe to a property management software that includes a feature where you can collect rent online instead of just sending your tenants something like a Paypal link. Here are a few reason why:
- Online rent payments are recorded and accounted for
- Tenants can see online rent payments in their lease ledger
- Tenants can set up one-time or recurring online rent payments
- Tenants receive a payment receipt
Here are some software solutions you might consider:
Ways To Collect Rent Payments Online
There are a number of ways you can collect rent online which include the following:
- Credit card payments
- Debit card payments
- Paypal payments
- ACH payments (also known as EFT & eChecks)
- Electronic cash payments
Let’s explore each of these in a little more detail.
Credit, debit, & paypal online rent payments
With credit, debit, & paypal online rent payments, it can take several days to receive your funds, and you’ll have to pay a processing fee likely in the range of 2-3% of the transaction amount.
ACH, EFT, eCheck payments
When you collect rent online with ACH payments, the upside is that the transaction fee is very small – maybe 50 cents – if there is a fee at all.
The downside is there will likely be a delay in withdrawing the money from the tenants account. So, while the tenant may have the money in their account when they process the payment, they may not have sufficient funds in their account when the money is actually withdrawn. This can result in payments getting declined due to insufficient funds.
Electronic cash payments
When you collect rent online via electronic cash payments, tenants can pay cash at a CheckFreePay® location. The cash payment is converted into an electronic payment that goes into your bank account quickly. Using software like PayLease is recommended.