Establishing a method for collecting rent each month will make it easier to keep track of which tenants are current with their rent and which ones are behind on their rent. Each landlord must decide which option works best for their specific situation. Here are five different ways you can collect rent from your tenants.
4 Factors to Consider When Choosing Rent Collection Method
Not every rent collection method is right for every landlord. Looking at these four factors can help you determine the method that will work best for you and your tenants.
1. Number of Tenants/Rental Units:
If you have own 20 rental units, you probably don’t want to personally knock on 20 doors to collect rent on the first of every month. You will want a more streamlined and efficient way to collect rent.
2. Distance From Rental Property:
If you live far from your rentals, hiring a third party to collect the rent or doing an electronic funds transfer may be better options for you.
3. Desire to Interact With Your Tenants:
You may only have two rental units and may live less than a mile from your rental property but prefer to have a more hands-off approach to managing. In this case, an electronic funds deposit or the mail may be the best ways for you to get your rent.
4. How Comfortable You Are With Technology:
If you are not comfortable with technology, you may prefer to collect the rent in person.
Methods for Collecting Rent
There are several different ways you can collect rent from your tenants. These methods include personally collecting the rent, as well as outsourcing rent collection to a third party. Below are five options you may way to consider. When you decide on a rent collection method, you must include a clause in the tenancy agreement that clearly explains the rent collection procedure.
1. Collect Rent Online:
One way of accepting rental payments is online. This requires the use of online resources, like www.silqu.com that is leading the way in providing solutions to this industry.
This is a sector that is now being offered various options of online resources like m-pesa bill manager, eazzy rent and resma.
Prices will vary depending on the plan selected. Some sites or plans are very basic with simple rent collection being the only service offered. Other sites may have more bells and whistles with services that could include an online the ability to upload important forms, and documents for your tenants and the ability to send messages to your tenants.
At www.silqu.com we give value and with the creation of an eco-system built on credible and transparent rent collection, that should steadily but surely lead to solving real-estate problems and bridging real-estate with Technology.
2. Collect Rent by cheque:
You can choose to allow tenants to pay via cheque. This saves you the time of having to collect the payments yourself.
This method does have certain issues. For example, a delayed cheque clearance time, bouncing of cheques and the accruing charges, follow up and proper tracing of the payment is cumbersome.
3. Drop-Off of bank slips:
If you have an office for your property investment business, you may choose to allow tenants to drop the bank deposit slips off at a particular location This allows tenants to pay without your involvement with your input being verification of payment. This seems to encourage fraud through forgery of bank deposit slips, resulting in cases where the tenant goes without paying rent for long periods of time and also the amount of paper work that you will be handling is too large for effective data reconciliation.
4. Property managers:
Finally, you could choose to completely outsource rent collection to a third party by property Management Company. Not only can this company collect rent payments for you, but they can also deal with tenant complaints, handle maintenance issues and fill vacancies. You will have to sign a contract with the company and pay an agreed upon amount based on the services you desire. This has proved to be built on relationships between the property owner and the property management company, and that seems to cover the inconveniences brought by agents through slow adoption of technology.
www.silqu.com considers all factors of inconvenience and addresses them by letting what can be best handled by Technology be, and the part of human input is handled that way, providing an excellent symbiotic relationship that breeds effectiveness and accountability.