Are There Options for Automatic Rent Collection?

The time when landlords would go door to door to collect a cash payment for rent is long gone. Not only can it be seen as dangerous to carry so much physical money on your person, it usually means you need to take an additional trip to a bank to deposit it. Technology now offers a number of options to automate this process.

Today we’ll go over the three primary options landlords can use to collect rent automatically.

Rental Apps and Software Platforms

One of the options for collecting rent automatically include rental apps and software platforms that are typically best suited for independent landlords or investors with small portfolios. These applications include:

• Zillow Rental Manager
• Stessa
• Azibo
• Avail

Many of these apps allow landlords to invite tenants to pay online through automated clearing house (ACH) transfers, debit cards, or credit cards. ACH transfers is a nationwide system used for electronic money transfers between both party’s banks and credit unions. Many platforms may also offer online rent collection alongside expense tracking tools, tenant screening and lease management. Many of these are great tools for new landlords or landlords with a small number of rental units as they provide cost effective automation.

Peer to Peer Payment Apps

Some landlords opt for using banking apps or peer to peer payment apps that offer either direct deposit options or recurring monthly transfers. These applications are generally more simple and lack property specific features, though they are more easily accessible to most tenants. Apps like Venmo and Paypal allow for recurring payments as well as tracking within the app, whereas Zelle allows its users to send money directly between bank accounts. Additionally, many tenants prefer to use Zelle as many tenants have it already integrated into their banking apps.

Tenants may prefer these options simply because they are familiar, quick and likely already installed on their smart phones. Unfortunately, they’re not equipped with lease enforcement tools, reports or formal rent ledgers. Landlords with a limited number of units can use this system to keep their tenant using systems they’re familiar with, though for portfolio growth, rental specific platforms are generally seen as more appropriate.

Dedicated Property Management Software

For landlords and investors with more experience or larger portfolios, it’s good practice to invest in hiring a dedicated property management company. Using this structure, landlords use the available resources provided by the property management company including the technology that comes built into their service. 

Full service property management companies will typically use a dedicated management software to automate rent collections, late fees, and accounting. They oversee recurring rent charges and monitor payment status while providing landlords with comprehensive reports. This approach provides landlords with structure and consistency while tenants receive professional communication and access to online portals. Investors should receive monthly statements and reports about expense  tracking, income and year end documentation for tax purposes. 

Although this can seem like an expense, remember that hiring a property management company should be seen as an investment. One that can not only make collecting rent easier, it can help landlords reclaim their time. Time that can be used to grow your portfolio, or to spend doing what you love.

Various options exist for automatic rent collection, though each option has trade offs in convenience, recordkeeping or tenant preferences. Understanding how these tools differ helps landlords choose the best fit for their portfolio. If you’re looking to invest in a property management company or if you need help managing your Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online.