Blog Post

Pros and Cons of Different Rent Collection Methods

Dustin Edwards • January 11, 2023

Rent Collection Methods Have Positives and Negatives

When the first day of the month rolls around, it’s time to collect rent. Whether it’s your first time collecting rent, or if you are interested in changing how you collect rent, there are many methods you can choose from. Read on to discover the pros and cons of these rent collection methods.


Paper Checks

Paper checks are a great choice because they are secure, reliable, and convenient for you and the tenant. Check payments are made directly from the tenant to you and provide a physical record of the payment. Checks also remove a third party from being involved in the transaction, which will help you avoid unwanted fees.


One of the biggest drawbacks to collecting rent by checks is the time it takes to process each check. Processing a paper check requires several steps, which can be time-consuming and costly. Also, paper checks carry a risk of being bounced, which can incur additional fees for you. Like cash payments, checks can easily be lost or stolen.


Online Payments

The major positive of online payment for rent collection is convenience. Tenants can pay rent quickly and easily online with just a few clicks. This saves time, energy, and money that would otherwise be wasted on having to mail or deliver the rent check in person. Online payments also eliminate the need to keep large amounts of cash and checks on hand, which can be a security risk. 


Online payments are also accurate, can be tracked in real-time and tenants can be notified when their rent has been received. This eliminates the need for you to manually check for payment accuracy, such as if the amount paid is correct.


One of the cons of collecting rent by online payment is its potential for fraud. In an online payment system, tenants must provide their financial information which is vulnerable to being hacked or stolen. Also, you may have to pay fees for an online payment system, which will add up over time. If you’re on a tight budget, these fees are less than ideal.


Automated Payment

Automated payment systems, such as Zelle or Venmo, make it easy to collect rent every month without having to manually process payments. You can set up the system to collect rent on the same day of each month and tenants can set up their payments just once so that their rent is paid on time. Automated payments also provide you with clear records that can be used for tax purposes or in the event of a dispute with a tenant.


One of the drawbacks of automated rent payment is the lack of flexibility it provides to tenants. Some tenants may not have access to a payment system that allows for automated payments.


Cash Payments

One of the biggest pros of cash payments is the ability to track and keep your own records. When tenants pay you in cash, you can easily store the money anywhere you like and keep track of who has made payments. Also, collecting rent by cash removes the possibility of bounced checks or other issues that can arise with other forms of payment. It also eliminates the need to pay any processing fees and provides you with immediate access to the money.


The main risk of collecting rent in cash is the possibility of theft or loss. Cash offers no safeguards for you if the tenant doesn’t make a payment, as there is no record of the transaction. Cash is also much more difficult to track than other forms of payment, such as checks or electronic transfers. Another con of collecting rent by cash is the potential for accepting counterfeit bills, which can result in a loss for you if you don’t catch it in time.


Conclusion

Ultimately, the best rent collection method for your property will depend on your specific needs and preferences. If you’re looking for a fast and secure method, then online payments might be the best option. If you’re looking for an automated system that requires less in-person contact, then automated rent payments might be the best choice. If you have more questions about what may be the best way to collect rent, consider calling us at (562) 888-0247, or feel free to fill out our free rental analysis to see what your rental could yield today.

Share this post

By Dustin Edwards January 17, 2025
A new year is a new chance to start new ideas to bring in prospects to your property. Consider the following 5 ideas to engage prospects and get new tenants.
By Dustin Edwards January 10, 2025
Having clear communication with your tenant is essential for maintaining a healthy landlord-tenant relationship. By being transparent in all relevant interactions, landlords can prevent misunderstandings while resolving repairs and disputes efficiently while improving tenant satisfaction. Having good communication with your tenant is beneficial for landlords too. Effective communication also protects your investment property. Remember that while your tenant is living in the property, landlords need to take care of the repairs. Below are the three best things to do during tenant communications. Prompt Responses Addressing tenant concerns quickly is essential for building trust and maintaining a positive relationship. Tenants feel valued when landlords respond quickly, knowing that their needs are being prioritized. Building this trust not only enhances your tenant’s satisfaction it lowers the possibility of conflicts or misunderstandings to arise. This ultimately creates a healthy and successful rental experience for you and your tenant. Some of the most common inquiries will oftentimes include repair requests, among others. As an example; if your tenant reports a leak under their faucet and the repair is delayed, this can be damaging to your landlord-tenant relationship, as well as your property. If left ignored, that leak can result in hundreds of dollars in water damage and a vacancy . Which can further affect our bottom line negatively. For landlords with multiple properties, this can become difficult to keep track of. A property manager can help with scheduling repairs and communicating with your tenant on your behalf. Document Everything Keeping a detailed record of all interactions with your tenant is an important element when managing a property. There are many choices for documentation including email, text, or written notices. Although many property management companies and landlords have opted to use apps or dedicated tenant portals to log communications. A great example, for instance, a tenant may claim they’d reported a repair issue that was never addressed, if everything is to be documented, both you and the tenant would have a copy of the request. Maintaining transparency with tenants. Having thorough documentation ensures agreements and requests between all parties are clearly tracked. Documenting communications with your tenant provides landlords with a foundation for addressing misunderstandings, or disputes if and when they arise. Provide Regular Updates Regular updates show tenants that their landlord is organized and has an attentive approach to managing their property. Giving tenants ample time for maintenance, inspections or policy changes is a simple way to build trust with your tenants while showing your professionalism. Giving tenants advanced notices reassures them that you’re aware of how changes can affect them and you understand that time might be needed in order to adjust. Surprises are best kept for birthday parties. Proactively notifying tenants of changes helps clear the communication channels and minimizes disruptions which helps tenants feel valued and satisfied. These small yet consistent efforts can contribute to a positive tenant stay, which can encourage lease renewals and long-term tenancy. Additionally, having a good relationship with your tenants can give you a great reputation which can provide you with leads when looking to fill a vacancy . It cannot be understated the importance of communication for a healthy landlord-tenant relationship. Even if your tenant may not agree with some of the decisions a landlord needs to make, by giving your tenants ample time to process the change tenants generally are more accepting of said change. If you’re having trouble communicating with your tenants or if you need help managing Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online .
By Dustin Edwards January 2, 2025
Keeping tenants safe, translates to happy and long-term tenants. Read to discover 5 Inexpensive ways to keep your tenants safe.
Show More
Share by: