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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.

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By Dustin Edwards November 18, 2024
Be aware of these 3 common issues when the rainy season arrives at your rental property.
Cold weather can come fast and strong so it's best to ensure your property is ready for this climate
By Dustin Edwards November 12, 2024
It's important to prepare your rental properties for the colder weather. Although we don’t need to prepare for snow and freezing temperatures, we do need to prepare for the cold and rain. By ensuring your rental is cozy inside and prepared for the fall season , you can not only reduce energy costs for your tenant but also maintain your rental property value. Today, we’ll go over three signs your property is ready for this upcoming cold weather.  Sign #1 Proper Weatherproofing During the colder seasons, it's much easier for a tenant to notice any cold spots in your rental. Well-insulated doors and windows can not only help maintain the warm temperature but also prevent it from lowering. It can also prevent cold spots and drafts, which can help with tenant satisfaction . Doors and windows should be properly sealed and insulated to prevent drafts and maintain proper temperatures. A visual inspection of the weatherstripping around doors and windows to ensure they’re intact is a great place to start. If damaged, consider replacing them, as trying to seal gaps can be tricky and rarely lasts. Other seals should also be checked, as well as any areas that need to be caulked in order to keep cold air out. Insulation during the summer helps keep the cool air in, and during the winter, insulation in the halls and attics helps retain desired heat. Hot air rises, and if there isn't adequate insulation in the ceiling, heat will continually be lost. Luckily, adding insulation to an attic is not uncommon and typically only requires a day or two for installation. Sign #2 Energy Efficiency Measures During the winter, it's not just the cold you need to keep in mind. As days are much shorter, there is less sunlight to keep the rental warm and more hours of darkness. For this reason, it's a good idea to keep energy efficiency in mind when preparing for the cold weather. Energy-efficient lighting or smart lighting helps reduce overall costs since your tenant will likely use electricity to keep warm. Ensure your outdoor lighting is rated for external use, as this can provide crucial illumination during longer nights. Draft guards on doors and windows help reduce the load on your rental’s HVAC system which can significantly improve its lifespan. This is also a great time to replace filters and clean the ductwork in your rental to improve energy efficiency. Additionally, consider installing an insulative film on older windows, which helps retain heat and keep rooms warmer without the need for extra heating. If your rental has a programmable thermostat, ensure it’s in working order, as this can help tenants manage an energy-efficient heating schedule more easily. Sign #3 Property Exterior Southern California is a great place to settle down, and while we don't need to worry about snowfall or deep freezes, ensuring the exterior of your rental property is ready for the cold weather is important. With our cold season mainly bringing with it rain, inspect your rental property’s rain gutter system . Remove debris from drains and check for leaks or signs of wear and tear. Walkways should be clear of debris and well-lit. This may require you to prune and trim trees and bushes that may leave behind leaves. When combined with rainfall, a single wet leaf can cause someone to slip and hurt themselves. Consider adding non-slip mats or tape to areas where people may have tripped in the past. Much like during the hotter weather, it's important for your rental to be ready for fall and winter. By keeping your property ready for any weather Southern California has to offer, you ensure your rental property and tenants will provide steady rental income every month. If you need help preparing your rental for the cold weather 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 November 4, 2024
Owning a rental property in a beach city like Long Beach, CA , offers a number of advantages, like great weather and a strong real estate market. However, the cold ocean breezes can pose some challenges for landlords and tenants, making it convenient for property managers . Although the weather is generally great, these ocean breezes can sometimes make properties drafty and uncomfortable during the fall and winter seasons. Today we’ll go over four measures that can improve tenant comfort and protect your investment from the cold ocean breezes. Weatherproofing Againsts Drafts Drafts are caused by gaps between doors and windows which can make a rental feel colder than it is. This leads to unnecessary energy use and tenant discomfort. Sealing these gaps is not difficult and quite doable for a landlord who doesn’t mind getting their hands dirty. Replacing worn weatherstripping and adding fresh caulking to seal minor gaps blocks air from permeating the property. For additional protection from drafts, you can provide your tenant with inexpensive door sweeps. Improve Heating Efficiency Having efficient heating is crucial to countering the cooler ocean breezes while keeping costs low. Schedule regular maintenance for your HVAC system , such as replacing filters, cleaning vents, and cleaning the compressor to keep it running smoothly. This not only provides more efficient heating, it also extends the life of your HVAC system. Installing a smart thermostat is another way for tenants to adjust heating schedules efficiently. Protect Outdoor Spaces Outdoor areas such as patios, balconies, and even porches can oftentimes be exposed to the coastal breezes. This can be an issue in the long run, especially for rentals next to the beach , as the wind can carry sand and salt, which can accelerate the deterioration of metals, wood, and paint. This can be mitigated by adding windbreaks to the property, such as lattice panels or outdoor curtains, to create a more comfortable and functional outdoor space. Exterior finishes will require more frequent maintenance. This includes resealing wood and metal surfaces. As well as repainting is important to protect against wear from salt, sand, and moisture. Wind Mitigating Landscaping Much like with the curtains and lattice previously talked about, the landscaping can also be used as a windbreak. For example, planting wind-resistant shrubs or trees alongside exposed areas creates a natural barrier. This helps reduce the impact of the gusts of wind hitting the property. Many native plants thrive in coastal climates while also requiring minimal maintenance. While expensive, the results can greatly improve your rental’s longevity and curb appeal. Alternatively, you can strategically place planters to provide protection. Durable Furniture Furniture and fixtures exposed to the cold coastal breezes need to be able to withstand that wear and tear. Choose resilient materials such as treated wood, powder-coated metals, and outdoor-rated plastics. These are less prone to being damaged by the salt or wind. Furniture that is lightweight should be secured or anchored in place to prevent it from being blown away. By investing in durable furnishing, you can provide tenants with a comfortable and functional outdoor space for years to come. Protecting your beach city property from the cold ocean breeze doesn't necessarily require extensive renovations or investments. Try to focus on any relevant feedback from your tenant, this can help you pinpoint what part of your rental needs attention. If you need additional help protecting your rental property from the cold ocean breezes 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 .
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