7 Simple Ways to Collect Rent From Tenants

by Erica Sweeney | Published: Nov 5, 2021

Receiving rent payments quickly and on time is the most important aspect of owning a rental home. When it comes to how to collect rent from tenants, you have several options.

First, you need to decide what payment methods you'll accept from your renters. Electronic rent payments can be more convenient and less risky. After set-up, electronic payments require little effort on your part, and you won't have to worry about the money getting lost or funds not being available. Your tenants will likely prefer electronic payments, too. A study by NTC Texas found that 83 percent of people want to pay their bills online.

Even if you prefer electronic payments, it's a good idea to also accept cash or check payments in some cases to avoid the possibility of discriminating against tenants without internet access or bank accounts. Keep in mind, though, that cash and personal check rent payments can be risky. Cash is easily lost, and it can be challenging to keep track of should a dispute arise. With a personal check, you won't know if the funds are actually available until you deposit them. A bank-issued cashier's check is a safer option, as the bank withdraws the money from an account when they issue the check.

Once you've decided on your preferred payment method, next decide how to collect rent from tenants. Here are seven ways to get your monthly rent:

1. Collect rent in person

If you live near your rental property and don't mind swinging by every month, this way of collecting rent might work for you, especially if your tenant is paying by cash, check or money order. The upside of collecting rent in person is that you'll have the money in hand— plus, you'll have a chance to scope out your rental regularly. Just be sure to give your tenant a receipt.

The downside is that it takes time and it can be a pain to coordinate picking up the rent. So, if you plan to collect rent in person, it's a good idea to require tenants to pay via cashier's check or money order since you won't be able to verify that a personal check is valid. Renters can get a money order from the post office or bank, and they pay a cashier the exact amount of rent and receive a money order for that amount.

Man writing a check

2. Set up a rent drop-off box

Another option is to ask tenants to drop off their rent payments. You can set up a dropbox at your office or another location (it might be best not to give out your home address). Just make sure to put a lock on the box to keep payments from getting stolen. Like collecting rent in person, you run the risk of not being able to verify a check or that enough was paid in cash when they leave it in the box. Also, tenants could be late dropping off their rent.

3. Ask for rent checks by mail

Asking renters to mail in their rent check can be more convenient than collecting rent in person or asking tenants to drop off payments. But it's slower and the check could get lost in the mail. The tenant could also pay late and blame the post office.

To prevent this from happening, ask renters to get a “certificate of mailing" from the post office as proof of when rent was sent. Sometimes, there's a fee for this, though. Consider getting a post office box or having checks mailed to your workplace to avoid giving out your home address.

Woman checking the mail

4. Have a property manager collect rent

A property manager will handle the day-to-day of your rental home, and part of their job is to collect rent for you. They also take care of repairs and complaints. Property managers usually charge rental owners a percentage of the rent — usually around 10 percent — for their services. Many property management companies have their own online rent payment portals for tenants to use and deposit the money in your account on a set schedule.

5. Use an online payment system

Collecting rent through an online payment platform, like PayPal, Venmo or Zelle, is convenient, and many renters, especially younger people, prefer to pay bills electronically. Some systems let you request money from the tenant, or renters can set up payment reminders. But, there are some downsides. The platforms may charge fees, and depending on which one you use, it could take a day or two to get your money. Some also have transaction limits, as well.

Zelle works a little differently. It's connected to your bank account so tenants can send rent payments directly from their account to yours. You just need to make sure both your bank and your tenant's bank use Zelle.

6. Take rent payments via ACH

An ACH is a transfer of funds electronically between banks across the Automated Clearing House network. It includes direct deposits and direct debits for payments.

Collecting rent via ACH is convenient and secure since everything goes through your bank. But, there will likely be fees to set it up and monthly charges, depending on your bank, and it can take a few days for the payment to process. ACH usually requires a one-time set-up for you and your tenant. It's a good idea to contact your bank to get more details about how the process works and how much it will cost.

Man paying bills online

7. Use RentPay

Collecting rent through RentPay can help you get paid quickly and on time. The service lets you accept payments via credit card, debit card and e-check — just link your bank account. It's free for property owners to use, while renters pay a 3 percent transaction fee for debit or credit cards and $2.95 for e-checks.

If you have one or multiple properties, you can keep track of rent payment history, including when payments were made, who paid and the property address. Payment history is visible for tenants, too, and they'll receive a notification when you receive their payment.

How to collect rent from tenants

Collecting rent seamlessly and on time each month is key to your success as a rental property owner. After all, you need the money to cover the expenses of owning a rental home. There are several ways to collect rent from tenants, so choose the one that works best for you and your renter.

Categories: Landlords

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