How To Collect Rent Payment
Once you have your rental property and have found the perfect tenant it’s time to sit back and let the revenue roll in. But there is one more step. It sounds simple, in fact it’s easy to overlook: How do you collect the rent? The most common choices are by cheque, cash, or e-mail transfers.
Which method is best for you?
Assuming, of course that you haven’t decided to allow a property management company deal with things like rent collection on your behalf. The decision of what method you might prefer best when collecting rent may not be entirely in your hands. Your tenant may prefer paying by one method or the other. Typically going along with what your tenant chooses is the easiest path. But if you have a choice is one method better suited to you?
Different types of payments:
Cheque: Many people prefer to be able to hold a cheque in their hands. Deposit into the bank and be done simple and easy. The bank clears the check and you have an instant record of the transaction. A convenient way of collecting rent payments through checks is to post-date cheques. While you can’t require your tenant to provide post-dated cheques for each month, it is convenient if the tenant will be away on rent day, or unavailable. Checks also come with certain requirements; arranging to pick up the check by either meeting with your tenant once a month or getting them to mail the check to you. Both involve a certain amount of inconvenience or unreliability. By arranging a meetup or having the check mailed in advance can still cause a delay while the check clears. And if the check bounces, as it sometimes happens even with reliable tenants that will create further delays. Any additional fees regarding getting a check cleared, or check bouncing is something the tenant will have to pay. Many younger tenants, especially students do not pay by checks. On-line banking is slowly phasing the checking world away.
Most people prefer to do all their banking online. If that’s your choice, the easiest method is by accepting payment via e-mail transfer. If you’re not already set up to do so, this will require a very simple process of creating a password for the person you are sending money to and by providing their email address. This will allow access to your money via email-transfer. There are several advantages to email-transfers; The process takes less then five minutes to do, payment is immediate, an online electronic record is created, zero waiting time for checks to be cleared, and you can pay or receive payment from wherever you may be.
Deciding on a method of paying rent is usually going to be a collaborative choice between you and your tenant. But given the simplicity of the process, it makes sense to ensure you’re able to receive payment by e-mail transfer.
Need a peace of mind?
Get the right advice and professional help from the ACCL Property Management team today.
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