Alternative Rent Payment Methods
Cash is slowly becoming extinct, and most landlords are now hesitant to accept it as a mode of rental payment. Thankfully, there are a variety of alternative rent payment methods that a landlord can use to get paid, or a tenant can use to pay their rent. The reason why many experienced landlords frown upon cash payments as a method of paying rent is that cash payments are becoming extremely expensive; are prone to theft and fraud, and they consume a lot of time to collect.
The following are the alternative ways to accept rent payments:
Collecting rent by check is one of the most popular methods landlords use nowadays to collect rent. Though it has its share of drawbacks, every other method of rent payment has its drawbacks as well, and, the advantages of using this method to receive rent payments far outweigh the drawbacks. Some of the advantages of using a check to receive rent payments are because, unlike many other methods, checks can be mailed. Most professional landlords ask their tenants to mail the check to a management office or a P.O Box, but not their home.
You can be confident that most of the checks you receive are good and may not bounce as it is illegal to pass a bad check. Moreover, if the tenant delays in paying the rent, it is easier to prove by just checking the postmark or the date the check was written. Lastly, in case you’ll need to recover money from the tenant in future, it won’t be a hassle as you know where the tenant banks.
But then, as earlier indicated, this method of rent payment comes with its share of drawbacks. Some of the drawbacks entail the fact that the checks can bounce if the tenant does not have enough money in the bank. And once they bounce, they incur bank fees which you can collect from the tenant by issuing a dishonored check notice. Also, the depositor of the check can stop the check even after depositing it.
But all in all, checks are an excellent alternative way of receiving rent.
You can also receive your rent by money order. The reasons for money order is that money orders are less likely to bounce; they are difficult to cancel; can be easily obtained at the post office or any bank or in many drugstores, etc. Moreover, just like a check, money orders can also be easily mailed. That means you do not have to go checking on your tenant every month to demand rent.
The only drawback with the money order way of receiving rent is that it may be inconvenient for some tenants as they have to go searching for a place to buy money orders.
Direct deposit is rapidly growing in popularity as an alternative way for landlords to receive rent. Very many landlords are arranging with their banks, of course with their tenant’s acquiescence, to automatically withdraw certain sums of money monthly from the tenant’s bank account to the landlord’s bank account on a certain day of each month. This is a hassle-free method of rent collection, especially if the tenant has the needed amount of money at the time designated for the transfer.
There are some pros for the landlord when using this method. In addition to being an effortless way of collecting rent, the method is also easy to monitor online, and it is not difficult to set up with many banks. The only drawbacks are that you will need some monthly bank fees for you to maintain the account and you also have to monitor the account so as to ensure the rent was actually transferred.
Credit and Debit Cards
Property management companies and some private landlords are increasingly accepting debit and credit cards as a method of rent payment. That is pegged on the fact that in today’s high-tech world it is so easy for anyone to setup a PayPal account so as to enable them to receive credit card payments.
Moreover, many property management companies own websites that make it easy for their tenants to pay rent online. These online payments save time and the hassle of mailing, and you can verify instantly if the payment has been made. Besides, even if you don’t own a website, you can still use PayPal to bill and send invoices online.
In conclusion, it is important to choose a method that is most convenient to you in your circumstances. No one method is best for all people.