How To Collect Rent Payment

How To Collect Rent Payment

Posted on September 5, 2017 by pmtadmin

So you finally have your perfect rental property, and, after an exhaustive search, it looks like you’ve
found your perfect tenant. Time to sit back and let the revenue roll in.But there is one more step. It sounds simple; so simple, in fact, that it’s easy to overlook: how do you
collect the rent? While pre-authorized debit is becoming more popular for rent payment, the most
common choices are by cheque or by e-mail transfer. Which is best for you? Assuming, of course, that
you haven’t decided to allow a property management company to deal with things like rent collection
on your behalf.
The decision may not be entirely in your hands, of course. Your tenant may prefer paying by one
method or the other, and going along with that is usually the easiest path. But if you have a choice, is
one method better suited to you?
Many people prefer the old-fashioned security of being able to hold a cheque in their hands. Deposit in
the bank, bingo, done. The bank clears the check, and you have an instant record of the transaction.
And, of course, it’s also possible 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 otherwise
unavailable.
But cheques also come with certain requirements. First of all, you have to arrange to pick up the
cheque. Do you arrange to meet your tenant once a month, do you have them mail the cheque to you?
Both involve a certain amount of inconvenience or unreliability.
There’s also the question of immediacy. Even if you can arrange to pick up the cheque on time, even if
it’s mailed in advance, there’s a delay while the cheque clears. And if the cheque bounces, as sometimes
happens even with reliable tenants, that will create further delays, although the additional fees will be
borne solely by the tenant.
As well, the fact is that on-line banking and demographic changes are slowly phasing cheques out.
Many younger tenants, especially students, may not, in fact, even have a chequing account any more.
Many people prefer to do all their banking online these days.
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 acquiring a password from your bank
that will allow to access your accounts online, and providing an e-mail address that tenants can use to
send you money. The entire process should take less than five minutes, and then you’ll be able to
receive payments simply by receiving an e-mail notification and logging into your bank account online.
There are a number of advantages to this. Payment is immediate. As soon as you accept the payment
online, it’s credited to your bank account, and an electronic record will be created. No waiting for
cheques to clear. And because it’s online, you can check payment status from wherever you may be,
even if you’re out of the country. Because it’s done online on both sides, there’s no need to make
arrangements to pick up a cheque. All either party requires is online access and a computer or
smartphone.
Of course, if your tenant doesn’t have access to the internet on that particular day, there may be a delay.
But such lack of access is increasingly uncommon and is unlikely to be a regular occurrence.
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. You may not use it immediately, but if you’re going to own rental units in
the future, it’s almost inevitable that a tenant will ask to pay by that method. Being a landlord may be a
time-honoured profession, but technology changes every profession. You might as well be prepared for
the inevitable.