Collecting rent is a critical part of your investment strategy as a landlord. Your cash flow and your return on investment depend on the timely collection of rent from your tenants every month.
If you’ve done a good job screening tenants and you have a good relationship in place with open communication, you shouldn’t have any problem getting your rent paid on time. We have found that offering your tenants multiple ways to pay rent can also provide extra convenience for them and a higher chance that you won’t have to worry about late rental payments.
Following are potential rent collection methods for your Nashville rental property; and some commentary on best practices.
In this age of digital currency and payments, paper personal checks might be considered an antiquated payment option. There are several downsides to accepting this form of payment including it getting lost in the mail and insufficient funds (i.e. “bad check”). Often, you won’t know the check is bad for several days after it has been deposited. If you decide to accept personal checks, you should be fully aware there are less risky and more convenient options, for both parties.
Cash Rental Payments
We don’t recommend accepting cash for the payment of rent. Even if you provide a receipt, it’s difficult to track and then you’re left with a large sum of cash that must be deposited. There are convenience stores that will accept cash and then transfer the money to you electronically. Check into programs like those offered through 7-11. You can also offer to accept money orders or cashier’s checks as an alternative to cash.
Online Rental Payments
The easiest and most convenient way to collect rent is online. Nearly every product and service can be bought and paid for online these days, and rent is no exception. Most good Nashville property management companies have an online platform where tenants can easily schedule recurring payments or submit their rent at any time or from any place. It’s secure and efficient, and tenants love the ease of logging on from wherever they happen to be to take care of the payment. They pay with credit or debit cards or link to their bank accounts.
Most independent and self-managing landlords don’t have access to the property management software that we have, so accepting online rental payments may be more complex. However, there are plenty of platforms that can still be used. Maybe you can offer PayPal or Zelle to your tenants. Or, if you bank at the same place you can set up a transfer between accounts.
The most important thing in rent collection is to have a clear policy. Make sure your tenants know when rent is due, how much is due, and how they’re expected to pay. Be clear about grace periods and late fees as well.
We’re experts at collecting rent on time. A vast majority of Omni’s tenants pay rent through their online portal provided to them. This portal offers several options including one-time payments which automatically post to their rental ledger in real time, connections with bank accounts, and they can even “set” their payment and forget it. Certified funds (money order, cashier’s check) is the other option if not paying electronically. These methods drastically minimize the possibility of bad payments and offer enormous logistical conveniences for all parties. This combination positions us to collect rent more quickly and accurately (without potential funding issues down the line); and creates a scenario where our tenants enjoy the ease of paying their rent with the click of a mouse or tap on a screen. If you have any questions about collecting rent from your Nashville tenants, please contact us at Omni Property Management.