Collecting rent is just one of many tasks property managers must deal with, but it’s an incredibly important one. After all, rental income is what keeps a property out of the red and enables owners to stay on top of maintenance issues. But if you’re still among those who accept physical rent checks, either in person or through the mail, you could inadvertently be hindering your own ability to compete and grow. Let’s take a look at a few of the biggest reasons online payments are the way to go.
Some things in life are beyond our control, and the postal service is one of them. Unless your tenants are willing to pay extra to have their rent checks mailed priority, there’s really no way to guarantee they’ll arrive on time. And the later you receive that money, the more it impacts the property’s cash flow.
Once you receive a physical check, you then have to process it, deposit it and wait for it to clear. In most cases, this can take several days. So, imagine the mail arriving late, and now you have to wait an additional 3-5 days for the money to actually be available in your account. Again, this directly impacts cash flow.
Physically processing rent checks requires a human touch, which means either you will be tasked with allocating your own precious time to doing so, or you’ll have to pay someone else to do it for you. In either case, this isn’t an optimal use of resources.
When you accept rent in the form of a check, you inherently increase the risk of something adverse happening, such as that check bouncing. This can be time consuming and costly. There’s also an increased risk of potential fraud, which can take weeks to discover and result in an expensive headache in the long run.
These days, many people actually prefer to pay their bills electronically – especially those from the younger generations. It’s easier, faster and much more convenient. It’s also better for the environment. If you don’t offer the option of online payment, you could be inconveniencing your tenants without even realizing it.
Now that we’ve highlighted some of the major downsides to accepting physical payments, let’s quickly go over several of the reasons switching to online payments makes more sense.
- Improves cash flow because the funds are in your bank account instantly.
- Easily accept many forms of payment
- Provide more convenient options to tenants
- Removes the risk of postal or banking delays
- Enhanced protection against fraud
- Saves time by eliminating the need to manually process payments
- Reduces the occurrence of late payments