As a single-family rental property owner in Wilmington, the matter of how to secure your rent payments is easily one of the most important decisions you need to learn. But knowing which way to go can be a challenge. There are multiple options for property owners, including cash, check money order, and online payments and each one of these payment options has both pros and cons. When you compare the different forms of rent payment, you can see which one fits best for you and your tenants.
Rent payment methods are often selected after running it through several competing priorities. For example, as a property owner, your priority would be your tenant’s ability to pay their rent consistently and on time. This would make you prefer using a method that allows you to receive the funds quickly. On the contrary, tenants would prefer both convenience and keeping their information secure. By learning more about each type of payment method, you can see how each of them addresses (or ignores) the different priorities.
Some property owners ask their tenants to pay rent in cash or with a personal check. They will need to visit their tenant personally to collect the payment, have the tenant deposit the funds in the owner’s account or ask the tenant to send it to them in the mail. But while cash payment is the fastest way to receive funds, it is also difficult to document. Without a paper trail, dishonest tenants would have to only claim that they paid in full and you’d be in a bind because you couldn’t verify the amount that they paid.
Personal checks create documentation of amounts and dates paid but are also problematic in some ways. Checks deposited can bounce, resulting in bank fees. Then you’ll have to go back to the tenant for another method of payment and it would be so much of a hassle. There’s not much you can do right away if a tenant puts a stop payment on a check. It’s just going to create delays in your cash flow.
Money orders or cashier’s checks seem like a good choice, and for a good number of property owners, they are. Money order or cashier’s check facilitates the quick transfer of the rent payment into your account since they are cash-equivalents and are treated just like cash. But unlike cash, they leave a paper trail that can be used to quickly resolve disputes. As a rule, they do not bounce like personal checks, and they can also be sent through banks, post offices, and convenience stores. A drawback to sending a money order or cashier’s check is that your tenant would be required to go to one of these locations. They might not like the added inconvenience. Purchasing either of these options still requires the tenant to pay cash. On top of that, they often have to pay a fee. This fee gets added to the cost of the trip to the bank, and now you have an option that is more expensive than it should be.
With the technological progress in today’s culture, online and mobile payment methods are turning into the new normal for rental payments. Paying online makes it convenient for tenants and may encourage more timely rent payment. But tenants are also concerned about another thing— the security of their personal information. They don’t really want to type in their personal banking information on a website. Now, if you use a secure online payment method, you can ease your tenant’s fears a bit. However, they do charge fees. Venmo and Zelle, online payment options that don’t charge expensive fees and don’t require banking information, are becoming the top choice among property owners and landlords.
One option to consider is hiring a Wilmington property manager who will collect rent from your tenants for you. At Real Property Management Champion, we take collecting rent seriously. We do it in a systematic and timely way. As a national franchise, we have the ability to offer tenants a variety of convenient ways to pay rent. We can even set up an incentive program to encourage them to pay on time. Our collection process is tough but fair and built upon the foundation of mutual respect of each other— especially towards the tenants. Please contact us online or call us at 910-782-4488 to learn more about how we can serve you.
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