Landlords are constantly looking for more efficient ways to handle the collection of rent from tenants. While collecting rent in the traditional way via personal check is a comfortable way to handle monthly rent payments, a lot of complications can arise. Checks get lost in the mail or misplaced in the office, or tenants get forgetful and neglect to write that check on the first of the month, forcing you to expend time and energy to track them down.
Online bill payment can take care of a lot of the above problems and benefit both landlords and tenants. But despite how so many tenants pay the majority of their bills online nowadays -- credit cards, utilities and auto payments -- quite a few are hesitant about using the Internet to pay their largest bill. So how does a landlord go about getting their tenants to pay their rent online?
Benefits of online rental payment
As mentioned above, receiving of rent online cuts out the middleman from the tenant-to-landlord-to-bank transaction process. Instead of physically receiving a check, filing it for later deposit, going to the tenant's profile and marking that they've paid, filling out bank account numbers and signing checks for deposit, filling out deposit slips and going to the bank to physically deposit the money; you can accept a payment with one click and transfer that money into a bank account with another. Landlords also can have tenants set up automatic payments linking their bank accounts to the tenants'. So instead of waiting for them to drop off or mail the rent, it can be automatically withdrawn from the tenant's bank account into the landlord's.
As for tenants, online banking saves time and money. Instead of filling out a check and dropping it off or mailing it, just fill out a few things online and authorize payment -- a process that takes seconds, and saves money on stamps. If a landlord accepts credit card payments, tenants can earn major rewards from credit cards by paying rent online.
Tips to encourage online rental payment
There are a few things you can do as a landlord to prompt tenants to use an online bill-pay service for rent.
First, you can make sure that the transaction is free. This is the most important thing. It doesn't matter how little an online fee might be; people will not pay it. The key to promoting online bill pay is to highlight its hassle-free nature. Fees are seen as hassle no matter how low they are, so leave them out entirely.
Allow the use of credit cards. You might be concerned that a tenant paying by credit card is living beyond their means, but as mentioned above, many people pay bills with credit cards to get rewards points. Trust that your income and credit evaluation was sound and let tenants pay rent online with credit -- they'll do it if they think they can get a free vacation from it.
Offer rewards for online bill pay. Whether it's money off a month's rent or a gift card, rewards and prizes will always get tenants eager to participate. Tenants will develop online payment habits this way, and once they get into the habit, they won't go back.
Finally, sell the benefits of bill pay. Send out fliers or emails to tenants describing why online bill pay is good for them and give them a step-by-step checklist that covers how to do it. Do the research for them and answer questions up front. The less confusion about the process, the more likely they'll start it up.
Paying rent online is a mutually beneficial process for both tenant and landlord once both parties get past the initial awkward unfamiliarity stage. If you take the above steps now to get tenants comfortable with online transactions, an efficient and rewarding rent-payment process is sure to follow.
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