How to Help Your Tenants Pay Rent with Their Phone

Collecting rent shouldn’t be hard. Tenants should pay rent in full and on time, but that’s not always how it goes. Tenants are often late with the rent and sometimes they don’t pay the full amount due.

Is it possible to get your tenants to pay their rent on time? Yes, and the solution is to transition your tenants to an online rent payment system. Here’s how to make that happen:

1. Work With a Property Management Company

By far, the best way to get rent payments online is to hire a property management company. A professional team of property managers will already have a smooth system for collecting rent online.

Using a property management company to manage rent collection will also help you prevent legal issues, especially since landlord-tenant laws are changing rapidly. For example, in some states, landlords can’t charge late fees until rent is five days late. In other states, some eviction moratorium terms have become state law.

2. Offer An Online Payment System With an App

If you choose not to work with a property management company, you’ll need to find a rental payment system. You probably won’t have time to test each system to see which one works best. That means you’ll need to select a system by looking at the features and reading reviews.

While there are probably a handful of features you find important, make sure the system offers a mobile application. Some systems are web-based only. On a smartphone, apps are easier to use than a website. Smartphone users can access websites, but they’re used to applications.

A web-only rent payment system isn’t good enough

People are busy and don’t always have the energy to boot up their laptops just to pay rent. However, most people carry a smartphone 24/7, so using a rent payment system that offers an app makes sense.

3. Offer a Small Discount for Paying Rent Online

Some people will resist paying rent online for a variety of reasons. Offering a small discount is one way to get more renters to pay rent online. Sometimes all it takes is a $10 discount. However, you’ll want to account for any fees required to use your online rent payment system.

If you’re already covering the fees tenants would pay for using the system, don’t make your discount too large. You’ll have to offer the same discount to all of your tenants, including the tenants who already pay online.

For example, if your system charges tenants a $10 fee for each payment, and you’re covering the fees, don’t offer more than a $10 discount to pay rent online. This will be a $20 loss per tenant per month.

Better yet, have your tenants pay the fee and offer a $15 discount, which means they’ll get a $5 discount on rent, and you’ll only lose $15 per tenant per month.

4. Offer Recurring, Automatic Payments

Automatic, recurring payments are great because people forget to pay their bills. Find a rental payment system that offers tenants the ability to set recurring, monthly payments.

There are several popular rent collection platforms, but not all offer recurring payments. Buildium is one platform that does offer recurring payments but charges a fee for all transactions.

You might have to cover the transaction fees, but if that’s what it takes to get paid on time, it’s worth every penny.

5. Don’t Use PayPal to Accept Rent Payments

You might think it’s easier to have tenants PayPal you their rent, but that isn’t the best idea. PayPal wasn’t created for rental payments, so you won’t get stats or analytics regarding your rental income as you can with rent payment platforms.

PayPal payments are informal and might make tenants feel like their rent payments are casual. Also, you can’t set the rent amount. Your tenants can short you on the rent, intentionally or accidentally.

When you’re trying to evict a tenant, you can’t accept any rent payments or you have to start the process over. Allowing tenants to send rent through PayPal can halt your legal ability to pursue an eviction if you don’t reject the payment immediately.

With a proper rent collection system, you set the monthly amount each tenant must pay. You can also add late fees. With an online system, tenants can’t pay partial rent – the total must be paid in full.  

Collecting Rent Online is Easier for Everyone

Collecting rent online makes life easier for you and your tenants. Consider switching to an online rent payment platform. You’ll get paid faster and your tenants will start paying rent on time.

How to Help Your Tenants Pay Rent with Their Phone was last updated December 21st, 2021 by Alex Sanders