Cash, check, or money order, or PayPal?
This is what new landlords in the U.S. have to decide after setting up a rental property. Your rent collection method has a big impact on the financial performance of your Saratoga property. The right method(s) will not only make it more convenient for your tenants to pay you but also go a long way in enhancing tenant satisfaction and retention.
So, how do you choose the right method for your property? Do you go with traditional methods because they're tried and tested or should you evolve and settle on new-age methods?
Here's how to pick the right methods!
Know Your Tenants
80% of rent payments are made in cash, check, or money order. You might want to stick to what already works, but don't do so without considering who your tenants are. That's because age has an impact on consumer payment method preferences.
Imagine you have an 18-year-old tenant today. Would it be smart to ask such a tenant to pay rent via check, something they might have never seen?
As such, knowing your tenants and their age demographics is key to choosing a suitable rent payment method. If most of your tenants are seniors, you're good with cash, checks, and money orders. But if they belong to the younger generations, you need to offer online rent payment methods.
Your Personal Situation
Different rent payment methods present unique challenges to landlords. If you're accepting checks only, for instance, it means you need to be able to collect them from the tenant and bank them. If they're coming by mail, you still have to be available to collect them from the mailbox.
Therefore, consider your availability and how easily you can access the property when choosing a method for rent payments. If you live abroad, you don't want to deal with physical methods of rent collection, since it would mean being available to handle the cash. Digital payments would suit you in this situation since you can receive payments regardless of your location.
Cost
Like all landlords, you want to maximize your rental income. This means taking steps to minimize your operating expenses.
When choosing a rent collection method, you want to look at how much it will cost you, and whether the cost is worth it in the long-term.
Cash is the least expensive method for collecting rent since there are no transactional charges involved. However, you have to look at the time it will cost you to collect the cash and bank it. Some banks allow customers to bank checks at no cost, but other types of payment will typically attract a processing fee.
Get It Right With Rent Collection
After working so hard to invest in a rental property, the last thing you want to worry about is rent collection. That's why you need to find the most ideal payment options for you and your tenants.
But if that sounds like too much work, you can always outsource the job to a local property management firm. Veno Properties can help you with rent collection and a lot more, including property marketing, tenant screening, and maintenance. Serving landlords in the Capital Region, we use cutting-edge technology to offer the best property management services.
Talk to us to get started.
