Many people resist change, and understandably so. Don’t fix it if it isn’t broken, right? This is especially true when it comes to landlords requiring tenants to pay rent by check. But the hesitation to use online rent payments could actually be costing you not only wasted time, but also money.
We did a little research to determine how collecting rent online can provide a whole host of financial benefits at no cost to you.
Online rent payments reduce man-hour costs
Ask yourself how much time you or your employees spend processing checks. You have to collect them. You have to deposit them. You have to track them. If you pay someone to do all this, this is money spent that you could be saving. You can use these labor cost calculators to determine just how much you can save.
Even if you do all the work by yourself, your time is still worth something. It is time that you could spend doing something more profitable, either for your business or for yourself.
With online payments, you can also save time collecting late fees. The software does this for you automatically, based on a grace period you decide (or none at all). It also manages your tenant’s security deposits and other one-time payments, keeping these payments separate from rent. Plus, you can maintain historical payment records. All this makes managing your business easier and cheaper.
Online rent payments mean fewer missed payments
Sometimes tenants miss rent payments unintentionally. They simply forget to pay for any number of reasons. But with online payments, tenants can schedule rent payments automatically. They can also receive monthly email reminders when the rent is coming due.
Online Rent payments mean no more returned checks and their fees
By collecting rent online, you no longer have to deal with returned checks and their associated fees and all their hassle, which includes often being unable to evict tenants because of this behavior. All of this adds up to savings for you.
Online rent payments create a marketable amenity
People are using checks less and less. This is particularly the case with younger renters, many of whom have never written a check in their lives. By offering online payments (and publicizing it) you are giving yourself an advantage over your competition. This, in turn, will lead to a higher occupancy rate and more money in your pocket.
Other benefits you can market to tenants include the ability to split rent payments between roommates and the option to report on-time rent payments to credit bureaus. The latter is a free service that can help tenants build their credit histories, and it will give them added incentive to pay you on time.
Online rent payments improve cash flow
Checks take time for you to process and for the bank to clear, which can take up to 7 days, but online payments reach you within two business days. You can use this cash flow calculator to determine how cash flow affects your business.
Improved cash flow gives you greater financial flexibility, especially if you need to make payments yourself near the beginning of the month, such as a mortgage payment on your property. Having cash on hand as opposed to not having it could be the difference between paying your mortgage on time or not. The latter of which could dramatically affect your credit rating.
Other benefits of online rent payments
Online rent payments are also completely secure, and not only do they not cost you anything, but they cost tenants as little as $1.95 per month if they pay by bank transfer. Tenants also have the option of paying with a credit or debit card.
There are no good reasons for not accepting rent online, but many good ones — all of which can considerably improve your bottom line.