Online payments benefit landlords by providing faster transactions and reducing the likelihood of fraudulent activity. Streamlining payments is especially crucial if you are responsible for managing commercial properties. For property managers and landlords, this also reduces the time they need to spend matching tenant invoices and payments, as well as following up on late payments.
These days, most landlords require their tenants to pay rent online. For tenants, paying online is a faster way compared to writing a check. But why do landlords prefer to use online payments instead of other methods? Read on to discover how online payments benefit landlords.
Improved Property Owner-Resident Relationships
As a property manager or landlord, tracking rent from tenants, ensuring the tenant is paying the correct amount that accounts for the latest lease escalation or bump, can be time-consuming. However, the collection of rent today is more organized and quicker than ever before, thanks to the growth of technology.
Property managers and finance teams can save time and effort on collecting rent by utilizing automated rent reminders, online payment options, and real-time financial reporting, making the process easier. This will also provide them with useful information about how their overall portfolio is doing. This allows them to focus on other aspects of their business, such as property maintenance and tenant relations. This makes their business run more smoothly and makes tenants happier.
Online Payments Save Time
When landlords do not collect rent online, it is a time-consuming process to manage. You must collect the payments via check, go to the bank to make the deposits, and update your bookkeeping. If you have more than one commercial property, you may perform this process several times. Checks take time to clear, and funds are not available immediately. And if the tenant paid the incorrect amount, then there is the process of reaching out to the tenant to inform them of the incorrect payment, and then making sure that the shortfall is tracked and corrected in future rent payments.
Online payments are simple and significantly cut down the physical time spent collecting rent. Online payments are usually deposited instantly. By decreasing time spent on bookkeeping and running to the bank, you have more time to complete property management tasks. In addition to management tasks, you have more time available for tenant acquisition and researching new properties to increase cash flow.
Decrease Errors in Bookkeeping
Bookkeeping is time-consuming and paper checks contribute to issues of tracking rent payments. Bookkeeping mistakes can lead to missing lease escalations, missing late fees, and tenant deposits. Online payment services make it easier to track payments from your tenants. Some of the common mistakes of bookkeeping you avoid when using online rent payments include:
- Missing lease escalations
- Not recording payments made for the common area maintenance reconciliations
- Forgetting to track payments
- Not balancing the spreadsheet properly
- Double-posting
Online payment tools reduce the likelihood of mistakes through automation. Mistakes do happen, but recurring, frequent mistakes can create long-lasting mistrust with your tenants.
Online Payments Save Money
Not only does switching to online rent payments save you time, but it also saves you money. Bookkeeping costs increase due to processing costs and hiring someone to manage your bookkeeping. Online payments eliminate these costs through automation.
Enhances Communication with Tenants
Putting online payment tools into commercial properties helps make things clearer and improves contact with tenants. Tenants can see their payment records and any extra fees when they pay their rent online. They pay their rent early instead of coming up with a time to send the money on time. Tenants can see their past due invoices and fees, which helps build trust because they have all the facts at their fingertips.
How to Choose the Right Online Rent Collection Software
When looking for online rent collection software, make sure it has a user-friendly interface, clear reporting, includes payment through ACH, and automated payments. Another important thing to think about is security, and how quickly you can receive the tenant’s rent payments. Look for software that streamlines your work and works with accounting and property management tools.
1. Mobile-Friendly Platform: Look for software that has a mobile website or app that is easy to use. This gives people the freedom to pay their rent easily from their phones.
2. Payment Options: Make sure that the service lets you choose from different ways to pay. The best solutions offer both one-time payments and autopay choices, so they can work for people who like to pay by hand and people who like to do business automatically.
3. Payment Processing: It is important to be able to handle full or partial payments, especially for people who need to be flexible. This function makes sure that you can handle a range of financial situations.
4. Automated Reminders: A great idea for lowering the number of late payments is to set up automatic rent reminders. In order to encourage residents to make timely payments, they remind them about upcoming dues.
5. Financial Reporting: Lastly, choose software that gives you cash reports in real-time. This tool helps property owners keep track of their income, judge how well their properties are doing, and make smart choices.
Decrease Late Rent Payments
The integration of online payments is phasing out older payment methods like checks and money orders for paying rent. Today’s tenants are more familiar with paying online for just about everything they want. Using online payment systems allows tenants to set up recurring payments for their rent. This reduces the number of late payments made by tenants.
Many landlords have integrated online rent payments, and it makes you more competitive as a landlord. If you need to integrate online payments for your rental property, STRATAFOLIO can help. STRATAFOLIO includes online payment management, maintenance requests, and many other management tasks. Schedule a 1:1 demo today to see how STRATAFOLIO helps manage your properties.
