Automated rent payment options have become increasingly popular in recent years, with the majority of renters preferring to pay rent online. However, tenants' preferences go beyond simply having the ability to pay online. We'll explore how tenants and property managers alike benefit from the ability to schedule automatic rent payments without having to manually authorize them each month. We'll discuss the benefits of this feature, the demand for it among renters, and how property managers can meet this growing demand, as well as utilize it as a part of your overall marketing strategy.
Property Manager Benefits
As a property manager (or DIY landlord), there are always a hundred things that need to be done. And rent collection is one of the biggest ones that some in our industry are still suffering through when the first of the month rolls around. Thankfully, in 2023, many of those things can now be automated, or at least semi-automated. Here are some ways automated rent collection can help property managers and landlords automate and streamline the monthly rent collection process.
Eliminate Manual Processes
With automated rent collection, landlords or property managers can eliminate the need for manual processes such as printing and mailing paper invoices, collecting checks or cash, and manually entering data into accounting software. This can save time and reduce errors, leading to greater efficiency.
With property management software like TenantCloud, you can tell the software everything it needs to know about the lease in terms of rental amounts due, the dates the rent is due, grace period schedules, late fees and when they should generate, and much more.
You can tell the system to automatically notify the tenant when rent is posted when it’s due, and when it’s overdue in order to eliminate all the manual work normally involved with tenant reminders.
Automated rent collection can ensure that payments are received on time and in full. Tenants can set up recurring automatic rental payments, which can help them avoid late fees and ensure that their rent is always paid on time. This can reduce the administrative burden of chasing down late payments and help landlords maintain a steady cash flow.
The less time you have to spend on following up with tenants reminding them about rent being due, late fees being charged, etc., the better! Automatic rent collection helps reduce the amount of time you have to spend doing those things.
Automated rent collection platforms often use secure payment gateways to process transactions, providing an additional layer of security for both landlords and tenants. This can reduce the risk of fraud or theft and ensure that sensitive financial information is protected.
When the platform is specifically geared for managing real estate rentals the way that TenantCloud is, you also have additional property management-specific controls in place for things like preventing tenants from making partial payments (this is important in some states after filing eviction).
Improved Your Record-Keeping
Automated rent collection platforms typically provide detailed transaction records, which can help landlords and property managers keep better track of their finances. This can simplify tax reporting and help ensure compliance with local regulations. It also just makes accounting easier in general when everything is tracked for you automatically through proper categorization, and tracking of transactions.
Tenant Benefits o Automatic Rent Collection
It’s not just property managers and landlords who benefit from automated rent collection. It’s tenants, too! In fact, prospective tenants want to know about your rent collection systems. Do you offer a mobile app? Do you offer automatic ACH payments? Do you offer a secure tenant portal to view rental invoices, late fees, etc? In the 21st century, tenants are looking for automation, and that includes their next rental property. So, you’ll want to make sure you’re marketing your vacancies using some of these highlights for tenants.
People love convenience. Think about food delivery, laundry services, same-day delivery, and any other convenience in our lives that we pay for. Tenants view automatic rent collection as a convenience. So much so that it’s worth using as a selling point for your rental property when marketing your vacancies.
Automated rent collection allows tenants to set up recurring payments, which can be automatically deducted from their bank accounts or credit cards each month without even needing to think about it. This eliminates the need to remember to write a check or visit the leasing office to pay rent, making it more convenient for tenants.
Life happens fast, and while paying rent is kind of a big deal – believe it or not, it’s pretty easy to forget to do when the world is spinning a little too quickly! Automated rent collection helps avoid forgetfulness.
With automated rent collection, tenants can choose the payment initiation date that works best for them. If rent is due on the first of the month, then the tenant can set the rent to automatically be processed from their account as much as 10 days before the due date.
This can provide more flexibility for tenants who may prefer paying rent early, or who just want to make sure rent is paid on time.
Speaking of on time... with automated rent collection, tenants can ensure that their rent is paid on time each month, helping them avoid late fees and maintain a good payment history. This can be particularly beneficial for tenants who may have difficulty keeping track of payment due dates or who may struggle to make payments on time in general.
It’s also a helpful benefit for tenants who have opted in to report their rental payments to the credit bureaus. Generally, tenants who opt into credit reporting on their rent want to make sure, with 100% certainty, that their rent is going to be paid on time for positive reporting purposes.
Side Note: Rent reporting is available to all tenants on TenantCloud. This is an extremely popular feature that tenants are increasingly looking for in rentals, so use that to your benefit when marketing your rental vacancies and make sure to note that the platform you use makes rent reporting easy for your tenants.
Automated rent collection allows tenants to budget more effectively by knowing exactly when their rent payments will be deducted each month. This can help them better manage their finances and avoid unexpected expenses.
Budgeting is an increasingly popular topic amongst younger rental demographics as inflation continues to affect the average consumer's finances. By automating the rental collection process, your tenants will know exactly when the rental invoices are published each month, when their automatic payment will process, and exactly when late fees will be incurred if their rent is not paid on time.
Rental invoices can even be published early, or tenants can pay rent in advance if they want to pay prior to the next month's invoice even being published online.
Security is an increasingly hot topic. It seems like every other day you hear about identity theft issues, bank account theft, login theft, and many other issues that revolve around security. Automated rent collection platforms often use secure payment gateways to process transactions, providing an additional layer of security for tenants. This can reduce the risk of fraud or identity theft and ensure that sensitive financial information is protected.
And automating the rent collection process reduces the number of times that your tenant has to pull out their debit or credit card, log in to their bank account to get their routing or accounting numbers, or even having to write them down on a physical piece of paper or in a digital note app. The fewer number times a person has to interact with sensitive financial information – the better. Things like 2FA (Two-Factor Authentication) on TenantCloud, and automated rent collection helps increase overall security around online rental payments.
Even if a tenant does not utilize the automatic rent payment functionality, the vast majority still want to be able to pay rent via their smartphones no matter where they are. So the mobile app and mobile-friendly browser version of TenantCloud is another great feature to promote to your tenants and prospective tenants.