When you are first starting with a real estate investing business, then you won't have to worry too much about rent collection since you will have maybe 1-3 properties to manage. But as your real estate portfolio grows, keeping track of all the different rental payments becomes more laborious.
That's why it's important to have several different rent collection methods in place, so you don't ever have to worry about missing a rental payment and losing profits in that manner. Keep reading to find out what your various rent collection options are.
1. Online Payments
This is probably one of the main ways you will get payments from the younger generation since they will want to make it as easy on themselves as possible to pay their monthly rent. You could use either bank transfer or online payment portals like PayPal or Venmo, depending on your tenant's preference.
You do have to pay a fee to use these online portals, but it's worth it if you can be sure that your rental payment will drop into your account on time every month.
If you are dealing with the older generation of renters, then they might prefer to drop off a cheque in a mailbox or perhaps even mail it to your chosen address. They are probably not that comfortable with online payment methods and like the idea of paying rent as they did years or decades ago.
3. Property Managers
With a property management company in place, you have nothing to worry about. They will have their specific way of ensuring rental payments come in on time.
They might use property management software that has a tenant portal built in, which allows tenants to send in a rent payment through that portal or in a previously agreed-upon fashion.
All in all, with property managers, you don't have to lift a finger, and your rental payments will come in on time every time. If they don't, the property managers are the ones who chase the tenant, not you.
4. Postdated Cheques
This is another method that's become popular in recent years. The tenant would give you 12 or more postdated cheques for the year in advance, and you would have them on hand to deposit into your account on the 1st of every month (or whatever date their lease began).
The only problem with this method is you could potentially lose the cheques if you aren't careful and then have to go back to the tenant for new ones.
Finally, if you have only a few properties to manage, you could collect rent the old-fashioned way by visiting each tenant each month and getting your payment in person. This way, you can build a relationship with the tenant, but it is a time and energy suck.
Try These Rent Collection Methods to See What Fits You
Each real estate investor will be different in their preference of rent collection methods. That's why you have to try these 5 methods out and see which one works best for your personality and business.
If you are searching for a full-service property management service in Las Vegas, contact us today!