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Landlords experience a variety of benefits when switching to online rent collection: automation, convenience, accurate bookkeeping and the ability to meet tenant needs in the marketplace.
Transparency is an often overlooked benefit. As consumers, we want and appreciate transparency throughout the transaction process. We want to be able to track our packages, payments and orders and know that everything is proceeding as it should. The same is true for the rental marketplace. The more you can clue your tenant in on the rent collection process, the more they’ll appreciate it.
Here’s how you can use online rent collection to enhance transparency in your own business:
Related: Landlords, Don’t Believe These 5 Myths About Online Rent Collection
Track IP addresses and login credentials
One common concern that tenants have about online payments is that they aren’t secure. In reality, online payments are often more secure than traditional cash and check payments. This is because online payments track IP addresses (physical locations) and login credentials for every person who signs onto the rent payment portal.
These details help distinguish a device from thousands of other devices online in the area, and incorrect details can indicate when there has been a problem. Combined with timestamps, IP addresses can be used to verify the validity of a transaction, especially if you or a tenant notice something amiss in your records. The addition of these data points is a clear strength of the online approach, and it helps facilitate communication about potential security breaches and other concerns between landlords and tenants.
Record dates and timestamps
As mentioned, dates and timestamps are another important data point that is beneficial to collect. Online platforms record these details automatically, and they can hold both you and the tenant accountable. For instance, a tenant may be able to claim that they dropped a check in the drop box at 11:00 p.m. on the day rent was due, but how would you know for sure whether it wasn’t really the next morning? There’s no way to confirm exactly when your tenant paid (or, in the case of cash, even how much their payment was).
To solve this problem, online rent payments automatically record the exact time a payment was made, providing you with a benchmark you can use to apply late fees and hold tenants accountable. Plus, if a tenant doesn’t remember having made a payment at a certain time, you can investigate potentially fraudulent transactions much sooner.
Auto-generate invoices and receipts
Part of transparency is making sure all parties understand what is expected of them. That’s where invoices and receipts come into play. By providing your tenants with an automatically generated rent payment invoice each month, you can gently remind your tenants of the rent due date and encourage them to make more payments before late fees are applied. Additionally, if changes are made to the agreement or special circumstances of any kind, you can make these changes on the backend and still ensure your tenant receives the correct invoice at the correct time. And after each payment they make, your tenants will receive a receipt verifying the amount, date and time of the payment. There’s no better way to stay transparent with your rent collection process than to inform your tenants that their payments have been received on time, in the correct amount, right after they make them.
Know exactly when your funds come in
Online rent collection can also offer you transparency benefits. On some property management software platforms, for instance, you can use rent payment tracking to find out exactly when your funds are expected to hit your account. If tenants are not paying rent on time, you’ll know that as well, and you can still track the progress of the transaction until it’s finalized and the funds are deposited into your bank account.
Related: How Successful Landlords Approach Rent Collection
Keep a history of rental payments
Lastly, online rent collection creates transparency for both you and your tenants by keeping an accurate history of rental payments. For each tenant, your rent payment platform keeps a rent payment ledger — or a history of all the transactions between you and that tenant. This increases transparency because your tenant doesn’t have to take your word for it about whether a certain fee was charged months ago or how many times they’ve had late payments. Instead, both you and the tenant can see the details of every transaction at any time.There are so many reasons to adopt online rent collection that we didn’t cover here. But as transparency is the foundation of good communication and lasting relationships, it’s no wonder that incorporating it into the rent collection process leads to better landlord-tenant relations and longer tenancies. By switching to online payments, you can serve everyone’s interests while looking after your business, too.