Automatic Rent Collection: Is it For You?

Posted by Teresa on November 17, 2009 under Landlord Tips, Rents and Deposits | Be the First to Comment

Rent collecting is the number one headache we hear from landlords. Lots of tenants, it seems, cannot seem to pay on time. Plus, there’s the time wasted making collection phone calls, picking up rent personally, dealing with checks and bank deposits, bad checks, and visits to the post office.

More people than ever pay their bills online. Health clubs have automatically debited their monthly fees from members’ accounts for years. Your tenants probably already pay insurance and car payments automatically every month. Why not offer them a way to pay their rent online, too?

Rentmatic is an automated rent payment service that debits your tenants’ bank accounts on the day rent is due, and transfers the funds to your designated account. It’s free to sign up, but they charge a fee of $3.95 for each unit that is on the automatic system (there is a discount for 25 units or more). The company also offers dynamic features like free data storage and an online tenant communication, where tenants can request maintenance and the landlord can email all or selected tenants. And, they offer tenants an incentive to pay online, with a chance to win a $50 prize every month.

ClearNow collects and transfers rent payments through the ACH protocol. The service is $14.95 per month, including one tenant, plus $2 per additional tenant. The service sends reminder emails eight days prior to debiting tenants’ accounts, which is done on the first banking day of the month. Three days after debiting tenant accounts, the funds are credited to the landlord’s account.

Required paperwork for online rent payment services is minimal; you can incorporate the authorization into your new tenant paperwork easily. Be sure to keep copies of all signed agreements and authorizations in your tenant files.