For Landlords and Property Managers Electronic Payments Equals Less Late Payments and Better Cash Flow.
For a long time now, technology has been available for property owners to accept rent through various methods of electronic payments with companies like Merchant Services Nationwide. There have been some reasons in the past why landlords may have been reluctant to make these options available to their renters or tenants. The reluctance has primarily been due to the small but additional expense they may incur. In addition, properties in lower income areas may have a larger population of residents that do not use credit/debit cards. Even so, there are many more benefits to having an electronic payment system in place, than there are costs associated with it.
There are a variety of ways to make payments convenient for an owner/manager and their tenants. These range from a terminal at a front desk to a credit card and check by phone platform, which is simply done over the phone with a computer. Residents who need to make a last minute payment to avoid late fees or eviction no longer have to go searching for their checkbook or panic about being late. Owners/managers and tenants may also wish to set up automatic monthly payments. This will help your cash flow on a per tenant basis, especially for those who are often late with making their payments.
Having an Ecommerce system on your website is another way to accept payments from your tenants. No matter where the tenant is, they can make a payment online. And again they also will have the option to set up automatic payments. No matter what platform fits your business best it can be set up in a safe and secure way for both you and your tenants.
Why it’s Time to Make the Change
Except for very large non-routine transactions, almost every payment that you can think of can be made with a credit/debit card or by a guaranteed check. Throughout society and for almost all businesses, electronic payments have become the norm. The previous method of mailing a paper check to someone is now becoming obsolete. In addition, many companies dislike the old paper check method because of the risk of a bounced check due to a significant lag time from when the check is written and when it is cashed at the bank. With a credit/debit card or electronic check, the payment is either accepted or denied immediately. No more bounced checks and no more trips to the bank to make deposits. All electronic payments are funded directly into your account typically within 24 hours.
Millennials Are The Largest Demographic Of Renters
Millennials are more likely to forget to make a rent payment since everything else they pay for is on a credit or debit card. They are so digitally oriented in their spending habits that most of them no longer carry a check or cash with them. Whether the bill is for a cell phone, utilities, internet, cable, insurance, you name it, most people are paying for these services automatically with their credit / debit card or by electronic check. Millennials also are renting more than they are buying homes due to the rising housing prices, harsh job market, and affordability of renting. Millenials represent one of the larger segments of the rental population.
While older generations Y, and X, are more familiar with paying by check, they also have been migrating to electronic payment methods. Because so much of society has moved on to making electronic payments, it would be a smart choice on your part to accommodate these clients. It’s in the business’s best interests to make it easy for clients to make payments.
Avoiding Additional Costs
Charge The Tenant
Some property owners may not want to pay the extra fees associated with accepting electronic payments. If presented correctly however, charging the tenant for these fees is a win-win for everyone. (1) The tenant pays less than they would if you charged them a late fee, (2) they get cash rewards or travel miles in most cases, (3) and you get paid on time!
Make It A Business Write Off
Just like most to all of your business expenses, the surcharge from credit card companies actually can be used as a tax exemption. Combine this with the benefit of getting paid on time and you’ll find that you’re getting ROI from having the system.
You will be surprised how many renters are willing and even wanting to pay this way not only for the convenience of doing so, but also for the benefits they receive by using their card.
Let theRRD guide you in the right direction to sign up for these services.