The Pros And Cons Of Online Rent Collection (2024)

June 16, 2024 by Georges Benoliel

Did you know that 27% of Americans are so stressed they feel like they can’t function? Being a landlord is stressful and adds to the daily worries you already have. If you’re an aspiring or existing landlord, you must carefully manage the amount of stress you take on. Whether you’re already feeling the burden of property management stress or not, online rent collection could be a valuable asset. Read on as we examine the advantages and disadvantages of online rent collection.

What Is Online Rent Collection?

An online rent collection is an automation tool that makes property management more effortless. It manages online rent payments without requiring landlord intervention. Here are some of the features of an online rent collection platform:

• Online payment platform: Instead of making cash deposits, paying in cheques, or making a bank transfer every month, your tenants can set up automatic payments and manage them using an online portal. The portal tracks their back payments and any fees, so they know how much they owe without needing to call, email, or text you.
• Payment reminders, alerts, and warnings: The platform notifies your tenants when their payments are due, overdue, or past due. You can establish how many alerts the tenant receives until the matter is passed to you; at this point, you can choose to communicate with the tenant and make an arrangement or pass the matter on to the police. 
• Mobile accessibility: Many rent collection apps are optimized for mobile devices, enabling both landlords and tenants to access rent payment information from anywhere, whether it’s at their local cafe, workplace, or gym.

Once you have implemented an online rent collection platform, you won’t have to manage payments as tightly or strictly, and you can experience many benefits.

Pros Of Online Rent Collection

Are you unsure whether this is the right landlord automation tool? Therefore, let’s clarify some undeniable advantages of online rent collection.

Convenient For Tenants

It’s not always intentional when tenants don’t make a timely payment. Often, it’s simply a matter of forgetfulness or finding the time to drop off a check. By implementing an online rent collection platform, you make things easier for your tenants, which makes them more likely to pay on time. The automated reminders mean that they won’t forget when rent is due, and they can even set up automatic direct debits to reduce their monthly workload. 

An online platform also enables tenants to take a self-service approach to understanding their rental obligations. 

If they are unsure whether they overpaid last month, they can review their payment history using the app. This reduces the amount they need to communicate with you, and tenant communications can be one of the most hefty responsibilities for a landlord.

Reduces Your Workload

Your workload is more significant than you’d think as a landlord. You must list vacant properties, manage rental contracts and taxes, and ensure tenant satisfaction by performing necessary maintenance. 

With online payment platforms, there’s one less thing to worry about. If your tenants don’t need to contact you whenever they have a payment-related question, your duties will be reduced tenfold. You won’t need to send any further payment reminders. They can set up recurring payments. The landlord can follow up with property management software.

Documenting Payments Effectively

Evidencing payments and rental arrears can prove incredibly useful in a stressful legal matter. You can easily download the relevant files to send to your lawyer and pursue the legal route to evict the tenant if necessary.

Integration Potential

Most online rent collection platforms offer open API integrations, allowing you to connect them with your accounting and property management solutions. This way, you can quickly transfer the rental payment data into your books and tenant records on your property management system.

With such limitless integration potential, there will be no data transfer issues or errors caused by manual data entry, allowing you to transfer data without any manual intervention. This is particularly beneficial for managing off-market properties, where streamlined operations are crucial.

Cons Of Online Rent Collection

Some hiccups and drawbacks may happen when it comes to online rent collection. 

Digital Nomads

If you set up an online rent collection platform, it does not accommodate digital nomads. You should incorporate a method that allows people without access to a phone, laptop, or the Internet to make their rental payments.

System Failures

System failures can lead to late payments, making it challenging to pay property taxes and bills on time. Opting for a reputable platform with positive reviews can help you avoid costly system failures.

Summary

Innovative and developing technology solutions are the best way to optimize your life as a landlord. You have family to see, errands to run, and a house of your own to spruce up. Delegating tasks like payment management to technological tools will free up your time effortlessly, allowing you to enjoy a stress-free and hassle-free schedule.

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