For most rental businesses, collecting rent is a landlord’s primary source of income. A healthy cash flow is maintained by consistent, on-time payments in full amounts. 

There are many ways to collect rent these days. Some landlords choose to do it the old-fashioned way using cash or paper checks, but these methods come with several drawbacks. Cash and checks require coordinating schedules between you and your tenants to make the exchange. They’ll also require additional trips to the bank to make deposits, which is especially inconvenient the more tenants you have. And let’s not forget the risk of losing or misplacing the paper money.

Online rent collection on free property management software has become increasingly popular among landlords. It eliminates the aforementioned drawbacks posed by cash and checks, and it adds a number of advantages to top it off.

Here are four reasons why you should make the switch to online rent collection:

  1. Recurring Payments

Online rent collection gives your tenants the option to set up recurring payments. This means your tenants can set the payment interval and amount ahead of time, and the software will automatically make the payments every month when rent is due. That way, your tenants don’t have to remember.

Not only does this make things easier on your tenants, but it’s equally beneficial for you. With recurring payments, you know that you’ll automatically be receiving the correct amount on time, every time. This seriously reduces the likelihood that you’ll have to deal with late payments.

  1. Enforceable Late Fees

As discussed above, the option for recurring payments is sure to decrease the number of late payments you’ll receive. Nevertheless, there’s always the possibility that they’ll come up.

For some landlords, enforcing late fees is one of the hardest parts of the job. On the one hand, it’s natural to want to be understanding about a tenant’s situation and be lenient when it comes to enforcing late fees. On the other hand, you’re running a business, and late payments are a breach of the lease contract. 

Online rent collection makes it so you don’t have to be the bad guy. The software lets you set the late fee amount and the grace period, and when a tenant doesn’t pay their rent on time, they will automatically receive the late fee, which they must pay on top of their rent. Furthermore, you can send out customized reminders to automatically be sent out when rent is past due.

  1. Flexible Payment Options

One of the nicest aspects about paying online is that you can do it from anywhere. No more coordinating schedules to deliver a rent payment at a specific time and place. You or your tenants can take a vacation, for example, without having to worry about missing a payment.

Property management software also offers flexibility in terms of the actual method of payment. Tenants have the option to pay via debit card, credit card, or ACH payment (which pulls funds directly from the tenant’s bank account). This makes things a lot easier for your tenants, who can pay using the method that works best for them.

  1. Automated Records

Although it’s one of the less-appreciated features of online rent collection compared to those discussed above, automated records are a lifesaver when it comes time that you realize you need them. 

The fact of the matter is online rent collection will automatically record any payment that’s ever made. You don’t have to worry about keeping track of your transactions manually, and you won’t have to worry about the possibility of human error in bookkeeping. If you ever need to pull up the records for a payment, you can very easily do so. Additionally, most property management software platforms allow you to export these documents so that you can easily back them up or share them with partners or accountants.

Conclusion

If it wasn’t already evident that online rent collection on property management software is how you should be collecting rent, then it should be now. Making the switch will save you so much time and money while simultaneously making things easier on your tenants.