For decades, landlords generally had two choices for rent payments: cash or check. But since the dawn of the 21st century, digital payments have been the way to go. And when it comes to accepting rent online, ACH rent payments offer the greatest security and convenience.
This payment system allows tenants to deposit money directly into your bank account, without hassles or extended delays. It’s fast, safe, and seamlessly integrates with existing property management strategies. If you’re still on the fence, though, we’re here to review the ins and outs for you.
In this article, we’ll go over the pros and cons of the ACH system, plus some platforms that will help you get started. If you’re ready to level up your rent collection strategy, keep reading to find out what you should know about ACH rent payments.
What is an ACH rent payment?
ACH stands for “Automated Clearing House.” Started in the 1970s, it’s a nationwide electronic system for transferring funds between financial institutions. You can think of ACH like a digital check, allowing people to send money back and forth without a physical piece of paper.
Over the decades, landlords everywhere have come to favor ACH for rent collection. Compared to checks, ACH significantly speeds up the payment process, creating an efficient and convenient way to receive money quickly. With ACH, ther are no need for trips to the bank or in-person visits to tenants.
In an era when digital transfers have taken precedence over other payment methods, it’s easy to understand why ACH rent payments have become so popular. With minimal effort on your part, you can receive money directly to your bank account in just a few days.
How ACH Rent Payments Work
If you’ve never accepted digital rent payments before, don’t worry—the process is simple. We’ll go into these steps in more detail shortly, but here’s a quick look:
Step 1: First, you’ll need to get your tenant’s permission to receive ACH payments from their bank account. The tenant will then need to sign an agreement authorizing ACH payments.
Step 2: After you get your tenant’s consent, you’ll use property management software to set up the ACH payment process, including payment terms.
Step 3: Your tenant’s bank will process the payment in batches, which include other ACH transactions. This reduces the possibility of errors, fraud, and mistaken payments.
Step 4: Next, the ACH system will verify the transaction details, such as the account and routing numbers. The network will then send the payment to your bank.
Step 5: Your tenant’s bank authorizes the transaction and removes the funds from their account. That money goes to your account, though it may show as a pending transaction.
Step 6: After the transaction goes through, you and your tenant will receive electronic confirmations through email or text, providing a clear, digital payment record.
Step 7: Once the transaction posts to your and your tenant’s accounts, you can view the payment as a deposit. To match, your tenant will see it as a debit.
Typical Timelines for ACH Payments
ACH rent payments aren’t instant, but they’re pretty fast. Once your tenant pays, you’ll usually receive the funds in your account within 1 to 3 days. However, depending on your software and the day of the week, processing may take up to 5 days.
Despite these delays, ACH transfer is among the fastest possible methods for sending and receiving rent payments. Some property management platforms also offer expedited payment options, so you likely won’t have to wait as long as you think to get your money.
Benefits of Using ACH for Rent
Using ACH offers several benefits for both landlords and tenants. You should consider ACH rent payments if you’re looking for a collection method that’s:
Budget-friendly: Most financial institutions don’t charge fees for receiving an ACH deposit, and your tenant will only have to pay a nominal fee, typically a few dollars.
Can be automated: Unlike cash or checks, your tenants can set their rent payments to autopay, reducing your risk of late payments and increasing efficiency on both sides.
Highly secure: ACH rent payments offer a high degree of security for landlords and tenants alike, as each payment is subject to multiple layers of verification.
Convenient for both landlords and tenants: Your renters can make payments from just about anywhere there’s a secure WiFi connection, and you don’t have to visit the bank for physical deposits.
Enables digital recordkeeping: With transaction confirmations from ACH rent payments, you’ll have a digital paper trail of who paid rent and when, streamlining your bookkeeping and accounting processes.
Works with most property management software: Most property management software will already support ACH rent payments, making it easy to integrate rent payment with the rest of your property management.
Drawbacks of Using ACH for Rent
Before you decide whether to accept ACH rent payments, you should be aware of a couple of potential downsides. Landlords might come up against these problems:
Delays: If your renter pays on a weekend or holiday, you may need to wait a few extra days for their payment to be credited to your account.
Tenants need to be tech-savvy: If your tenants don’t know their way around online banking, they may struggle with the ACH process, which could lead to headaches for you.
Requires a bank account: To send and accept ACH rent payments, both you and your tenant will need bank accounts with digital capabilities, which some renters may not have.
How to Collect Rent Via ACH
Now that you know what ACH payments entail, let’s go into details about how you can collect rent. Here’s what you’ll have to do:
Step 1: Sign Up for Property Management Software
First things first, you’ll need to sign up for property management software to navigate the ACH process. This software will facilitate ACH rent payments as part of their rent collection tools. After all, it’s a lot more secure than both parties exchanging their banking details directly.
Step 2: Connect Your Bank Account to the Platform
Next, you’ll connect your bank account by providing details like your routing and account numbers. Depending on the platform, you’ll likely have to go through some additional verification steps, so you won’t have to worry about your banking info falling into the wrong hands.
Step 3: Invite Your Tenant to Pay Rent Online
Once you’re set up to receive rent, you’ll need to get your tenant ready to send payments. You can typically send an invitation through your property management software or reach out to them directly. Be prepared to answer any questions and handle troubleshooting if needed.
Step 4: Set Up Rent Terms and Encourage Automatic Payments
Last but not least, it’s time to set your rent terms and get paid. Provide the amount due and the date, and encourage tenants to set their rent on autopay. It’s one less thing for your renters to worry about, and you’ll see fewer late payments.
Best Platforms for ACH Rent Collection
As we’ve said, ACH rent collection is simple (as long as you have the right platform, that is). These property management software can help you get started:
TurboTenant
TurboTenant is an all-in-one property management platform that offers robust rent collection services. Your tenants can set rent to autopay and pay by credit or debit card, in addition to ACH, and you can configure the platform to charge late fees and send payment reminders automatically.
Start a TurboTenant account for free to receive access to a full suite of property management tools. In addition to rent collection, landlords can access lease management, rental advertising, fully integrated accounting, and more to simplify the management process.
TenantCloud
TenantCloud is another comprehensive property management software with ACH rent collection capabilities. The user interface is easy for both landlords and tenants to understand, offering options such as shared rent payments between roommates and simplified payment tracking in TenantCloud’s central hub.
In addition to rent collection, TenantCloud also offers tools such as marketing and leasing assistance, as well as QuickBooks integration for all your accounting needs. You can even work with additional team members on your account, ideal for multi-owner and -investor situations.
RentRedi
RentRedi offers powerful rent collection and reporting via REI Hub, a real estate accounting software. You can automate much of the rent collection process and utilize REI Hub’s detailed payment tracking options. It’s an excellent choice for landlords with complex accounting needs.
Beyond its financial tools, RentRedi’s other features include tenant screening, lease creation, document storage, and marketing to support the property management process from start to finish. And since you can get started with RentRedi for just $5 a month, the software won’t strain your budget.
Final Thoughts
These days, the ability to accept online rent payments securely and quickly is crucial to rental property management. ACH rent payments can be a huge help for landlords, streamlining the collection process while eliminating the need for in-person confrontations or trips to the bank.
If you’re ready to start accepting rent via ACH, sign up for a reliable property management software. These programs facilitate ACH payments between bank accounts, and many offer customer support to help your renters get started.
Though you might be used to collecting rent by check or cash, accepting ACH rent payments will bring you right up to 2026. With the right property management software, you can boost convenience for both yourself and your renters, leading to better (and longer-lasting) tenant relationships.
FAQ: ACH Rent Collection
Are ACH rent payments risky?
Generally speaking, no. ACH rent payments are one of the most secure rent collection methods available. With strong encryption, detailed digital recordkeeping, multiple layers of verification, and no risk of misplacing cash or check payments, ACH is highly secure. Though fraud is possible, it’s unlikely.
How long do ACH payments take?
After tenants send ACH rent payments, the money is typically deposited into the landlord’s bank account within 1 to 3 business days. However, that timeline could extend to 4 to 5 days, depending on when the ACH payment was made, so some delays are possible.
What are the pros and cons of accepting ACH rent payments?
Accepting ACH rent payments provides peace of mind for both landlords and tenants. It’s convenient, secure, and allows for easy online recordkeeping and automation. Additionally, ACH rent payments are highly cost-effective, as most banks charge only nominal fees to the sender.
On the downside, ACH rent payments require a few days to process, and tenants will need at least some technical know-how to get started. Additionally, both landlords and their renters must have bank accounts for the process to work.
What is the best rent collection method?
ACH rent payments via property management platforms are the best method for rent collection. This system ensures the safety of your financial information, automates processes, and costs very little to implement. All in all, ACH rent payments provide the greatest reliability and efficiency possible.
