Rent collection might seem like the best part of being a landlord. After you invest your time, effort, and money into your property, the payoff should be worthwhile. But between late payments, tenant confrontations, and accounting hassles, rent collection isn’t always easy.
Luckily, there’s a solution. In the digital age, landlords can collect rent safely and quickly online. The right rental property management software eliminates the need to make trips to the bank to deposit checks or to have awkward conversations with your tenants when rent becomes past due.
If you’re ready to simplify your next payday, read on to find out everything you should know about the best rent collection options available to landlords. We’ve also thrown in a few bonus tips that will help you level up your rent collection game.
Why Reliable Rent Collection is Non-Negotiable
No matter how many rental units you own, just about every landlord can agree that they want to receive rent in full and on time. Sounds simple enough, right? But if you don’t have reliable rent collection methods, this process can quickly turn into a nightmare.
You could receive late or partial payments, need to confront your tenants for overdue rent, and struggle to track payment status. Without proof, charging late fees goes out the window. Not to mention that an unreliable rent collection system can stress out your tenants, too.
Having a trustworthy, stable payment process in place reduces the frequency of late rent deposits and makes collection painless for both tenants and landlords. That way, you don’t have to wait around wondering whether your renters forgot to pay up this month.
Common Rent Collection Methods Used by Landlords
These days, landlords have several options for collecting rent. We’ll explore these possibilities in detail later on, but here’s a brief overview for now:
Cash
Receiving rent in cash might seem like the easiest way of doing things. After all, it’s the most basic form of transaction—landlords won’t need to pay any fees, and your tenants don’t even need a bank account. However, there are plenty of downsides to cash payments.
Nowadays, most people don’t tend to have wads of cash lying around, and even if they did, you’d have to facilitate an in-person pickup. Throwing a large chunk of change into the mail can result in lost payments, adding uncertainty and frustration to the collection process.
Check
Similar to cash, check payments are another traditional, but outdated option for rent collection. Landlords can collect checks either in person or by mail, allowing for remote collection. While this strategy may seem foolproof enough, check payments come with their own set of problems.
To start, landlords have to choose between the potential stress of in-person payments and the risk of a lost check disappearing in the mail. Then, you have to go to the bank or deposit on mobile, adding yet another item to your to-do list.
Online Electronic Payments
By now, you’ve probably gathered where this is going, but it bears saying: Online electronic payments provide the best option for landlords to collect rent. This makes the process far less stressful for landlords and tenants, while helping you get paid faster—a win-win.
These days, just about everyone conducts most, if not all, of their business online. Your tenants will likely already expect you to offer digital rent payment, and if you don’t, they may seek housing elsewhere. After all, renters don’t want to stress about their payments, either.
Online electronic payments provide the best security and convenience possible for rent collection, so you don’t have to chase down tenants, deposit checks, or keep track of large sums of cash. And the good news is, you can choose from several different options for digital rent collection.
10 Best Rent Collection Methods for Landlords (Ranked)
If you’re still on the fence about switching rent collection strategies, we’ve got you covered. Here, we’re exploring the top ways to collect rent, starting with the best and working our way down.
#1: TurboTenant
TurboTenant’s rent collection software is the best in the business. It’s highly secure thanks to partnerships with Plaid and Stripe, and provides valuable flexibility for tenants, allowing payment by credit card, debit card, or ACH deposit. And did we mention that it’s free for landlords?
TurboTenant can automate both payment reminders and late-fee charges, while tenants benefit from autopay and optional rent reporting, which build good credit for each on-time payment. If you want to improve rent collection for both you and your tenants, start a TurboTenant account today.
Pros
- Automatic rent payment reminders, late fees, and rent receipts
- Autopay and rent reporting options for tenants
- Fully integrated accounting for easy payment tracking
- Easily customizable for both landlords and tenants
- Intuitive user interface
Cons
- Tenants must pay an industry-standard, 3.49% processing fee to pay by credit or debit card
#2: TenantCloud
Another comprehensive rent collection option, TenantCloud offers features similar to TurboTenant, including automatic late-fee charges, payment tracking, and rent reminders. Tenants can also set their rent to auto-pay for added convenience. Plus, you can automatically generate tax forms when filing season rolls around.
TenantCloud also has a highly intuitive user interface that makes it easy to integrate rent collection into your property management workflow. If there’s any drawback, it’s that TenantCloud doesn’t come free, but depending on your budget, more robust rent collection tools may be worthwhile.
Pros
- Automatic rent reminders and late fees
- No ACH fees for tenants
- Rent reporting is available to build tenants’ credit
- Easy to set up, with strong customer support
- Secure payment processing through Stripe
Cons
- Rent reporting costs tenants $4.95 per month at the time of writing
- Memberships for landlords start at $16.50 per month
#3: RentRedi
Property management software RentRedi boasts a powerful collection system. Powered by REI Hub, RentRedi makes it easy not just for landlords to collect rent, but also to perform accounting tasks. This ensures that your portfolio stays profitable and keeps all income and expenses on track.
As for tenants, RentRedi offers a variety of options to satisfy every kind of renter. Your tenants can even pay rent in cash, if they prefer. No matter how you receive your payments, RentRedi employs robust security measures to protect your and your tenants’ data.
Pros
- Flexible payment options
- Payments deposit into your account within 2-3 business days
- Strong accounting tools with plenty of customization options
- Automatic rent reminders and late fees
- Payment tracking
Cons
- Interface can confuse first-time users
- Landlords and tenants must cover payment processing costs
#4: ACH Bank Transfers
Let’s shift gears from rental management software to discuss other collection options, such as ACH transfers. At first glance, this payment method might seem like an ideal solution. ACH deposits barely cost anything and typically arrive in your account within 1 to 2 days.
Unfortunately, ACH bank transfers are far from a silver bullet for rent collection. The initial setup can be a hassle, as you’ll likely have to coordinate transfers across multiple financial institutions. And if your tenants have insufficient funds in their accounts, you may face costly delays.
Pros
- Offer security and a digital paper trail
- Payments go through quickly
- Costs little, if anything, to collect
- Don’t require the use of a new program or account
Cons
- No automated rent payment tracking or accounting options
- Landlords will have to negotiate late fees directly with tenants
- Insufficient funds can lead to stalled payments
- Limited by banks’ processing times
#5: Zelle
If you haven’t already heard of Zelle, it’s one of the most popular peer-to-peer payment systems out there. It offers bank-level security measures for users, no transaction fees, and near-instant transfers. It’s little surprise that many landlords think this could be their solution for rent collection.
But there are some significant drawbacks to collecting rent with Zelle. You’ll have to deal with transaction limits, and not all banks support Zelle, so you’ll be out of luck if your renter can’t use the software. And, of course, Zelle lacks built-in accounting features.
Pros
- Allows for near-instant transactions
- Does not cost users to send or receive money
- Popular platform, so many renters already have it
- Provides bank-level security measures
Cons
- Transaction limits on how much money your renters can send
- No accounting or payment tracking options
- Payments are irreversible
- No automatic late fees or rent payment reminders
#6: PayPal
Like Zelle, PayPal’s popularity makes it an attractive option for landlords to collect rent. Most people already use PayPal in some form, so renters will likely be familiar with the payment process. Plus, PayPal is highly convenient, and it provides the added security of digital payments.
Naturally, though, PayPal doesn’t offer purpose-built landlord features like payment tracking or late fee charges. You’ll also be subject to transaction limits and delays, and PayPal requires that the merchant (aka you) pay between 2.9% to 3.49% to facilitate commercial transactions.
Pros
- Widely used platform
- Ability to accept digital payments
- Provides security for renters and landlords
- Easy to coordinate with tenants based solely on contact information
Cons
- Delays in transferring payments from PayPal to your bank account
- No landlord-specific tools
- Merchant fees charged for business transactions
- Regular large payments could trigger account freezes
#7: Venmo
Venmo is another widely used P2P payment platform. Most renters already have Venmo accounts, and the program offers a digital paper trail that can help with accounting. Venmo also has a very user-friendly interface, allowing you to set up a business account in no time.
However, Venmo notably does not offer any protections for misdirected payments, so you’ll have a hard time getting your money back if your tenant makes a mistake. Landlords must also pay a 1.9% merchant fee plus a $0.10 flat fee.
Pros
- Convenient and easy to use
- Popular platform that most renters will already have
- Provides a digital rent payment record
- You can typically receive funds quickly
Cons
- No protections against incorrect payments
- Comparatively low limits on transactions
- Additional fees for business payments
- No automatic late rent fees or rent payment reminders
#8: CashApp
Though not as popular as Venmo, Zelle, or PayPal, Cash App is another option for landlords to collect rent using P2P technology. Tenants can conveniently pay on the go from just about anywhere, and landlords typically receive deposits within a couple of days.
Like other P2P methods, CashApp lacks dedicated landlord features and offers limited dispute-resolution options. Your renters will need to be wary of scams on CashApp, since they likely won’t be able to recover any money lost to fraud.
Pros
- Offers a convenient option for mobile pay
- Landlords can receive payments quickly
- Tenants can put rent on autopay
- Landlords receive alerts when payments are made
Cons
- Lack of purpose-built landlord features
- Strict transaction limits, especially on unverified accounts
- Limited dispute resolution options
- Difficult to track rent payment history
#9: Checks
Tenants can pay rent via check, either in person or remotely, all while creating a literal paper trail for reference. Check payments are also less risky than handling large sums of cash and don’t require your tenants to sign up for new software that could potentially confuse them.
Unfortunately, that’s about where the benefits end. These little slips of paper easily get lost, either in the mail or in your possession, and renters can even cancel checks before you deposit the payment. To top it off, most people don’t use or own checks anymore.
Pros
- Provide a paper trail
- Easy for tenants to use
Cons
- Can easily be lost or stolen
- Tenants can cancel checks before you deposit payment
- Bounced checks can lead to significant payment delays
- Landlords must manually deposit funds
- Tenants may not own or know how to use checks
#10: Cash
Landlords have accepted cash payments since the dawn of rent collection, and it’s not hard to see why. You get to have your money in hand immediately, with no processing delays or fees. In short, this is about as simple as the rent payment process can get.
Of course, though, countless things can go wrong. Tenants may struggle to get their hands on such a large sum of money, and keeping track of cash payments is difficult at best. After all, you’ll have no proof of whether and when your renters paid.
Pros
- Simple and straightforward
- No delays or processing fees
Cons
- Lack of security
- Risk of accepting counterfeit bills
- No payment tracking
- Requires a physical deposit at a bank or ATM
- Can easily lead to errors in the accounting process
Tips for Collecting Rent as a Landlord
By now, you’re probably aware that online rent collection via property management software is the way to go. However, you should keep a few factors in mind before you jump in:
Help Tenants Set Up Automatic Monthly Rent Withdrawals
When it comes to receiving on-time rent payments, autopay is your—and your tenants’—new best friend. You can encourage your renters to opt in to automatic payment methods by offering a small discount, and be ready to provide hands-on assistance to help them get started.
Send Rent Reminders
Automatic monthly rent reminders will reduce late payments and eliminate the awkwardness of personally following up with tenants. These reminders can also genuinely help your tenants, since a late rent payment is often just an honest mistake.
Assess Late Fees in Accordance With State Law
Despite your and your tenants’ best efforts, late rent payments happen, in which case you’ll have to charge late fees to protect your investment. But you can’t just demand late fees left and right—research local laws to avoid overcharging your tenants or charging too early.
Use Property Management Software to Streamline the Rest of Your Landlording Duties
Beyond collecting rent, you can use property management software to save yourself time in all areas of rental operations. The right software helps you coordinate everything from property maintenance to advertising, allowing you to focus on the big-picture goals of your rental business.
How will you collect rent as a landlord?
Rent collection can be more stressful than landlords expect—you might have to deal with late payments, confrontational tenants, and accounting hassles, to name just a few potential issues. But signing up for the right rental management software can easily streamline the process.
Anyone looking to improve both rent collection and overall property management can benefit from programs designed specifically for landlords. That way, you don’t have to wonder where your rent ended up or whether you can expect an on-time payment from your tenants.
If you’re ready to remove the headaches from rent collection, sign up for a free account with TurboTenant today. In addition to rent collection, TurboTenant also offers rental advertising, digital leasing, maintenance coordination, and more to streamline property management.
