How to do ACH Rent Payments

ACH Rent Payments
ACH Rent Payments are safe, convenient, and inexpensive

The ACH network is the most widely used, bank-based electronic funds transfer network in the United States. Millions of employees receive their salaries through ‘direct deposit’ via the ACH payment network. The ACH network does not charge a percentage of each transaction amount like credit cards. Instead, the ACH network charges a small fixed fee for each payment made. The ACH network is safe, reliable, and inexpensive. These attributes make ACH rent payments a great payment method for landlords and their tenants.

ACH Rent Payment is Safe

Using the ACH payment network, property managers schedule rent payment so that funds move automatically from a tenant’s checking account to the property’s checking account. Federal Regulation E (the Electronic Funds Transfer Act of 1978) safeguards consumers against the inappropriate movement of funds from their account.

Easy To Use Web-Based Rent Payments

Traditionally, using the ACH payment network meant learning ACH software and transferring files back and forth to an ACH processor (a bank or a company specializing in ACH processing). Fortunately, Web-based solutions make ACH rent payments easier to setup than ever before. ClearNow is one of the oldest (since 2000) and most well-reviewed (perfect BBB rating) ACH rent payment service.

Methods to Pay Rent Online

Pay rent online credit card
Two online rent payment methods for tenants include credit card and ACH.

Finding a way to complete chores in the fastest and most painful manner is a win. When it comes to the chore of paying rent, tenants who can pay rent online achieve speed and ease. The two most popular methods of online rent payment are credit card and ACH.

Pay Rent Online by Credit Card

Paying for goods and services by credit card is very popular in certain markets, such as dining and consumer goods. In these markets, credit card payment in person or online is highly accessible. In the real estate rental market, however, credit cards are not popular. Many landlords do not accept credit card payments mainly due to the high cost that credit card companies charge. Fees are typically based on a percentage (usually 2% to 3%) of the amount charged making it quite expensive. For example, a $500 rent payment can cost the landlord $10 to $15 in fees. Even though the fees are high, there are services that enable tenants to pay rent online by credit card. Tenants who can pay rent by credit card will benefit from rewards they can earn with their card company as well as cover them if they are short on cash when rent is due.

Pay Rent Online by ACH

The Automated Clearing House (ACH) Network enables the electronic transfer of funds between bank accounts. One of the most popular uses of an ACH payment is with direct deposit for payroll. Most employers will pay employees as a direct deposit to the employees’ bank accounts using the ACH Network. Rent payment by ACH is much more popular than credit cards partly due to the reasonable cost. There are many online rent payment services that enable tenants to pay rent online by ACH. These services will differ on factors such as cost and features. For example, ClearNow does not charge tenants to pay rent online (landlords pay the fee) and will furnish rent payment data to the Experian credit bureau for those tenants wanting to build a credit history.

Tenants who want to make their lives easier should look into paying rent online. There are online rent payment services that offer credit card and ACH as payment options.

Rent Check Lost in Mail?

Check Lost in Mail
Check Lost in Mail? Here’s what to do.

Were you waiting for a rent check in the mail from your tenant? You contact your tenant and they say that the rent check was sent. You are facing the dreaded ‘Rent Check Lost in the Mail’ issue. Never fear, we are here to walk you through what to do next.

How Long Has the Rent Check Been Lost in the Mail?

First, learn when the rent check was mailed. Unfortunately, the US Postal Service is not always prompt. Mail sometimes does take longer than usual to get to you. If the rent check is within a few days of when you normally would receive it, you might want to wait.

Cancel and Resend

When too much time has passed, the safest thing to do is to cancel the missing check. Have the tenant contact their bank and cancel the check. Be aware that banks often charge a small fee to do this.

Next, have the tenant resend a new check to you.

Consider Online Rent Payment

Why not remove the stress and time spent dealing with lost or delayed rent checks? With online rent payment services like ClearNow, once your tenants are setup, rent payment is made automatically. Whether you’re out of town, or the post office is unreliable, rent appears in your bank account – no more rent check lost in the mail.

Online Rent Payment and Roommates

Online rent payment and roommates
Online rent payment makes roommate situations easy when paying rent.

Landlords and tenants want a fast and easy way to collect and pay rent. Online rent payment is the answer for both parties. In roommate situations, landlords may require a single payment or permit each roommate to pay their pre-determined portion. Paying rent electronically makes roommate situations super easy.

One Roommate Pays for All

Some landlords require full payment of rent from a single person in a roommate situation. By collecting rent from one person, the landlord increases her chances of getting paid in full. She also saves time on hunting down the remaining rent payment from various roommates. Online rent collection is still the easiest method for collecting and paying rent even if just from one tenant. ClearNow and many other online rent payment services cater to landlords with roommate situations.

Each Roommate Pays Individually

Landlords who permit each roommate to pay their pre-determined portion of rent from their own bank account eliminates the “middle person”. That “middle person” is not only the roommate who makes the rent payment in full from her own bank account but also the roommate who has to make sure each roommate has paid her. When each roommate pays individually, they just need to make sure they have enough funds to make their payment successful every month. Each online rent payment service has different features on how they handle roommates and payments.

Whether you have each roommate pay individually or a designated roommate pays for everyone, collecting and paying rent online makes the entire process fast and easy!

The Convenience of Online Rent Payment

Convenience of online rent payment
Landlords and tenants benefit from the convenience of online rent payment.

Online rent payment (also known as online rent collection) is a method that uses technology to pay and receive rent electronically. There is no paper involved with online rent payment, whether it be in the form of cash, check, or money order. Instead, rent is paid and collected by paperless methods like credit cards or by electronic withdrawals from and deposits to a bank account. With today’s modern technology, landlords and tenants benefit from the convenience of online rent payment, which saves time and improves communication.

Saves Time

For landlords, online rent payment eliminates any trip to the bank to deposit rent as rent is directly deposited to the landlord’s bank account. Online rent payment can also streamline the bookkeeping process. Depending on how landlords track rental income and expenses, some online rent payment services, like ClearNow, have landlord accounting built in such that rent payments are automatically recorded in the books saving the landlord even more time.

For tenants, online rent payment eliminates the need to write a check and mail it or visit the leasing office to drop off rent. Additionally, tenants do not need to schedule payment, as some online rent payment services will automatically debit tenant bank accounts on a recurring basis for the lease term.

Improves Communication

Most online rent payment services provide a range of communication beneficial for landlords and tenants. Examples include rent reminders for tenants to prepare for upcoming withdrawals, emails for landlords of failed tenant payments, and payment histories for both. Such communication and transparency enhances the landlord/tenant relationship and off loads this task making online rent payment convenient.

According to Yahoo, the overall trend of online payments is increasing in popularity. In the past, setting up online rent collection was challenging. Today, there are a number of online rent payment services to support landlords and tenants creating convenience for both parties.

Getting Tenants to Pay Rent Online

Getting Tenants To Pay Rent Online
Tenants Often Find that They Love the Ability to Pay Rent Online

Landlords love getting paid rent automatically. Online rent payment is a no brainer; it saves you time and encourages tenants to pay rent on time. But, what can landlords do to get tenants to pay rent online?

In ClearNow’s experience, tenants are most open to signing up for online rent payment when they sign or renew a lease.

In some cases, you will need to convince your tenants to sign up for online rent payment. Fortunately, tenants who pay rent online can look forward to many benefits:

Paying Rent Online Is Secure

We all tend to be a little hesitant to making change. For tenants who are used to paying rent via check, an automatic debit to their bank account can be scary.

Thankfully, online rent payment services tend to be even more secure than paying by check. With ClearNow, for example, the landlord never sees your bank account number (in the check world, this number is on every check).

Moreover, with a service like ClearNow, a tenant can contact an independent third party and stop payments if there is ever a dispute.

Online Rent Payment is Convenient

We’ve all learned from online shopping with Amazon that saving time is super nice. For tenants, never having to write or drop off a check saves time and effort!

Even compared to something like PayPal, with ClearNow online rent payment, tenants receive an email notice each month eight days ahead of time that rent will be debited – there is nothing to log into and schedule.

Pay Rent Online To Build Credit History

Most tenants do not realize that they can build credit history by paying rent online! ClearNow has offered this feature since 2011 -at no charge to the tenant. A good credit history is so important in the modern world. For example, it can lead to lower loan costs and a healthier employment background profile.

Tenants Benefit from Paying Rent Online

Next time you are preparing a new lease or lease extension, let your tenants know that you would like them to pay rent online. With a service like ClearNow, tenants can enjoy the safety, convenience, and credit building of online rent payment.

Simple Ways to Increase Rental Income & Value of Rental Property

Increase Rental Income and Value of Rental Property
Landlords can increase rental income & value of rental property in a few simple ways.

Successful landlords want to increase rental income and the value of their rental property. There are some simple ways to achieve both goals. With any business, investing in your property so that you can offer more value can justify commanding a higher rent from tenants.

Boost Curb Appeal

One of the driving factors tenants consider when searching for a rental is location. If your property is located near parks, popular businesses like grocery stores, or main travel routes, stressing the benefits of the physical location of your rental property can boost interest and value. Following close behind geographic location is the curb appeal of your property. Is the exterior clean and in good shape? Is the landscaping neat and attractive? If the answers to these questions are “YES”, then you’re already one step ahead in providing value.

Take a Look Inside

You don’t have to do a major renovation to make the interior of your rental property feel fresh and clean. Instead, simple upgrades like a fresh coat of paint, new hardware, and brighter lightbulbs can create an attractive vibe. And something as simple as a good scrub – in the bathrooms and kitchen for example – make a clean unit go a long way. If the interior of your rental property looks and feels great, then it’s easier for you to find a tenant willing to pay your asking rent.

Sell Amenities

Who doesn’t like great amenities especially if they are included in the rent? You may be able to earn more if you charge a la carte for extras, but no one likes to be nickeled and dimed. If you offer great amenities just include them as part of your rent and thus get the asking rent that you want. Here are some amenities that can increase the value of your property and your rental income:

Online rent payment: Tenants want an easy way to pay rent. If rent payment is on auto pilot for tenants, it will make your life easier to get paid. Consider services like ClearNow or RentPayment for online rent payment.

Short term leases: Typically, rents tend to be higher for shorter term leases. So if you have a prospective tenant willing to pay more for a shorter than standard lease term, you can enhance your rental income.

Washer/Dryer/Garage/Storage: If you can provide tenants with an in unit washer/dryer, plenty of storage, and an easy place to park the car, you will set your rental property apart from the others. Tenants enjoy having these items, and these amenities will help you fill vacancies and an opportunity to raise the rent.

Boosting curb appeal, improving the look and feel of the inside, and offering great amenities will draw tenants to rent your property all the while enabling you to increase your rental income and value of your rental property. These steps are easy to take and can make a lasting difference.

Month to Month Rental Lease – The Pros & Cons

Every lease agreement addresses the length of occupancy of the rental property. The majority of leases are usually for one year with the option to continue on a month to month basis. However, some leases can start out on a month to month basis. A month to month lease applies each month until the landlord or tenant exercises the required advance notice to vacate or terminate the lease. Here is a look at the pros and cons of month to month leases:

Pro: Flexibility

Probably the most important pro is the flexibility for both landlord and tenant to not be locked into a lengthy lease term. Tenants who are uncertain of the area or of their job situation may prefer the flexibility of a month to month lease. Landlords benefit by having the freedom to do as they wish with the property whether it be construction-related or wanting to change terms of the lease without facing a lengthy time commitment before being able to make changes.

Pro: Higher Rents

Landlords can generally charge a higher rent amount for month to month leases. The risk involved with a shorter term lease where tenants can move out at any time (with the proper advanced notice) can be offset with the higher rent required with a month to month rental lease.

Con: Turnover Costs

Landlords incur costs every time they have a new tenant: advertising costs, screening costs, property upkeep costs. So when a tenant does not stay for very long, landlords need to start the process all over to fill the vacancy. The time crunch to fill a vacancy can create pressure, so the fewer turnovers landlords face, the less pressure they have to hurry and fill vacancies.

Con: Less Stable Income

Because a tenant can move out at any time (with the agreed upon advance notice) with a month to month lease, a landlord may not be able to fill the vacancy in a timely manner. For example, if the tenant vacates in the middle of winter, it may be harder to find a new tenant during that season. An empty unit means no rental income.

There are pros and cons with month to month leases. For landlords who opt to offer such, they can use an online rent payment service that makes managing rents for month to month leases easier for both themselves and tenants. When it comes to the type of lease term, landlords and tenants can consider if a month to month rental lease is good for them.

Tips on How to Advertise Rental Property

Tips on How to Advertise Rental Property
Advertise Your Rental Property

Every business needs customers to generate revenue. For landlords, those customers are tenants. So when a tenant vacates, it is critical for the landlord to fill the empty unit as quickly as possible. The longer the rental property is empty, the longer the landlord does not make any money. Here are some tips on how landlords can advertise rental property effectively:

1. Decide Where to Advertise

Landlords should think about where most of their tenants will search for an available property to rent. Online advertising is one of the most popular and wide-reaching methods today. Landlords can advertise listings with a real estate specific site such as Zillow (note: Zillow has started charging $9/week for ads for a property) or Apartments.com. Other online options include social media platforms like Facebook or Nextdoor or a more general site such as the very popular Craigslist. A simple yard sign can still catch the eyes of a promising tenant.

2. Post High Quality Pictures

For tenants who prefer to search online, pictures become a critical basis for decision making. Landlords should post high quality photos of the empty unit so tenants searching online have a good idea of the rental property and can make a decision from the photos alone. Once a tenant is serious, they benefit from a physical walk through of the rental property.

3. Be Responsive to Inquiries

In describing your rental property, identify key selling points. For example, you will want to mention if you accept online rent payment, as that may be an important criteria for tenants. While the description of your property for rent should be thorough, tenants may have questions. Providing accurate contact information and responding promptly to inquiries makes your unit and your reputation as a landlord positive selling points. Being a responsive landlord will help you meet your goal of filling your vacancy as quickly as possible.

Good Advertising will Fill an Empty Unit

Advertising your rental property online or on paper, showing your rental property with good pictures, and being responsive to inquiries are all steps in the right direction to filling your vacancy.

Hiring a Property Management Company to Collect Rent and More

Landlording can be an exciting adventure for some. It involves building a business to collect rent payment and generate income while providing housing to customers (tenants). Some landlords prefer to do everything on their own, and some prefer to take a more hands off approach and hire a property management company to do it all. And then there are some landlords that want to control some aspects of the business – like filling vacancies – while turning over other responsibilities – like maintenance and rent collection – to a property management company. In any event, hiring a property management company comes at a cost as they charge fees for their services. We’ll take a look at some landlording responsibilities and the pros and cons of doing it yourself or hiring a property management company.

Collecting Rent

As a landlord, there is nothing more important than getting paid through consistent on-time rent collection.

ProsCons
DIY+Know your tenant
+Use online rent payment services like ClearNow & Cozy to simplify process
-Deal with delinquent tenants
-Need to understand eviction process
Hire Property Management Company+Enforce lease policies for late or unpaid rent
+Use online rent payment services like ClearNow & Buildium to directly deposit owner proceeds
Pay property management fee typically as a % of rent collected

Screening Tenants

Finding a tenant that will pay rent on time and keep your property in good condition takes time, so screening tenants becomes an important task.

ProsCons
DIY+Easy to screen without a site inspection
+Credit & eviction reports help eliminate guesswork
-Potential lack of experience with the application and screening process
-Need to develop tenant onboarding method
Hire Property Management Company+Trained eyes to spot good tenant qualities & red flags
+Established process from application to screening to lease signing
– Pay property management fee

Advertising/Listing Properties

Before you can collect rent payment, you have to fill your vacancy. In addition to tenant screening, knowing where and how to place your ads are important tasks to finding the right tenant.

ProsCons
DIY+Easy to list vacancy online with high-traffic websites like Zillow & Trulia.
+Some rental property accounting software like Rentec Direct and Buildium includes listing features
-Need to manage inquiries and property visits
Hire Property Management Company+Expertise at rental marketing to fill vacancies quickly
+Have local real estate knowledge to help set competitive rents
-Pay property management fee

Final Considerations

Hiring a property management company to collect rent, screen tenants, advertise vacancies, and more will likely be based on finding a balance among effort, time, and money. If you can afford the expense of a property management company to free up time and reduce headaches, then that is a win for both parties. At the same time, many of today’s landlord resources have features that benefit both the property manager and owner, like ClearNow’s owner proceeds. As a landlord, you have choice to make the decision easier of whether or not to hire a property management company for your landlording needs.