Online Rent Payment by Credit Card

Online rent payment by credit card
There are pros and cons of online rent payment by credit card for tenants.

In today’s mainly paperless world, online rent payment has almost made rent payment by check, cash, and money order extinct. Instead, payment by ACH and credit card have become more popular mainly because they are convenient payment methods. Between the two, we’ll look at the pros and cons of paying by credit card.

Pros

  1. Convenient: You don’t have to go through the trouble of writing and mailing a check. If you can pay rent by credit card, you’ll provide your card information over the phone, online, or in person. The effort is minimal.
  2. Rewarding: Most credit cards today are tied to rewards. Such rewards can appear in the form of cash back or points. Every time you use your credit card whether it be for merchandise or online rent payment, you earn rewards.

Cons

  1. Access: Many landlords do not accept credit card payments mainly due to the high cost that credit card companies charge. So tenants need to find landlords willing to accept credit cards for rent payment. If you can’t find a landlord willing to accept credit cards, then find one who will still accept online rent payment by way of an ACH debit (direct transfer from bank account to bank account). An online rent payment service like ClearNow is beneficial for landlords and tenants who want to do ACH debits.
  2. Fees: Once you find landlords willing to receive rent payment by credit card, be prepared to pay a fee. Most credit cards charge based on a percentage (usually 2% to 3%) of the amount charged making it quite expensive. For example, a $1000 rent payment can realize $20 to $30 in fees.

How to Attract Grads to Your Rental Property

Attract Grads
If you want to attract recent grads, be tech friendly and provide great amenities.

One of the many tasks of landlords is to fill vacancies. If you can fill vacancies quickly, then that is a win for you. Factors such as location, rent amount, and amenities can affect how quickly you can fill your rental property. If you want to attract grads to your rental property, here are some tips to help close the deal.

Be Tech Friendly

Recent grads, also known as graduates or millennials, are very comfortable with technology and as a result, expect it to be an active part of their lives. You can start attracting grads as applicants with online advertising of your rental property. Zillow is one of the most popular places you can advertise. Additionally, online rent payment would be expected to attract grads to your rental property. Long standing services like ClearNow make online rent payment very easy for landlords and tenants. Taking the hassle out and making the payment process easy is attractive. And if you use ClearNow for online rent payment, your millennial tenants can build a credit history by having their payment data furnished to Experian.

Feature Great Amenities to Attract Grads to Your Rental Property

Great amenities can attract all tenants, even graduates. Here are some that are easy to implement:

1. Provide reliable and wide-ranging wifi. Easily accessing the web from every space of your rental property is attractive and reduces frustration.

2. Make your rental property pet friendly. Many millennials have pets; therefore, allowing pets may fill your vacancy faster. A financial benefit for you is the additional rent or fee you require for housing a pet.

3. Create social spaces. Outdoor fire pits and grilling areas are great social spaces for tenants. Having a dedicated place to entertain can be a strong renting point.

There are simple steps you can take to attract grads to your rental property. As a result of understanding their needs, you make filling vacancies that much easier.

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.

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.

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.

Mobile Deposit and Rent Checks

One of the satisfying conveniences of the smartphone revolution has been the introduction of “mobile deposit” (using an app to take a picture of a check and deposit it). For landlords and property managers, mobile deposit of rent checks is a big improvement over driving to a bank branch or ATM. But, is the mobile deposit of rent checks the best way for a landlord to receive rent payments? Often there are significant drawbacks with mobile deposit that are overlooked.

The downsides of the mobile deposit of rent checks:

  1. Mobile deposit is still based on receiving a paper check – typically by USPS mail – and this can mean delays and lost checks. The dirty little secret of bank online bill payment is that it is still based on sending checks to landlords and property managers. Only the largest bill payment recipients, like utility companies, get paid electronically. This means most landlords whose tenants use bank online bill payment are still receiving checks. And, mail can get lost or delayed.
  2. Mobile deposit of rent checks often have a hold period or delay. Different banks put different “holds” on access to funds that are mobile deposited. While the first $200 must be available the next day, sometimes the delay on larger amounts can be many business days.
  3. Mobile deposit of rent checks can still bounce. If the tenant does not have enough funds by the time you deposit the check, you will likely be charged an insufficient funds fee (NSF) (often between $27 to $35). Even if the tenant had sufficient funds when the check was created, due to other withdrawals, the tenant may have insufficient funds by the time you deposit a check.

A more advanced method of collecting rent from tenants is “online rent payment“. With online rent payment, there is no paper rent check – payments go directly from a tenant’s bank account to the landlord’s bank account. The beauty of online rent payment services is that there’s no checks in the mail to get delayed or lost. Even if the landlord is on an extended vacation (everyone’s wish!), the deposit will occur.

One of the oldest and most trusted online rent payment services is ClearNow. For a small monthly fee relative to the rent collected, landlords save time, collect rent faster (in 3 business days the funds are usable), and issues with lost or delayed mail are a distant memory. A landlord can enroll with ClearNow at www.ClearNow.com.