You know that accepting manual rent checks is expensive. It can take five minutes and cost $2 on average to process each one. If you’re handling 500 checks a month, you’re spending close to 42 hours and $12,000 a year just on processing manual checks. Implementing a system of online rent collection with your web-based property management software can cut this cost in half. Collecting rent online also avoids the problem of either waiting for checks to arrive in the mail or having to go and pick up the rent.
The challenge is getting your residents to sign up for such a program. Chances are your more technically savvy tenants – those who are already using online banking – won’t have an issue.
However, you still may get resistance from other residents. And to that end, here are 10 ideas for convincing such tenants to pay rent online:
- Offer an incentive to pay online. A $25 monthly reduction might be attractive for your more frugal tenants.
- Offer an option of two payment dates for online payments – the first and the fifth of the month as an example. Such a flexibility option could be an incentive to residents.
- Offer a signup incentive like a $20 gift card to Starbucks or local restaurant for anyone who signs up.
- Enter everyone who signs up for online payment into a raffle for a $100 gift certificate to a local store.
- Explain that payments can be automatically reported to national credit agencies. That’s a great way for them to boost their credit rating.
- Explain that online payments are more environmentally friendly. More people today are interested in “going green.”
- Put together a one page FAQ sheet to post and distribute to your tenants. You can list the advantages of online payments, including the timesaving convenience of not having to write checks and avoiding fees for late payments.
- Write a requirement to pay online into the rental agreement. (Note, some states like California have laws preventing this.)
- Charge an extra service fee of $25 per month if they opt not to pay online.
- Be a responsible landlord. Respond to customer issues promptly and maintain your property. If you take care of your tenants, they are more likely to cooperate and comply with your request for online payments.
As with many issues, the best way to encourage your residents to agree to online payments is to communicate with them clearly, transparently and often. Once they realize there are benefits to them as well as you, they may be more willing to sign on.
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