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Landlords Make the Transition from Checks to Online Payments for Rent

INTRODUCTION

Paying rent with checks is now considered a thing of the past. Gone are the days when you have to physically meet the tenants, get their checks, and deposit them every month. Things have changed now. With the advancement in technology, the notion of paying rent through checks has transitioned to online payments. Most landlords have converted to online payments and Automatic Clearing House (ACH), which is a way of transferring money electronically to different accounts from one bank to another bank.

ACH/ONLINE METHOD

According to a survey conducted by SmartMove, payment problems are a top concern for landlords. From calling the tenant to paying rent –to- giving notices on late payments and more, the whole process is timely and can take a toll on them; But things have changed and making payments has become easier than it was in the past. Different methods are now being employed to pay rent, the most common being the use of  an  ACH/online payment service.

Electronic/Online payment options are becoming part and parcel of every business nowadays. To name a few, e-Commerce, retail shops, rental payments, and restaurants, are some of the major industries that are using this service. The ACH payment is becoming popular among the masses. and in 2019, more than 24 billion ACH transfers were conducted. Since then, it has  grown in the real estate industry. It’s no surprise that property owners prefer transferring the money through the ACH system than to have checks in their mail. Research conducted in 2014 on online payments, resulted that 47.4 percent of companies using online payment methods. The online payment system has the easiest interface, you just need to set up your account on an online payment platform such as Pinpoint Payments and in a matter of minutes, your rent gets transferred to your account. 

 Why Use an Online Rental Payment System?

Online rental payments have become an ideal solution to both the landowner and tenant, as they provide ease in all rental procedures. Some of the major reasons for adopting the ACH/Online payment method by landlords are:

Direct Deposit into your Account. The online rental payments that you receive are generally faster than the other alternative methods. It provides relief from the hassles of physically depositing the cash or the check into the bank account.

Real-Time Status of the Payment. The system records the payments and stores it in its database. The statuses of on-time, missed, and late payments are displayed to both the landowner and the tenant, making is easy to track the ongoing status and skip the paperwork for maintaining the data of the previous payments.

Fees for Late Deposits. Landowners now have an option to directly charge fees from the tenant for late deposit of the money. The landowner will fix the per day late fee so that the tenant pays the rent on-time.

Accountability of the Tenant Increases. Through online payments, the tenant is accountable to pay the full rent on time. Otherwise, the landowner has the legitimate right to take any action against the tenant.

Schedule the Recurring Payments. The tenants can now schedule their recurring payments so that they can pay the rent on time every month. A fixed amount will get transferred from the tenant’s account to the landlord. Through this, any inconvenience is avoided between the landowner and the tenant. 

Remote Working. The ACH/online payment method provides ease for getting things done from home. There is no need to have a meeting with the tenant to collect the check, and to make a trip to the bank to deposit it. The amount is transferred from the tenant’s account to the landowners with a single click only.

Safe and Secure Method. The online rent transfer is one of the safest and most secure methods for both the landowner and the tenant. For the tenant, it eliminates the concerns of lost or misplaced checks and for the landlord, it’s reassuring to know that the rent check will come on time every month, without them having to go to the bank to make separate deposits. Some landlords have multiple tenants so this will ultimately save them ultimate trips. 

Outdated Checks and Stamps. The stamp and the checks that were previously used are now demoded. A survey, conducted by Money Magazine reported that almost 61% of millennial and 42% older generation pay their bills through ACH or an online system.

Time-Saving. There is truth in the quote “time is money.” The ACH system helps to save the precious time of both; the landowner and the tenant. Just with one click, the payment is transferred.

CONCLUSION

It can be concluded from the above-stated discussion that the landlords prefer the ACH/Online payment system for paying the rent over the old-fashioned check writing way. It relieves them from the tensions of depositing the checks and cashing them. An automatic clearing house (ACH) system helps them to save their time and money and makes the renting process more streamlined. The system is beneficial for both the landlords and the tenants.

References:

https://www.investopedia.com/ach-transfers-what-are-they-and-how-do-they-work-4590120

https://www.mysmartmove.com/SmartMove/blog/how-to-avoid-renter-payment-problems.page

https://www.statista.com/statistics/556512/e-commerce-sales-channel-use-of-firms-providing-rental-and-business-support-services/

https://www.mysmartmove.com/SmartMove/blog/online-rent-pay-convenience-landlords.page

https://cozy.co/for-landlords/collect-rent-online/