Implementing New Payment Systems for Property Management
Property management can be complicated. If you manage more than just a small handful of units, you have to deal with a lot of headaches and hassles. This is especially true when it comes to getting rent payments.
Few property management firms and landlords have time to chase and track tenants. That's why many are turning to payment solutions for property management. These digital payment platforms make collecting and tracking rent easier for property managers. They also offer solutions that help tenants, including new ways to pay their rent.
If you're a landlord or run a property management firm, it might be time to consider upgrading your current payment system.
The challenges with checks
For a long time, checks have been the primary form of rental payment. But they come with more than their share of headaches, especially for property managers.
First, checks are very easy to lose. Because of their unique shape, they don't file well and are easy to lose in paperwork—or worse, to accidentally throw away.
Another issue with checks is that payment isn't immediate. A check might be written on the day rent is due, but if a tenant waits a few days to mail it, and then it takes another day or two to arrive from the postal service, it could be a week before you cash that money. This lag time can wreak havoc with keeping your books in order and managing cash flow.
Checks can also pose a potential security risk. A check lying around on a desk can expose someone's private address, phone and bank account information. You need strict handling and privacy protocols to ensure this information doesn't get into the wrong hands, and these can add another layer of complication to dealing with checks.
While checks may still remain a fall-back, they aren't the only option available any longer. Digital payment solutions for property management are becoming more popular with landlords.
With the advent of online banking and bill payment, most people pay at least some of their expenses by digital bank transfer. The same is true for your tenants. Being able to pay their rent online along with their phone and car bills might already feel like a second-nature switch to most of them.
Online portals also provide tenants with more payment options. They can use multiple bank accounts or credit cards to pay their rent according to their needs or preference, and switching between methods is easy. Your tenants can also pre-schedule their payments to automatically go out on their due date, ensuring they always pay rent on time.
Those on-time payments help landlords and property managers, too. Digital payments move very quickly. There's no long-term wait for the money to hit the account. That's a big help when it comes to keeping track of and managing cash flow. Your business can run much more efficiently when you know when income is likely to come in and can plan your expenses.
Online payments are also much more secure. Using encryption, the tenant's payment information is safe during every stage of the payment process. Cloud-based systems maintain digital receipts you can access at any time, so both landlords and tenants have payment records easily available.
Payment solutions for property management can also help open smoother lines of communication. Someone who's worried about being a day or two late in rent might be more comfortable responding to a reminder email instead of going to the rental office. Plus, many of these solutions let you send out reminders, invoices and receipts automatically.
Opting for an online approach
Regardless of how big or small your business is, there are online solutions that can help manage your needs and streamline your processes. Being able to use a property management payment tool to automate much of the rent management process can be a big boost for both your business and your tenants. It can make their experience much easier, promote positive reviews and build up a positive reputation for your company in the community.
Financial insights for your business
This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.