As we reported back in March, some landlords and management companies are forcing tenants to pay rent through online services. Many question whether this is legal or not. The suit filed by the residents of Woodlake Manor Apartments is still moving through the court system, so it’s too soon to tell how that will shake out. But in the meantime, how can you convince tenants to switch over to online rent payment? And is it worth it?
Having rent payments flow automatically into your bank account can be convenient. Collecting checks, posting them in your accounting software, depositing them in the bank (or having your bookkeeper do it) takes time you could be spending on growing your business—or better yet, doing something fun.
Plenty of landlords receive rent payments through a variety of online tools—and neither they nor their tenants would go back to paper checks for anything. It seems most people you know do all their banking and bill paying online. So why not convert your tenants over to online rent payment?
Maybe your tenants won’t or can’t use online services. Perhaps they don’ t all have computers at home. Or they won’t take the time to learn how to use online services. If you are ready to be done with paper checks, maybe it’s time to help them move into the 21st century.
Try incentivizing tenants to transition to online rent payment with these step-by-step ideas:
- Send out a notice to all tenants that you are now offering online rental payment.
- List the benefits, such as avoiding writing and mailing a check, finding a stamp and sending the rent several days in advance of the due date. Online payments are more convenient: rent can be sent electronically on the due date. Tenants can schedule payments ahead of time to cover travel or vacations. Checks can’t get lost in the mail. And, it saves paper!
- Offer a one-time $10 or $25 gift card for tenants who sign up right away for online rent payment.
- You will be notified which tenants choose the online option.
- For those who choose not to use online payment, inform them that beginning with their next lease renewal, you will be requiring them to do so.
- If they still balk, give them the option of paying the entire new rent at renewal (whatever amount you would normally raise the rent) or a lowered amount for paying online.
Landlords may not be able to force all tenants to pay rent online. There will likely be situations where a tenant can’t get to a public library to use a computer, or is not able to understand how to use online banking. And tenants with disabilities are protected under law. Be reasonable and flexible, and collect rent online to the extent that you can.