If you’re like most property managers, you have lots to do but precious little time to do it. Whether you’re a landlord with just a few rental properties or a professional property manager managing hundreds of units, this is always the case. While (unfortunately!) you can’t tack a couple more hours onto the day, there are some things you can do to work smarter.
Let’s take rent collection, for example. Have you ever have calculated how much time you spend dealing with checks? Even if you haven’t done the math, we can all agree it takes way too much time. Each month the rent checks come pouring in, requiring time-crunched property managers and landlords to open envelopes, figure out which check is whose, record rents paid and rents still owed, fill out deposit slips, and trek off to the bank. There must be a better way.
Want more proof? A recently published Gartner research study shows that it costs between $2 and $5 to send a paper bill and another $10 to process a paper check. Whether you buy Gartner’s numbers or not, the bottom line is it costs many of us way more than it should to collect rent payments each month. This is supposed to be income generation, after all.
Here’s what Andrew Block, head honcho at the Boston-based property management company The Hamilton Company has to say on the matter:
We have been looking for a solution where we could send a statement to our many tenants either by email or fax and to allow our tenant to be able to make payment over the internet. Our company processes a significant number of transactions each month and it is very costly to send out statements. The problem with paper checks is that it takes a lot of time and money to handle them.
Okay, so if it costs too much to collect rent by check each month, what’s the solution? One option is to accept credit cards—with services like PayPal, anyone can do it. But bear in mind, while credit cards are more convenient than checks, they’re also an expensive way to go. With credit card companies charging between 2 and 4 percent of each rent payment, costs can add up fast.
A better option is to debit your tenant’s bank account directly, just like stores do when you use your ATM card. Online rent collection services allow you to withdraw rent from your tenants’ checking or savings accounts and automatically deposit it to your bank account. And instead of charging 2 to 4 percent of the rent payment, these services generally charge much less—sometimes as little as 50 cents per payment.
If you factor in what your time is worth (let alone the cost of gas these days), collecting rent online makes a ton of cents. And what’s not to like about that?Read more on Accounting & Taxes