How to set up recurring rent payments in 6 simple steps

Chasing down rent checks and manually updating your books each month takes time you don’t have, especially as your portfolio grows. Setting up recurring rent payments helps you get that time back, creating more predictable cash flow and reducing late payments. It’s a foundational step toward running a more efficient business.

But where do you start? The thought of switching systems can feel like a big project. This post breaks the process down into six straightforward steps. We’ll walk you through everything from preparing your accounts and communicating with tenants to monitoring your first payment cycle and handling compliance.

What Are Recurring Rent Payments and Why Switch Now?

Recurring rent payments are automated monthly charges that process on a set schedule without your manual intervention. Once a tenant authorizes their bank account or card, rent collection happens on the same day each month, and the funds flow directly into your designated account.

This stands in contrast to manual collection methods. Chasing down checks, making trips to the bank, and processing one-time online transfers all take up valuable time. Each of these methods requires you to track who has paid and follow up with those who haven’t.

For you as a property manager, setting up recurring payments can reduce late payments, since tenants can’t forget when the payment processes on its own. This approach can also lead to more predictable cash flow and automated record-keeping in your accounting books. Instead of spending time on rent collection, you can focus on other parts of your business.

Tenants often appreciate the convenience, as well. They can set it and forget it. Some platforms offer credit reporting services, as well, which can help tenants build their credit history with on-time rent payments.

You might have some hesitations about the setup complexity or whether tenants will adopt a new rent payment system. These are fair points. However, many property management platforms are built to handle various payment methods, including ACH bank transfers, credit cards, and even cash payments at retail locations. The setup process is often more straightforward than you might think, and most tenants prefer the convenience once they try it.

With the right approach, switching to recurring rent payments can happen quickly. Now that we’ve covered the what and why, let’s walk through exactly how to set them up.

Set Up Recurring Rent Payments in Six Steps

Getting recurring rent payments running across your portfolio takes some planning and careful execution. Following these six steps will guide you from the initial setup all the way through to optimizing your new rent collection process.

1. Prepare Your Ledger, Chart of Accounts, and Payment Rails

First, check that your property management software has payment processing capabilities. Not all platforms offer integrated payments, and adding third-party processors later can create extra work and data entry. It’s often easier to work with a platform that handles payments natively.

Next, you’ll apply for a merchant account, which is an account that allows your business to accept electronic payments. Applications typically take 5-10 business days for approval. While you wait, you can connect your bank accounts to designate where rent deposits should land.

You should also configure your general ledger codes for different types of income. By creating separate GL codes for rent income, late charges, and other recurring charges, you keep your financial records clean from the start. Finally, enable the payment methods your tenants are most likely to use, such as ACH bank transfers, credit and debit cards, or even a cash payment network.

2. Define Rent Schedules, Proration, Late-Fee Rules, and Partial-Payment Policies

With your payment infrastructure in place, it’s time to define the rules of the road. Set your standard due dates and grace periods before you launch recurring rent payments. Rent is often due on the first of the month, and many leases include a 3-5 day grace period—verify specifics under applicable state law and your lease terms.

Configure your late-charge structure, as allowed by local law and your lease. It’s a good idea to check your state and local regulations first, as some jurisdictions place limits on late charges. Also, document your formula for prorating rent for tenants who move in or out mid-month.

Decide on your policy for partial payments. Buildium supports partial payment settings at the lease/resident level; confirm whether you want to allow or restrict partial payments based on your policies and local laws. Getting this policy right from the start prevents confusion later.

Keep in mind that requirements vary by jurisdiction, so check with a legal professional in your area.

3. Configure Recurring Charges and Tenant Autopay

Now you can create recurring charge templates at the property or unit level. In your property management software, you can set the rent amount, frequency, and the corresponding GL code. Buildium supports entering charges in bulk, enabling you to apply the same charge setup across multiple units at once.

Next, choose your autopay enrollment approach. You might make it an opt-in choice for tenants or you could require autopay as part of the lease agreement. The right choice often depends on your market and tenant demographics. ACH retries must comply with NACHA rules (typically up to two reattempts for NSF/insufficient funds); consult your processor for configurable retry settings.

Don’t forget about one-time charges such as security deposits or pet fees. These are usually added to a tenant’s account separately from their recurring rent payment. Before you roll this out to your entire portfolio, it’s a good practice to test the full payment cycle with a single unit to confirm everything works as expected.

4. Onboard Residents with a Communications Plan and Adoption Incentives

Provide clear advance notice (for example, a few weeks) and instructions before launching online payments; timing should fit your residents and local requirements.

Follow up with step-by-step enrollment instructions, including screenshots of each screen tenants will see. A visual guide can help reduce confusion and support calls.

You might also offer adoption incentives to encourage sign-ups. Some property managers waive certain setup costs for the first month or enter early adopters into a gift card drawing. Another popular option is partnering with a rent reporting service to help tenants build their credit with on-time payments.

For new tenants, you can make autopay enrollment part of your standard move-in checklist. You might also host optional Q&A sessions or office hours for current tenants who have questions about the new process.

5. Run a Test Cycle, Monitor Failures and NSFs, and Set Retries and Dunning

When you process your first automated cycle, monitor it closely. Keep an eye out for payment failures, error messages, or any unusual patterns. It’s helpful to review each failed payment to understand why it didn’t process.

Based on what you learn, you can set up your retry schedule. Use a compliant, clearly communicated retry policy (e.g., up to two reattempts for NSF within network rules) rather than fixed calendar dates. This gives tenants time to address any issues with their bank account.

Configure your automated reminder sequence to match your retry schedule. For ACH, limit reattempts to what NACHA allows (typically two for NSF) and set a reminder cadence that fits your policies and local law. Be sure to document every payment attempt and communication for your records.

6. Reconcile, Report to Owners, and Optimize Delinquency Tracking

As deposits arrive, match them to your bank statements. Automated bank reconciliation, a feature in many property management platforms, can help with this process by connecting directly to your bank and matching transactions for you (ePay Basics).

Next, generate owner statements that show collected rents and any pending payments. You can set up automated monthly reports to keep your owners informed without needing to create them manually each time . You can also create delinquency reports to identify any patterns or problem properties.

Finally, review key metrics each month, such as your adoption rate for online payments, the percentage of on-time payments, and any trends in failed payments. Schedule a periodic post-launch review (e.g., after 1-3 months) to adjust policies and optimize rent collection.

Getting these steps right is one part of the equation. Choosing the right payment options for your tenants is just as important for driving adoption.

Payment Methods, Fees, and Adoption Choices That Work

Offering a variety of payment methods helps meet different tenant needs and can improve adoption rates for your online rent collection system. Understanding the options helps you choose the right mix for your portfolio.

ACH bank transfers are often the most popular choice. They typically have low processing costs, and the funds usually settle within 1-2 business days (timing varies by bank/processor) . Most tenants are familiar with connecting their bank accounts for payments, which can make adoption of this payment method straightforward.

Credit and debit cards offer instant authorization but usually come with higher processing fees. Card payments are typically authorized immediately and, on Buildium, incur around a 2.99% processing fee; funding often occurs the next business day depending on processor settings . Some tenants prefer paying with a card to earn rewards points or for the flexibility it offers. Accepting cards can be a good way to accommodate tenants who need that payment option.

For unbanked residents, cash payments at retail locations can be a helpful alternative. Through networks that include stores such as CVS and 7-Eleven, tenants can pay their rent in cash . They receive a unique barcode on their phone, show it to the cashier, and make the cash payment . The funds are then sent to you electronically.

When it comes to processing fees for these payment options, you have a few choices. You can absorb the fees, pass them on to tenants, or use a hybrid approach. The decision can affect tenant satisfaction and your bottom line.

Property management platforms like Buildium, for example, often have integrated payment systems like ePay that handle these different payment types . Many also connect with rent reporting services, which can be a great incentive for tenants to pay on time .

Offering these different payment methods means you’ll be handling sensitive financial data, which brings us to the important topic of security and compliance.

Security and Compliance for ACH and Card Payments

Handling tenant financial information means payment security is not optional. There are two major compliance frameworks that govern electronic rent payments, and understanding them helps protect your business.

For ACH transactions, NACHA compliance is key. The National Automated Clearing House Association sets the rules for how you collect authorization, store data, and handle any disputes. You need written authorization from tenants before you can pull funds from their bank accounts, and you should keep these authorizations on file.

For credit and debit cards, you’ll need to follow PCI compliance. The Payment Card Industry Data Security Standard requires encryption for all card data, both when it’s being transmitted and when it’s stored. Storing card numbers in spreadsheets or emails is not a compliant practice.

To protect sensitive banking details, you can use a method called tokenization. Tokenization replaces actual account numbers with random tokens that are useless if stolen. Only the payment processor can link these tokens back to the real accounts. When tenants need to update their payment information, they should do so through a secure online portal, not over email or text.

Many property management platforms, including Buildium, are designed to handle these compliance requirements for you. They maintain the necessary certifications and use bank-level encryption, giving you the security you need .

With a solid understanding of the setup, payment methods, and security, you’re ready to put it all together and automate your rent collection. However, trust accounting requirements vary by state, so consult with a legal professional for compliance.

Put Recurring Rent on Autopilot Across Your Portfolio

Setting up recurring rent payments can change your rent collection from a monthly task list into a predictable, automated process. You’ve walked through the six-step implementation process, from getting your payment rails ready to optimizing your system based on results.

Here are the key takeaways to remember:

• Start with a proper setup by configuring your accounts, defining clear policies, and testing your payment rails to build a strong foundation.
• Focus on tenant adoption through clear communication, offering enrollment incentives, and giving them multiple payment options.
• Monitor and optimize your system continuously by tracking metrics, adjusting retry schedules, and refining your reminder process based on what you learn.
• Choose a platform that helps you handle compliance, integrations, and reporting to reduce manual work for your team.

If you’re ready to get your recurring rent payment system buttoned up, you can see how it works with your properties by signing up for a 14-day free trial or scheduling a guided demo for personalized guidance .

Frequently Asked Questions About Recurring Rent Payments

How Long Do ACH and Card Payments Take to Deposit?

ACH deposits commonly settle in about 1-2 business days; card payouts often fund by the next business day (timing varies by bank/processor) . Processing times can vary by bank and payment processor, so it’s a good idea to verify specific timelines with your provider.

Can I Block Partial Payments During Collections?

Buildium provides lease/resident-level partial payment settings; use them according to counsel’s guidance for your jurisdiction . You can typically turn this setting on or off as needed for specific tenants, and since laws vary by state and locality, it’s important to consult with a qualified legal professional.

What Retry and Dunning Schedule Should I Use After a Failed Payment?

For ACH, limit reattempts to what NACHA allows (typically two for NSF) and set a reminder cadence that fits your policies and local law. You can start with a friendly reminder, then move to a formal notice, and finally a late fee warning, but be sure to adjust your schedule to align with your state’s laws and your lease terms, as requirements vary by jurisdiction, so check with a legal professional in your area.

How Do I Handle Proration and Move-Outs When Autopay Is Active?

Buildium supports editing/canceling autopay schedules and automatically calculates prorated rent; use edit/cancel to end autopay for early move-outs . You can typically also override autopay manually for unique situations, such as early move-outs.

Are ACH and Card Payments Compliant with NACHA and PCI Standards?

Reputable payment processors maintain the required NACHA and PCI compliance certifications to protect your business and your tenants’ data. You can verify your platform’s compliance status and keep documentation for your records.