Online rent payment systems: What’s the best way to accept rent?

Laurie Mega
Laurie Mega | 6 min. read

Published on April 4, 2023

There was a time when paying rent via credit card was almost unheard of—and you probably remember it. Owners preferred checks that residents either dropped off or mailed in. But as technology advances and residents turn to digital payment for all of their everyday transactions, many owners and property managers have changed their minds about checks and set up online rent payment systems to accept credit cards.

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The National Multifamily Housing Council (NMHC) conducted a study of 11.7 million professionally managed units across the country. They found that in June 2021, 77 percent of them had used credit cards to pay for their rent. And while that’s down from almost 95 percent for credit card rent payments last year (no doubt fueled by pandemic lockdowns and the need for contactless transactions), it still represents a significant number of renters.

Online rent payments can not only make your properties more attractive to residents seeking a high level of convenience, but also make your operations more profitable since it can cost your business anywhere from three to ten dollars each time you cash a physical check.

In this article, we’ll explore the pros and cons of credit card payments and give you an inside look at some online rent payment systems you can integrate into your property management business.

The Pros of Online Rent Payments via Credit Card

Before you determine which digital platform is best suited for your business and your residents, it’s important to think about the pros and cons of credit card payments. First, let’s look at the upside of online rent payments via credit card.

Pro #1: No Checks to Cash or Bounce

Your problem with checks is most likely late or bounced ones. If a resident has a sudden emergency or miscalculates their account balance, you could be left with a check that doesn’t cash—or no check at all. Allowing a credit card payment means the rent doesn’t depend on your renter’s account.

Renters can even set up recurring monthly payments, so they don’t even have to remember to make the payment themselves. It adds a level of convenience for them and security for you and your owners.

Pro #2: Speediness

If you get physical checks from renters on the first of the month, then you have to take it to the bank and wait for it to clear. Even if you use your bank’s check-cashing app, someone still has to take a picture of all those checks and there are still those few days to wait for the money to land in the account.

You can, however, set up debit or credit card payments to deposit directly into your bank accounts through a platform such as Buildium. You’ll get an email letting you know when the rent hits your account. It’s fast and easy!

Pro #3: Renters Will Love Earning Points—and Credit

Almost everyone has a credit card with some kind of rewards program (air miles, cash back, etc.). Since rent is a higher-ticket item to put on their card, residents can earn a good chunk of change (or points, or miles) every month.

If your residents are trying to build credit, a big, regular charge such as rent that they pay off on time will help them out immensely.

Pro #4: Use Rent Collection Platforms

Allowing credit card payments opens you up to a whole new world of rent collection. Software such as Buildium allows residents to pay rent through a resident portal, either by credit card or via their bank account. And, as we mentioned above, they can set up automatic payments, so they’ll never have to remember to pay on the first.

The Cons of Credit and Debit Card Payments

While there are certainly upsides to accepting online rent payments via credit card, there are some pitfalls to look out for, as well. Keep these in mind, especially, as you choose your online payment method.

Con #1: Processing Fees

Credit card companies and processing platforms normally charge a nominal fee for every payment processed. Buildium via ePay, for example, charges 2.95 percent.

Con #2: Credit Card Payment Disputes

Have you ever disputed a credit card payment? Your credit card puts a hold on the payment, investigates it and then determines if it should be paid or not. That takes time.

Residents could potentially dispute payments as well. If they have any cause for complaint, however small or unrealistic, they could dispute their rent payment and keep it held up with their company.

Additional Points to Consider

Even after you’ve weighed the pros and cons of online rent payments and looked at all the angles, there are still a few things to keep in mind as you get ready to make the switch:

  •  Budget for payment disbursement from credit card companies. If rent is due on the first of the month, it may still take a day or two for some credit card companies to release the funds into your account.
  • Make sure your resident has good credit. If your resident has good credit, that means they pay their bills on time. Of course, you most likely ran a credit check before they moved in during your screening process.

Online Rent Payment Systems

If you’re ready to accept rent payments via credit card, there are a few online rent payment systems to consider. Even if you’ve already implemented credit card payments, it doesn’t do any harm to look at other options to make sure you’re using the best system for your needs, as well as the needs of your residents.

Popular Payment Apps

When you think about online rent payments, apps such as Zelle, PayPal, and Venmo probably come to mind. Those apps make it very easy to send out scheduled invoices, accept and track payments, and link the money to your business account.

And while they don’t charge a setup fee, these service often do charge transaction fees. Venmo, for example, carries a rate of 1.9 percent plus $0.10 per transaction. A PayPal online rent payment using a credit or debit card carries an even higher fee of 2.99%. Zelle’s fees can vary based on the bank connected to users’ accounts.

Purpose-Built Apps for Online Rent Payments

There are apps similar to PayPal and Venmo made specifically for rent payments, as well. If you’re not a professional 3rd-party property manager, then some of those solutions may be worth considering. PayRent and Flex are some options that fit into this category, but be sure you can connect these tools with the rest of the software you use for property management.

Tools to Encourage On-Time Online Rent Payment

Increasingly, businesses are finding ways to incentivize better personal finance habits, and that extends to paying rent online. Services like Gravy help property managers incentivize on-time payments through perks like 5% back on rent each month (without any cost to you).

Comprehensive Property Management Software

Comprehensive property management software such as Buildium will offer more than just simple rent collection. Residents can set up recurring payments via their credit card, and property managers can track rent payments every month. Not to mention all the other benefits of a service such as Buildium, including resident screening, rental applications processing, credit checks, and resident communications through a resident site.

Residents use credit cards or automatic payments for nearly every other payment they make, from grocery shopping to phone bills. Accepting rent via credit card will integrate seamlessly into their already check-free lives. And, honestly, when was the last time you paid for something with a check?

Allowing rent payments via credit card offers a whole new level of convenience for both you and your residents. Just make sure you do your due diligence before you start. It could just be the right move for your rental properties.

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Laurie Mega

Laurie Mega has planned, written, and edited content on a variety of subjects. Her work has been published by, The Economist, Philips Lifeline, and FamilyEducation, among others. She lives in the Greater Boston Area with her husband and two boys.

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