Investing in a Mesa rental property has the potential to generate a lot of positive cash flow for you. But only if you successfully collect the rent each month.
That’s why establishing a consistent process for collecting rent from your tenants is crucial to your success as a landlord. The easier you make it for your tenants to pay their rent, the more likely you are to get paid each month.
There are many ways to collect rent from your tenants. The method you choose will depend on whether you self-manage your rental or enlist the help of Mesa property management.
That’s why we’ve rounded up the most common ways to collect rent from your tenants so you can decide which option is best for you.
The Top 6 Ways to Collect Rent in Mesa, AZ
1. In-Person Payments
If you only have a few properties and don’t mind collecting rent in person each month, this is a good option for you. After all, collecting rent in person means you’ll have money in your hands immediately. It also gives you a great opportunity to avoid making the costly mistake of not inspecting your investment properties.
In addition, if you allow your tenants to pay in cash, you can count the payment each time you collect to prevent any later disputes.
That said, there are some disadvantages to collecting rent in person:
- Your tenant may not be available at the time of pickup, making rent collection tough
- If you own more than one property, going to each of them each month can be time-consuming
- Your tenants may not enjoy monthly property inspections
2. Drop Off Location
If you own multiple single-family homes or an apartment complex, going door-to-door to collect may not work. Instead, you might place a drop box at each rental, so tenants can drop off their rent when it’s convenient for them.
You can outline acceptable forms of payment, such as checks, money orders, or cashier’s checks in the lease agreement. And you can still monitor the condition of your property, even if only from the outside.
Just make sure you check the drop box regularly to avoid disputes over late rent payments. Adding to that, make sure the drop box and your rental property are secure, so it doesn’t become a target for thieves.
3. Accept Rent Via Mail
Sometimes it makes sense to allow your tenants to pay their monthly rent via mail. This is especially true if you self-manage your investment property and live far away from it. The last thing you want to do is collect rent in person or have to check a drop box every month to get paid.
Here are some issues that come with accepting rent payments via mail to consider:
- You need tenants to pay their rent by a specific date each month. The problem is, that mail services can be slow and cause what would have been a prompt payment to be late. This can create a lot of tension between you and your tenant. To prevent this, try giving your tenants pre-addressed and stamped envelopes to make the process easier.
- Lost Mail. Deciding whether your tenant is telling the truth about paying the rent on time or the post office lost it during processing is a headache most landlords want to avoid. Unfortunately, this can be difficult to determine.
- Delayed Payment. It doesn’t matter if the rent check is in the mail, the mailman lost it, or your tenant is behind on paying, one thing is true: you won’t get paid on time. If there are expenses that need to be paid, such as the mortgage, any delay in rent can wreak havoc on your own finances.
Though accepting rent via mail is an option for some landlords in Mesa, AZ, it’s not always the most ideal solution.
4. Direct Deposit
If you want to set up a simple, paperless way of collecting rent from your tenants, direct deposit is a good option. With direct deposit, rent payments are withdrawn from your tenant’s bank account each month. This automated process ensures you get paid and takes some of the stress off your tenant.
The only downside to using direct deposit to collect rent is that if your tenant doesn’t have the funds when the automatic withdrawal processes, you won’t get paid.
That’s why having a local Mesa property management company on your side helps. Your property manager will understand the process that needs to start immediately following a non-payment of rent. This includes initiating the eviction process.
5. Bank Deposit Slips
If you own several Mesa, AZ investment properties, you might want to keep things ultra-organized when it comes to collecting rent each month. As a result, you may have separate bank accounts set up for each property so that the finances never get mixed up.
If this is the case, one way to collect rent from your tenants is to require a deposit slip as proof of payment. All your tenant has to do is go to the bank that you use, make a deposit into the right account, and give you the deposit slip.
This will keep your rent payments in order and give you an easy way to document payments. However, your tenants may not want to frequent the bank every time rent is due.
6. Online Rent Collection Software
One of the best ways to collect rent from your tenants when you self-manage is to use rent collection software. There are many companies offering inexpensive rent collection services that your tenants can use. Just like a direct deposit, only done online, your tenant pays the rent and the money goes straight to you.
This method of rent collection helps keep your finances organized. It also prevents disputes about when rent was paid and is a secure method many people are okay with using.
If you use Mesa property management to handle rent collection for you, there’s a good chance they use an online rent collection service. In fact, the best property management companies have online portals for both property owners and tenants. This way, you can always see when your rent is being paid each month and your tenants have a simple way to pay online at all hours of the day.
Rent Collection Tips
Collecting rent from your tenants is a major part of being a landlord. Whether you self-manage your property or trust a Mesa property management company to collect rent for you, without the rent you don’t make any money.
That’s why you should follow these rent collection best practices:
- Always Enforce the Lease Agreement. It’s easy to give in to tenants going through a hard time and let them pay the rent late. But you’re running a business and if your tenants know they can get away with paying late one time, you can bet they’ll try again. Make sure your lease agreement includes a specific rent due date. Also, let tenants know what the late fee is for overdue rent and the consequences for not paying.
- Thorough Tenant Screening. Part of making sure you get paid rent each month is placing high-quality tenants in your property. Make sure to run a thorough background check on all prospective tenants. Look for things like employment status, income, reliable references, criminal history, and creditworthiness. All these factors play a role in how reliable your tenant will be when it comes to paying rent.
- Enforce a “No Cash” Policy. Though accepting cash for rent is an option, it is often discouraged. Cash is easily lost, makes bookkeeping difficult, and can create landlord/tenant disputes.
Lastly, if rent collection is something you don’t want to deal with, hire a Mesa property management company to help manage your property for you.
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At Stratton Vantage Property Management in Mesa, we collect rent from your tenants, so you get paid on time each month. But more than that, we promise to place high-quality tenants in your rental quickly. This reduces the costs of having a vacant property and the chances of having a non-paying tenant.
It’s our job to make sure you get the most out of your Mesa, AZ investment property. We provide full-service property managers to all our clients, strive to make tenants happy and ready to renew their leases and work to boost your ROI so you can achieve financial freedom.