How to Collect Rent Payments Online: Best Practices and Solutions for 2024

Missed or delayed rent payments are often the biggest source of stress for landlords. When tenants pay late or don’t pay at all, landlords have to find other ways to make their monthly mortgage payment — if they can’t, they’ll pay late fees or even hurt their credit score.

In this article, we’ll explore the benefits of collecting rent payments online, key features to look for in a rent collection platform, a step-by-step guide to setting up online rent payments with Azibo, best practices, and common challenges. 

Let’s get started.

Why collect rent payments online?

Collecting rent payments online offers a ton of benefits for both landlords and tenants. First off, it’s incredibly convenient to pay rent online. No more running to the bank to deposit checks or waiting for mail delays. Everything is just a few clicks away.

Then, there’s timeliness. Online payments mean tenants can set up automatic payments, which helps ensure rent is paid on time, every time. It takes a lot of the guesswork and worry out of the process.

Security is another big plus. Online payment platforms use advanced security measures to protect both landlords and tenants, so you can rest easy knowing your transactions are safe.

Finally, there’s the benefit of record-keeping. Digital payments automatically generate records of all transactions, making it much easier to keep track of your finances and simplifying things come tax season.

Key features to look for when collecting rent payments online

Now that we see how collecting rent online can save time and reduce stress let’s explore the key features to look for to ensure you choose the best option for your rental property business:

• Multiple payment methods: Look for platforms that offer various payment options, including ACH, bank transfer, credit, and debit card payments. This flexibility can accommodate different tenant preferences and ensure smoother transactions.
• Automated payments and reminders: Automation is important for timely rent collection. Platforms with automated payment options and reminders help tenants remember due dates and reduce the likelihood of missed payments.
• Recurring payments: Allowing tenants to set up automatic and regular payments for their rent can reduce the risk of late fees and provide landlords with a reliable and predictable payment schedule.
• Ability to charge late fees: Choose a platform that allows you to charge late fees automatically when payments are overdue. This feature helps enforce your rental agreement terms and encourages timely payments.
• Collaboration with accountants: Look for a platform that allows your accountant to access financial information for tax reporting. This feature facilitates collaboration and ensures that your financial records are accurate and ready for tax season.
• Transaction fees: Be aware of the costs associated with each platform. Some may charge transaction fees or monthly subscription fees. Understanding these costs will help you choose a cost-effective solution.
• Security measures: Ensure the platform has robust security features to protect both your and your tenants’ financial information. Look for encryption, secure payment gateways, and compliance with financial regulations.
• User experience: A user-friendly interface is essential for both landlords and tenants. The easier the platform is to use, the more likely it is that tenants will comply with online payments without issues.

Step-by-step guide to collecting rent payments online

Azibo stands out as a comprehensive solution for paying rent and collecting rent payments online. It supports multiple payment methods, including ACH, credit, and debit card payments, all available at no cost to landlords (renters are charged a 2.99% convenience fee for credit/debit payments), making it a highly cost-effective option.

The platform features automated payment reminders and the ability to charge customizable late fees, ensuring that rent is collected on time. With advanced security measures, Azibo protects all financial transactions, while its user-friendly interface makes it easy for both landlords and tenants to navigate.

Additionally, Azibo provides robust accounting features tailored to real estate needs, such as generating Schedule E reports, tracking expenses and income, and allowing accountants to access financial information for seamless tax reporting.

Setting up your Azibo account step-by-step

Setting up your Azibo account is very simple and takes only a few minutes:

1. Sign up

• Click "Get Started" on the rent collection page, or through this direct link
• Select "I'm a property owner" and enter your name, phone number, email, and password. Click "Get Started, it's free".
• Enter the verification code sent to your phone.
• Input the total number of units you own.

2. Choose rent collection

• There are three options for workflows here, we are going to focus on "Collect Rent". Click on "Start Rent Collection".

4. Add a property

• Add property details including address, number of units, and assign it to a portfolio if needed.

5. Set up payment terms

• You will be asked you if you would like to create a lease with Azibo- go ahead and follow the flow if this is something you would like to do, but for now, let's remain focused on the rent collection aspect.  Click ‘skip lease set up.’
• Select tenancy type (month-to-month or fixed term), start and end dates, rent due date, and monthly amount.
• Toggle options like partial payments, late fees, and renter’s insurance, if applicable.

6. Enter renter information

• Input renter’s name, email, and phone number. Optionally, add co-signer information. (Please note that at this time, only one renter can pay rent for a property on the Azibo platform)
• We have included a copy of the invitation that is sent to your renters so you are aware of the information they are sent.

7. Review and confirm

• Ensure all information is correct. Edit if necessary.
• Click "Confirm and Invite".

8. Link bank account

Next, you will be prompted to add a bank account.

• Select your business type (sole proprietorship or LLC/corporation).
• Enter personal information and click "Continue".
• Click "Securely Connect" to link your bank account for rent payments.
• Verify your account by submitting ID verification after linking a bank account. Follow the Stripe ID verification process with a government-issued ID and a selfie. This step ensures security and may take up to 2 business days.

9. Start collecting rent

• Once your account is verified and your bank account is linked, you can start collecting rent online.
• Monitor payments through the Azibo dashboard and manage all transactions and communications with tenants.

If at any point you are stuck setting up your Azibo account or have questions, please feel free to reach out to our customer service team at support@azibo.com

7 Best practices to collect rent from tenants online

As we have seen, finding the best way to collect rent online can streamline the process for both landlords and tenants, making it more efficient and convenient. Here are some best practices:

Choose the right platform

Select a reliable online rent collection service that suits your needs. Platforms like Azibo offer various features, including the ability to handle multiple payment methods.

Educate your tenants

Make sure your tenants understand how to use the online payment system. Provide clear instructions and support for setting up their account and making payments.

Set clear payment policies

Clearly communicate the terms of payment, including due dates, grace periods, late fees, and the acceptable forms of payment. This helps prevent confusion and ensures tenants know exactly what is expected.

Offer multiple payment options

Providing multiple payment options, including the ability to pay online, can make it easier for tenants to pay on time. Options might include bank transfers, credit card payments, and checks.

Automate payment reminders

Use your chosen platform’s features to set up automatic reminders that notify tenants of upcoming and missed payments. This can help reduce late payments.

Maintain security standards

Ensure that the platform complies with security standards to protect sensitive financial information. Look for features like encryption and secure data storage.

Keep detailed records

Online platforms typically offer tools to help you keep detailed records of all transactions. Make use of these features to maintain accurate financial records, which can be helpful for accounting purposes and resolving any disputes.

1. Enable auto-pay: Encourage tenants to set up auto-pay, which can minimize late payments and reduce the hassle of monthly reminders.
2. Stay compliant: Ensure that your rent collection practices comply with local laws and regulations regarding online transactions and tenant rights.
3. Evaluate and adapt: Periodically review the effectiveness of your online rent collection system. Be open to making changes based on tenant feedback and new technological advancements.

Implementing these best practices can help make the rent collection process more efficient and less stressful for both landlords and tenants.

Common challenges and how to overcome them

Even with the benefits of online rent collection, landlords can face several common challenges. Fortunately, Azibo provides effective solutions.

Technical issues 

Technical issues can arise when setting up and using online rent collection systems. Common problems include connectivity issues, account setup difficulties, and transaction errors. Azibo provides robust customer support to help resolve these issues quickly, ensuring a smooth user experience.

Tenant resistance 

Tenants may resist switching to online payments due to unfamiliarity or concerns about security. To address this, provide clear instructions and emphasize the benefits, such as convenience and security. Azibo makes the transition easier by offering a user-friendly interface and comprehensive support for tenants.

Managing multiple properties 

Managing multiple properties can be challenging, especially when tracking payments and maintaining organization. Azibo simplifies this process by allowing landlords to link different bank accounts to specific properties, for free, providing a clear and organized financial structure.

This feature ensures that all rent payments are directed to the correct accounts and simplifies financial management for landlords.

Collect rent online free with Azibo

Collecting rent payments online offers numerous benefits, including convenience, timeliness, enhanced security, and streamlined record-keeping. Following best practices like clear communication, setting up policies, ensuring security, and effective tracking and reporting can make the process seamless.

Choose a platform that supports multiple payment methods, offers robust security, and provides user-friendly interfaces. Azibo is an excellent option, providing all these features at no cost to landlords.

Explore Azibo’s services today to start collecting rent online for free and simplify your rental property management.

Sign up now