Rent Payment Platform: Your Key to Hassle-Free Income

Nichole Stohler

Last updated

September 11, 2024

5 min read

You got into real estate investing to make rental income, so determining the most effective way to collect rent should be at the top of your list. When it comes to payment software, you have many choices. While these are usually pretty simple to set up, once you get a rent payment process going, the last thing you want to do is switch payment platforms.

So, how do you choose the best online rent payment platform for your business? This article covers the top options to help you collect rent as efficiently as possible. Explore the benefits of using these systems, find out what features to look for, and check out a list of top options for digital payments.

Benefits of online rent payments

For many years, landlords collected rent in person, via checks in the mail, or through on-site offices and drop boxes. Using electronic rent collection platforms, you can easily collect rent online without the hassle of doing it manually. For both landlords and tenants, this approach offers many benefits, including the following:

Convenience

Online rent payments offer convenience for both tenants and landlords. Tenants can pay rent at any time of day or night, from anywhere with an internet connection. This flexibility eliminates the need to rush to the bank or post office before closing time.

For landlords, the convenience is equally important — no more waiting for checks to arrive in the mail, making trips to the bank to deposit them, or dealing with the hassle of bounced checks. Payment apps help you automate and deposit funds directly into your bank accounts, improving the entire rent collection process.

Improved record-keeping

Online payment systems provide a digital paper trail that's superior to traditional methods. Every transaction gets automatically logged with payment amounts and tenant information. This level of detail makes it much easier for landlords to track payment histories and quickly resolve any disputes.

A rental payment platform gives tenants an easy-to-access record of their payment history, which can be valuable for confirming their status and for future rental applications.

Increased security

Online rent payments provide better security than older methods. Physical checks can be lost in the mail, stolen from mailboxes, or even altered. Cash payments are even riskier, susceptible to theft, and lacking a clear paper trail.

Rent payment software encrypts payments and processes them through secure channels. Many platforms use bank-level security measures to protect sensitive financial information. Also, the lack of physical cash or checks on the premises reduces the risk of theft for landlords who previously might have had large sums on hand after rent day.

Automated reminders

The reminder feature of many online rent payment services can reduce late payments, benefiting both landlords and tenants. You can send reminders via email or text message at predetermined intervals — perhaps a week before rent is due, the day before, and on the due date itself. This helps tenants stay on top of their obligations and reduces the likelihood of them simply forgetting to pay.

For landlords, this means more on-time rent payments. Some advanced online rent collection systems even allow for customizable messages so landlords can add a personal touch to their communications.

Multiple payment options

Many online rent payment platforms allow tenants to choose a preferred payment method, such as a bank transfer, credit card, or debit card. Having options helps tenants who might be low on cash between paychecks stay current on their rent. ACH transfers usually offer the lowest fees, sometimes even free for both landlords and tenants.

Easier for multiple tenants

Online payments make rent collection a lot easier in shared living situations. Each tenant can pay their portion directly to the landlord, so there's no need for one person to chase down payments from everyone else. This helps keep things smooth between roommates and lowers the risk for landlords dealing with partial payments.

Some platforms even offer rent-splitting features, automatically determining each tenant's share based on factors like room size or available amenities.

Better cash flow management

Automated recurring payments can transform a landlord's financial planning. With a more predictable income stream, landlords can do the following:

Forecast their cash flow.
Plan for large expenses like property taxes or major repairs.
Secure more favorable loan terms for buying new property or improving existing assets.

Data and insights

Some online rent payment services connect with accounting software, giving you up-to-the-minute financial data and making bookkeeping a breeze. This lets you see how your rental business is doing at a glance.

This information helps you make smart choices about rental rates, property maintenance, and even expanding your portfolio.

Professionalism

Collecting rent online signals to current and prospective tenants that a landlord runs a modern and efficient operation. This can also help attract and retain tenants who expect digital solutions in all aspects of their lives.

What to look for in rent payment software

It should be simple to collect rent online, right? You might use your local bank account or a payment app like Zelle or Venmo. While those services might get the job done if everything's perfect, they're not ideal for protecting landlords and your property. So yes, it's easy, but the right solution makes all the difference.

What should you look for in a system to automate rent collection? Here are our recommendations:

Flexibility

A versatile rent collection app should offer customizable options to adapt to your business needs, both now and in the future. You may not need all these features today, but having them available helps as your needs change over time. Look for these customizations:

Multiple payment types: Choose a solution that allows you to accept payments via various methods. This should let a tenant pay by ACH transfer, credit, or debit card.
Rent reminders: You should be able to set up rent reminders and customize the frequency, such as sending them 7 days before, 3 days before, and on the due date.
Adjustable fees: Besides monthly rent payments, you'll need a way to charge one-time costs like security deposits or move-in fees. The app should allow for customizable late fees with grace periods, utility bill splitting and collection, and the ability to add charges like pet rent or other recurring monthly fees.
Partial payments: Look at rent collection apps that allow you to deny partial payments to help protect you from the challenges of the eviction process, lease disputes, and payment manipulation attempts.

Low transaction fees

Many online rent payment systems charge fees for their services to tenants, landlords, or both. While it's understandable that there are costs associated with these transactions, you want them to be as low as possible. The best online rent payment solutions offer transparent pricing and minimal fees to keep costs down for everyone involved.

Fees can vary significantly between platforms and even between payment methods on the same platform. For example, users on the r/legaladvice subreddit shared their experiences:

User leenponyd42: "The portal my rental company uses charges $2.65 to use a bank account routing number, so you got lucky on that one! I think it's $15 to pay with a debit/credit card with our portal."
User chococat_: "The portal my landlord uses still charges $2.50 to pay by bank account. Mildly annoying, but I'm not ready to have my lease not renewed over it."

As a landlord, consider how these fees might affect your tenants' ability or willingness to pay rent online. Some tenants may be willing to absorb small fees for the convenience of online payments, while others might find them burdensome. Factor these considerations into your decision when choosing a platform, and be transparent with your tenants about any fees they might incur.

Security

When choosing an online rent collection service, it's wise to focus on platforms with strong security features that protect both you and your tenants. Protecting sensitive financial and personal information is more important than ever. To make the best choice, look for platforms that include the following security features:

Data encryption: This bank-grade encryption protects financial transactions and the storage of personal details.
Multi-factor authentication: Protect everyone with an extra layer of security beyond passwords to reduce the risk of unauthorized access to accounts.
Industry compliance: Verify that the service complies with relevant industry standards, such as PCI DSS (Payment Card Industry Data Security Standard), for handling credit card information.

Accounting features

While your primary focus is on finding a way for tenants to pay online, automating the reporting and accounting of payments can be an additional benefit of these systems. Consider options that provide the following:

Reporting: Choose a solution for rental payments that provides detailed history and records. It should offer customizable financial reports for accounting purposes and make it easy to generate receipts for tenants.
Integrations: Look for software that can integrate with your other management tools. This could include property accounting software or tenant screening services. Integrations can enhance your overall property operations.

Customer support

You don't want to be left hanging if a payment issue arises, so prioritize services with a track record of quick problem resolution. Choose an online rent payment software that provides support capabilities like the following:

Multiple channels: Getting support through many options, such as phone, email, and live chat, allows you to choose the most convenient method for your needs and the urgency of the situation.
Self-service resources: Select a platform that offers an online knowledgebase to quickly resolve common issues on your own, saving time and reducing frustration.
Responsive support team: Research the company's reputation for timely and effective support. Look for reviews or testimonials that specifically mention the quality and speed of customer service.

9 best online rent payment systems

1. Azibo

Azibo is much more than an online rent collection service. It's fully featured property management software that makes managing your rental business much easier. Unlike some competitors that charge for basic services, Azibo offers many of its core features for free, making it an attractive option for landlords looking to minimize operational costs.

The platform's user-friendly interface and mobile app make it accessible for tech-savvy and traditional landlords alike, allowing for easy management on-the-go.

Key features:

Rent collection: You can accept online payments with flexible options, including ACH transfers, credit or debit cards, and even checks. The platform supports automated payments, reminders, and late fee collection, helping to simplify the rent collection process. Azibo also provides real-time payment tracking, allowing you to see who has paid and who hasn’t and block partial payments if necessary.
Accounting software: Azibo allows you to integrate with your existing accounting software or use its free built-in accounting features. This helps automate expense categorization, streamline financial reporting, and simplify tax preparation.
Other capabilities: Other property management software features include online rental applications, comprehensive tenant screening, and state-specific lease generation. Additionally, Azibo offers online maintenance requests and secure document storage.