Over the past few years, it seems like new payment processing software has popped up nearly every day. From Venmo to Cash App to PayPal to Zelle, there are countless options at your disposal to facilitate rent payments. But you’re not splitting brunch with your friends – you’re a landlord! And you need special features and functionality to ensure your property management business runs smoothly… which means you need a payment processing solution built by landlords for landlords.
The Problems With Collecting Rent Using General Payment Processors
You might be wondering how it’s possible to collect rent wrong. What is there to complain about if the money arrives on time and in full?
But ask yourself: does the tool you’re using actually bolster your business? Let’s walk through the most common complaints that inspired the TurboTenant team to build the ideal Rent Payment dashboard.
Coordination of Payments
Accepting offline payments translates into spending more of your precious time coordinating drop-offs with your tenants, going to the bank, depositing the payment, waiting for it to process, and then having the funds at your disposal.
Let’s say the whole process, from coordination to deposit, takes you an hour per tenant per month. Even if you have just two tenants, you’ll have spent 24 hours waiting around for rent payments over the course of a year. You could’ve watched one whole season of 24 during that time!
And for those of you who are using Venmo, Zelle, PayPal, or any of the other general payment processes, you’re not off the hook either. Because these platforms weren’t designed with landlords in mind, you’ll have to do the heavy lifting by monitoring your payment activity regularly to ensure you receive what you’re owed. Not to mention the fact that many of these payment processors either charge transactional fees, limit payments by day or month, and/or allow tenants to make partial payments willy-nilly.
For example, Venmo charges 1.9% + $0.10 for each payment related to your business. To put this in perspective, the median U.S. rent was $1,827 as of April 2022. If your tenant owes you $1,827 and you accept payments through your Venmo business account, you lose $34.71 for every transaction. Over the course of the year, you’ll have missed out on $416.66.
But the problems don’t end there!
Increased Administrative Work
Paperwork is an inevitability* when managing your own business, but using general payment processors and/or accepting offline payments increases your administrative duties tenfold.
Landlords who use general payment processors or accept offline payments add extra admin work on top of their busy schedules. For each tenant, you’ll have to keep a log of the rent they owe you, then reconcile these logs with actual payments from your tenants. And if a tenant pays late, all the work of chasing down their payment plus charging late fees falls on you.
Though we recognize that nearly every renter wants to pay their monthly bills on time, the reality is that life happens. But when you’re not using a payment processor designed to combat the unique pain points that come with being a landlord, such as needing to track monthly payments and assess late fees in conjunction with your local landlord-tenant laws, you’re making extra work for yourself.
*Proper documentation is a must for successful landlords, but that doesn’t mean the process has to be painful. TurboTenant makes staying organized easy with our document management feature.
No Upside for Your Tenants
Sure, your tenants may think they like being able to pay their rent in cash or via Venmo, but that’s likely because they’re unfamiliar with rent reporting. Rent reporting allows tenants to report verified rent payments to one of the major credit bureaus (Experian, Equifax, and TransUnion) in order to build credit history.
In other words, rent reporting takes your tenant’s largest monthly bill and makes it go much further than simply securing a roof over their head. This process can help them craft a better financial future, and it benefits you, too. When on-time rent payments can lead to a healthy credit history, tenants are going to work that much harder to ensure you get paid on time and in full.
General payment processors like Venmo, Zelle, and PayPal don’t offer rent reporting. There are companies that provide these services, but they’ll charge your tenant a fee and likely need to speak with you in order to complete the process.
A Comprehensive Rent Collection Solution
Are you ready to shed your general payment processor in favor of a comprehensive rent collection solution?
Good, because TurboTenant is proud to introduce our new Payments Dashboard! Waste less time being up to your elbows in paperwork and stress less knowing that our system surfaces all the information savvy landlords need to manage their rental units.
Our dashboard enables you to understand your financials at a glance, putting the power back in your hands – all without charging you a transaction fee. No longer do you have to wait by the mailbox for your tenant to bring over a check, nor do you have to worry about where your money is. We detail every step of the financial journey, including when the payment is in transit to your bank account and when it’s expected to be deposited.
Additionally, we’re rolling out automatic late fee functionality. In just a few clicks, you’ll set your late fee, including when to charge it and for how much, then TurboTenant will take care of the rest. That means you can stop watching your payments like a hawk, safe in the knowledge that we’ll send the charge and notify your tenant on your behalf. But don’t worry – we’ll keep you in the loop so you can take action as needed.
Plus, your tenants can enjoy free rent reporting, meaning they’ll get to build their future while taking care of you in the present. We’ve outlined everything you need to know about understanding your Payments Dashboard so that you can get the lay of the land and stress less about collecting rent.
Take back your time, de-stress your business, and stop collecting rent wrong by signing up for free Rent Payments through TurboTenant today!