Your property is ready for move in, tenants have been selected and it’s time to sign the contracts. Is your process set up to help you get paid on time?
Military members on active duty have the ability to utilize a limited number of allotments directly through DFAS (the organization that issues paychecks for the DoD). With this system, the set amount of money from the service member’s paycheck is disbursed directly to an assigned bank account at the same time that the service member’s paycheck is direct deposited. The beauty is that the rent is paid on the 1st every month, BEFORE the military member gets paid. The money bypasses the member’s account entirely – avoiding possible negative account issues. Utilizing this option requires that you provide a bank account routing and account number to your clients to set up the allotment.
NOTE: If you collect rent for multiple properties, allotments can be problematic because there is no identifying notation on the deposit that indicates which service member it originated. Therefore, the amount is often the only way to differentiate, which can cause issues if you have more than one property with the same rent!
Many landlords/property managers offer an incentive for doing allotment to ensure they get paid on time every month, such as reduced rent, reduced deposit, etc.
Online Bill Pay
All of the major banks and credit unions now offer some version of online auto payment. In your new tenant intake process, provide instructions for setting it up with some of the banks commonly used by military families – USAA and Navy Federal Credit Union, for example. With most online bill pay systems, the bank will automatically send you a check issued on the indicated date every month. The downsides are that checks can still get lost in the mail and most systems take approximately 4-7 days for the checks to reach you. However, an automated system won’t forget to send the payment!
Website Based Payment System
Today’s consumer is accustomed to paying their bills online – and rent doesn’t have to be an exception. Utilize a system like PayLease to integrate online payments onto your existing website or through the PayLease online portal. If you manage multiple properties for individual owners, look for a system that enables you to easily deposit funds into the owner’s bank account. When you compare options, take a close look at transaction security. If you’re going to ask your tenants to input their financial details online, take the time to ensure the system you’re using is trustworthy.
While online and automatic options are appealing and increasingly becoming a must-have for today’s consumer, there will still be times that having an in-person payment method is essential. Both a secure drop box for checks outside of business hours and a way to process credit cards at your office offer back ups for when online payments aren’t working or are unavailable for some reason. Technology fails sometimes, so be prepared to offer your tenants a back up!
Gearing up for the 2016 PCS season? Don’t forget to update your listings coming available at AHRN.com!
We want to know:
What is your preferred method for collecting rents?