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The best ways to get your tenants to pay rent on time

Pay Rent Note In Calendar
by Jeff Rohde, posted in Investment Strategy

Collecting rent from a tenant on-time is one of the most important parts of owning a rental property, because without the monthly rental income none of the landlord’s bills get paid. While most tenants probably want to pay the rent by the due date, there are certain things a landlord can do to make it easier for a tenant to pay the rent on time.

Let’s take a look at the different ways a landlord may accept rent, the best ways for a tenant to pay rent, and tips for getting the monthly rent paid on time.

Key takeaways

  • Cash, check, electronic transfer, and online rent payment services are 4 ways for a landlord to accept rent.
  • A landlord may also collect the rent in person, to spend time connecting with a tenant and conduct an informal property inspection.
  • While each method for collecting rent has its pros and cons, using an online rent payment service may be the best way to pay rent for a tenant and landlord.
  • Techniques for getting rent paid on-time include thoroughly screening prospective tenants, explaining to a tenant how and when to pay the rent, consistently charging a late fee if the rent isn’t paid when due, and providing an incentive to a tenant for on-time rent payments.


How do landlords accept rent?

There are a number of ways a landlord can accept a rent payment from a tenant. Some things to consider before deciding how a tenant should pay the rent include how “high tech” a tenant or landlord is, and whether the landlord wants the opportunity to see the property and connect with a tenant.

For example, even though there are advantages to having a tenant use an online rent payment service, a tenant or landlord may prefer to use a more traditional method of paying the rent. Or, a landlord may prefer to collect the rent in person to chat with a tenant, see if there are any issues that need to be tended to, and to informally inspect the rental property.

Cash: Although cash may be the easiest way to pay the rent, it may also put a tenant or landlord at risk of being targeted for theft. In addition, cash rent payments are difficult to prove if there is ever a landlord-tenant dispute, or if a lender wants to verify the rent roll. A landlord who allows a tenant to pay cash may wish to explore locations that accept rent payments in cash, such as PayNearMe or CheckFreePay.

Check: A landlord may also choose to accept rent payments from a tenant via personal check, cashier’s check, certified check, or money order. When accepting a rent payment by check, a landlord should consider issues such as whether a check may be mailed, or whether a tenant must personally deliver a check or use a drop-off box.

Electronic: A tenant with a checking account, debit or credit card also has various options for making an electronic rent payment. Services such as PayPal, Zelle, Venmo, Apple Pay, and Square simplify the process of electronically transferring a rent payment from tenant to landlord. Many electronic payment services charge a transaction fee of around 3%, and funds are normally available within a couple of business days. 

Online: Rent payment services such as Cozy and PayYourRent are another option to offer a tenant. Transaction fees are usually charged to a tenant, and many online rent payment platforms allow a tenant to set up an ACH transfer and opt in to automatic rent payments the day the rent is due. Many online services transfer a rent payment to a landlord within 1-2 business days, making an online rent payment service an attractive option for collecting the rent.


man paying with credit card on phone

Pros and cons of tenant rent payment options

While the options above may all be used to collect rent from a tenant, there are pros and cons to each method that a landlord may wish to consider.

Personally collecting the rent

A landlord who collects the rent in person may provide that personal touch some tenants want, and rent can be collected by cash or check. There’s also the opportunity to connect with a tenant, and conduct an informal property inspection. 

On the downside, a tenant may not be home when expected, which ends up wasting a landlord’s time.

Cash rent payments

Kiosk locations are available at many grocery and department stores where a tenant can make a cash payment and the funds are deposited into a landlord’s account. A tenant without a bank account can pay in cash and receive a receipt proving the rent was paid. 

However, a tenant has to travel with cash to the payment location, which may put the tenant and rent payment at risk.

Check rent payments

There are various options for a tenant paying by check, including a personal check, money order, or cashier’s check, and a tenant can easily mail a check at their convenience. 

However, accepting a check for the rent may give a tenant the excuse to pay late by claiming that the “check is in the mail.” Many banks will also put a hold of 3-5 business days on a check deposit before the funds are available to use, which might result in a landlord paying operating expenses or the mortgage late.

Electronic rent payments

Using a service such as Zelle or PayPal may be a great option for a tenant with a bank account, or a credit or debit card. Many tenants prefer the safety and security of not using cash or a check to pay the rent, making an e-check or electronic transfer a good rent payment option. 

One drawback to allowing a tenant to pay the rent electronically is that a tenant can pay less than the full amount of rent due. In some states, a landlord may be unable to begin an eviction if a tenant pays partial rent.

Online rent payments

Almost everyone today shops online, and paying the monthly rent online isn’t that much different. After a landlord selects an online rent payment platform, a tenant creates an account and links a bank account or card. Many online rent payment services allow a tenant to set up a recurring monthly payment, which helps to eliminate the risk of a tenant paying late. 

Most services will also send a reminder when the rent is due, and a follow-up notice if the rent is late. A landlord may also create an automatic late fee, and prohibit a partial rent payment. While there are numerous potential advantages to online rent payments, the biggest drawback is that a tenant has to have a bank account, debit, or credit card to pay the rent online.

If you’re interested in collecting rent online, check out Stessa. Our rent collection feature makes it easy for tenants to pay on time, and automate key tasks like deposits, receipts, and accounting. It’s a win-win and is free for both landlords and tenants.


Tips for getting tenants to pay rent on time

While there are a number of ways for tenants to pay rent, one of the potential challenges to being a landlord is getting a tenant to consistently pay on time. Some tips of increasing on-time rent payments include:

  • Tenant screening is the first step to getting the rent paid on time. The process of thoroughly screening prospective tenants includes running a credit check and background report, verifying employment and income, and speaking with former landlords to learn whether or not a tenant paid the rent on time.
  • Explain how to pay rent when the rental agreement is signed and again when a move-in inspection is performed with a tenant. Make sure a tenant understands how much rent is due each month, the options for paying, and when a late fee is assessed.
  • Collect a late fee to reinforce that the rent must be paid on time. Consistently charging a late fee sets the right expectations with a tenant, and sends the message that a landlord is serious about getting the rent paid on time. Keep in mind that some local and state landlord-tenant laws may require a landlord to provide a grace period of a few days before assessing a late fee.
  • Incentivize on-time rent payments by offering a small discount if the rent is paid before the due date or for paying on time for several months in a row. Online rent payment services can also help a tenant to boost their credit score by paying the rent on time.


Closing thoughts

It’s always nice for a tenant to have different options for paying the rent. However, accepting the rent by cash or check may mean having to charge and collect more late fees if a tenant forgets or procrastinates. A landlord may wish to discuss with a tenant different methods for paying the rent, along with the pros and cons of each method, and then select the best way for a tenant to pay rent. 


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