Rent Collection Guide for Landlords: Problems and Solutions

best ways to collect rent

Not a single soul in the history of ever finds asking others for money comfortable—even when it’s owed.

This is especially true for landlords, who deal with the stress and uncertainty of absent or late rent payments on a monthly basis.

And while technology has eased the burden of communication and completing transactions, today’s landlords are left with a plethora of options for collecting rent. Which is best for your bottom line (and blood pressure)? Read on to learn more.


Keep in mind that states vary in how they regulate rental payment methods. In California, for instance, renters can’t force tenants to pay exclusively in cash or electronic debit. If you request one, you must also let tenants pay via check, cashier’s check, or money order.


How We’re Evaluating Rent Collection Methods

Collecting rent sucks, but it doesn’t have to. These are the four qualities we’re checking against in a rent payment method.

  1. Reliability. Theoretically, tenants pay on time each month, but that’s not always the case. Then, it’s up to you to hunt your tenant down and collect. The risk of non-payment is especially high now; almost half of the US population missed a rent or mortgage payment due to COVID-19’s economic impact. This uncertainty adds stress and extra work for you, like tracking payments on a spreadsheet. A good collection method should be more dependable than this and foster greater payment consistency in your tenants.
  2. Efficiency. The more tenants you have, the more time-consuming rent collection gets, eating up your time—and money. Your time is valuable, and so is your staff’s. Managing payments, tracking missed payments, and keeping up on your financial health—a good payment method should facilitate it all.
  3. Cost-Effective. You need to spend money to receive money—that applies to property management just as much as entrepreneurship. But you don’t want to spend needlessly. Whether it’s for a P.O. box, a subscription to a property management platform, or the gas spent driving to pick up payments in person, it’s best to keep costs down. That’s especially true for landlords who manage numerous properties. Your payment method should be cost-effective for you and your tenants.
  4. Security. Newer payment apps and rental-specific software simplify and expedite payments, but lack the security of a bank. Your collection method should ensure your deposits are protected and insured.
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7 Ways to Accept Rent Payments

These are in no particular order, but we’ll give a spoiler—the last one might just be the best one.

1: ACH Debit

There’s a reason 94% of Americans get paid through direct deposit.

ACH debit, often referred to as direct deposit, was cutting-edge when first introduced in 1972. And for good reason: it allows landlords to log their tenants’ bank account information for effortless recurring transactions.

Downsides: Much like shag carpets and bell bottoms, not all ‘70s inventions hold up to modern scrutiny. While more convenient than checks, ACH still takes a few days to clear. This method is also often costlier than checks or payment apps, and may be difficult to establish with your bank (if it’s even offered). And despite their digital origins, record keeping with ACH is just as difficult as accepting a check.

Verdict: ACH debit is great for landlords with only a few properties, owing to its exceptional simplicity and efficiency. The cost may add up for landlords with many properties, as will time spent in record-keeping and financial management.

2: Checks Through The Mail

Even today, 42 percent of renters pay with checks via snail mail. This method is somewhat beneficial for renters, giving them ample time to collect funds while the check is in transit. It’s also fairly accessible, as most people have bank accounts that provide free checks.

Downsides: The post office is a remarkably accurate and predictable service, but it’s not perfect. It’s not uncommon for mail to get lost on occasion—or significantly delayed. It’s also slow, introduces uncertainty and can create conflict in scenarios where tenants claim to have sent checks that have yet to arrive.

You also run the risk of bounced checks or incomplete rent payments, sent in an effort to delay the full payment. And, checks are outdated for younger tenants who may not even have any, or don’t know how to use them.

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Verdict: If you have a few trustworthy renters and you don’t mind waiting days to receive and process checks, checks may work well enough. Otherwise, it’s simply too risky, inefficient, and inconsistent to recommend. If you go this route, ask tenants for a proof slip.

3: Property Managers

Sometimes it pays to outsource. If you don’t want the hassle of dealing with the conflict and stress involved in managing properties, a property manager can help with tasks, especially if you live far away from your properties.

Downsides: Cost is the largest issue. Regardless of how you compensate property managers, their labor comes at a significant expense. And as tech improves, it’s increasingly able to handle much of the work they do, at a significantly lower cost. Additionally, it’s unlikely that they’ll be as invested in your properties and reputation as you are.

Verdict: Property managers may be ideal for landlords who live far from their investments and don’t mind the extra expense. If cost isn’t a factor and you have someone you trust, the convenience can’t be beat.

4: Dropbox: At Location, Business Office, or P.O. Box

Many property managers opt for secure drop boxes. Tenants simply drop their checks or cash at the nearest box, potentially near the office, or just outside any multifamily property. This method lets tenants continue to use checks or cash, but without the expense of a stamp, or the delay that comes with snail mail.

Downsides: Security. Theft may be an issue if your freestanding container holds thousands of dollars in checks. P.O. boxes are much more secure, but are costlier and more inconvenient for tenants. What’s more, it still requires you to laboriously track payments and keep records.

Verdict: Dropboxes may have outlived their usefulness. They once served a valuable function—back when digital payments were as futuristic as Tron—but they add cost, inefficiencies, and risk.

5: Property Management Software

Need help managing your property? Hundreds of startups provide software designed to facilitate property management. They offer assistance with rent and vacancy tracking, tenant screening, contract and insurance management, and payment management.

Downsides: Cost. These all-in-one solutions don’t come cheap. Most often they’ll offer a monthly subscription that scales in cost with the number of properties you manage. Their laser focus on property management means they’re lacking as an overall financial organization tool.

Verdict: Property management software can automate and simplify numerous time-consuming functions, but may come at a prohibitive cost. Though, free options are available for landlords managing a limited number of properties.

6: PayPal

With more than 361 million active users, PayPal is still one of the most popular payment platforms around. Payments and payment requests can be made in an instant. All transactions are stored and maintained for quick reference and easy record keeping.

Downside: PayPal may give tenants a little too much control, allowing the transmission of partial rent payments. Since the receiver is unable to reject charges, partial rent transactions will go through automatically. This could potentially cost you your right to evict. What’s more, payments still take days to process, and many transactions are subject to high fees. Many people have also reported PayPal freezing their funds. It may not always protect the “buyer” or the “seller” in case of fraud.

Verdict: Paypal may work well in a pinch, but its cost, features, and restrictions make it far from ideal.

7: In Person

Given the extensive alternatives, why go with the oldest payment method known to humankind? If you don’t mind the awkwardness or the time involved, many landlords prefer requesting payments in-person as they believe the social pressure will ensure regular payments. It’s also convenient for renters, who only have to walk to their front door to submit payments.

Downsides: Time-consuming, stressful, and potentially dangerous, in-person collections are not for everyone. Additionally, tenants may not appreciate the extra attention, preferring to avoid the frequent reminder that their home is not exclusively their own. Since you’ll likely use checks or cash for these transactions, you deal with all of those associated problems.

Verdict: In-person collection may be viable for landlords who manage a few local properties to trustworthy tenants. Otherwise, it’s inefficient and potentially grating on the tenant/landlord relationship. Walking around with checks or cash may not be safe, and you’re still subject to the glacial pace of check clearing and the risk of bounced checks.

8: Everyday Money Transfer Apps

Modern peer-to-peer payment apps are all the rage. Instant payments, low-to-no transaction fees, numerous accepted payment methods—it’s no wonder that everyone and your grandma has a Venmo or CashApp.

Downsides: Payment apps process transactions with aplomb but don’t do much else—no property management software features. You don’t have the option to create separate accounts for each property; instead, you’re forced to keep all transactions in one bucket. You might have to keep an Excel sheet in addition to your payment app. Additionally, such apps are known to sell user data to third parties and aren’t FDIC-certified. The app has total control over what happens to your money in case of fraud.

Verdict: Fast and flexible payment apps work in a pinch, but have a few downsides for people using them for business. Bank transfers still take a few business days to process, and they’re not specifically designed to facilitate large payments. And like PayPal, there’s little to stop a tenant from submitting a partial payment.

9: Modern Payment and Automation Apps

At banq, we’ve designed the world’s best payment app for financial organization and payment automation. Unlike today’s payment apps that suck, banq is designed for both professional and personal use. That means it comes with the protections of a bank and the organizational excellence of apps like Evernote. Create an unlimited number of accounts for personal or business use: one for each property and one for operations, for example. Payments can be filtered by account, company, or any other category you choose, and you can download your transactions to Quickbooks. And by hosting both your personal and business finances, you can get an understanding of your financial health in a glance.

Verdict: banq offers property managers all they need to run their business. It allows for a level of customization and personalization unavailable elsewhere. Priced with low transaction fees (which can be passed on to your customer), it is perfect for those looking to automate payments and record-keeping.

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