A Phoenix Landlord's Guide to Rent Collection

A Phoenix Landlord's Guide to Rent Collection

There are many things a landlord needs to be aware of when renting out property including liabilities, maintenance, and more. One of the biggest responsibilities of a landlord is to collect the rent each month which is easier said than done. In fact, did you know in 2021, 18% of renters in America were behind on their rent?

How do you make sure rent collection is easy and efficient for both you and your tenant? Continue reading for a guide on the best ways to collect rent. 

Determine Rent

One of the first things you need to do as a landlord is to be clear and specific on how much rent you are collecting each month. There are many ways to determine how much you'd like to receive. 

There is a multitude of online calculators and rent estimators to determine the value of your property. In Arizona, for example, the average rent is just over $1,000 per month. Start by comparing other listings in the area and factor in average maintenance costs each month.

Once you have a clear idea, put it in the lease agreement for the tenant to sign and commit to. Be sure to also include a short grace period a tenant has before you charge them additional late rent fees. 

Rent Collection Methods

Nowadays there are many ways you can collect monthly rent. Figuring out the right method can be tricky because there are pros and cons to each. 

Cash

Collecting cash may seem like the best option because it's fast and immediate, however, there are some cons. When it comes to your bookkeeping, cash is much harder to track throughout the year. It can also be a bit tougher when it comes to your yearly tax return. 

If you decide to accept cash, be sure that you give paper receipts to your tenant to provide proof of payment as well as a copy for your own records. 

Check

Checks are a classic and more traditional way to collect rent. With checks, bookkeeping becomes very easy as you can track these checks much easier than cash. However, checks are an antiquated form of payment. If you're renting to students be mindful that they may not have access to a checkbook.

Checks can also take a few processing days before they get deposited into your bank account. If you decide to ask for checks, be mindful that you may get some pushback from your tenant. 

Online Platforms and Payment Services

Technology has brought on many innovations when it comes to financing. These websites and apps make it easy for a tenant to set up a monthly payment every month without having to worry about it. This not only makes it easy for your tenant but also increases the likelihood that you will get your payment on time each month. 

However, apps like Venmo and Paypal do charge a fee for business transactions. These fees can also increase at any time. As a landlord, you'll want to keep this in mind. Though these apps may be more efficient and easier for your tenant, it can mean less money each month for you. 

Rent Collection

As a landlord, you have many options for rent collection. Trying to find a balance between efficiency what's right for your business can be tough. It's important to research each one and use what fits best for you. 

For more information on rent collection and property management in Phoenix, AZ, visit our blog today!

 

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