Automated rent collection is a system that enables property managers to collect rent payments from residents via electronic means such as online portals, direct debit, ACH, direct deposit bank transfers, or debit card/credit card payments.
This simplifies the rent collection process, saves time, and minimizes errors associated with manual processes and payment reminders. It also provides residents with a convenient and secure way to make payments, leading to increased satisfaction and retention rates.
In this article, we’ll talk about some of the best online rent payment systems, the best strategies to automate rent collection, and how to implement these strategies. We’ve got insights from Wolfgang Croskey, a leader in the industry.
Today's Expert: Wolfgang Croskey, Founder & President of How’s My Rental
What is automated rent collection?
Automated rent collection leverages single-family property management software to streamline the process of receiving rent payments from residents. While traditionally, rent collection might involve paper checks or manual online payments, automated rent collection automates these steps, thus alleviating the issue of late rent payments.
Residents can schedule recurring payments or make one-time payments (or partial payments) electronically through the software, allowing the software to automatically debit the designated bank account on the due date, eliminating the need for manual processing and the potential for missed payments or late fees.
Best automated rent collection apps for property managers
1. SecondNature
At Second Nature, our focus is on improving the lives of both residents and property managers. That's why we've designed digital solutions aimed at adding value and alleviating rent collection challenges for all parties involved.
With our Resident Benefits Package, we offer a range of features designed to encourage timely rental payments and assist residents in bolstering their credit, safeguarding their identity, and maintaining financial stability.
2. Buildium
Buildium is a property management platform that provides a range of features, including online rent payments, payment processing, tenant communication, maintenance tracking, and financial reporting.
While Buildium does not publicly disclose specific pricing information, its website indicates pricing is based on the number of units you manage.
3. AppFolio
AppFolio is a cloud-based property management software that offers online rent collection, security deposit, tenant screening, property inspections, and accounting/bookkeeping software features.
AppFolio’s pricing structure is tiered, with the specific cost depending on the number of units you manage and the features you require.
4. Avail
Avail is a cloud-based rent collection tool that allows PMs to automate rent, send rent reminders, track payments, and manage rental properties.
The pricing for Avail depends on the number of units you manage, with increased discounts for larger portfolios.
5. Rentec Direct
Rentec Direct is a software platform for property managers that offers features such as online rent payments, tenant screening, lease tracking, and maintenance management.
Rentex Direct pricing scales with the number of units you manage, with economies of scale for larger portfolios.
Learn more about Rentec Direct
6. Latchel
Latchel is a cloud-based solution designed specifically for single-family home and small portfolio landlords. It offers functionality that automates and centralizes various aspects of single-family property management, including resident support, maintenance management, online rent collection, video-based troubleshooting, and a resident portal.
Specific pricing details are available via a consultative process.
7. DoorLoop
DoorLoop is a cloud-based solution designed to cater to a variety of property types, including single-family homes and multi-tenant buildings. It offers tools to streamline property management tasks, including marketing and leasing units, screening and managing tenants, processing rent payments and managing leases, tracking maintenance requests and coordinating repairs, and generating financial reports for property owners.
Pricing is tiered based on the features you require.
8. YardiBreeze
Yardi Breeze is a cloud-based solution offered by Yardi, a venerable company in the real estate and property management industry. The software offers features designed to streamline tasks typically encountered by landlords or property managers, including marketing and leasing vacant properties, screening and managing residents, processing rent payments and rental applications electronically, tracking maintenance requests and repairs, and generating financial reports for owners and real estate investors.
For quotes, contact Yardi Breeze directly.
9. RentRedi
RentRedi is a mobile-first property management software that allows landlords to collect rent payments online, screen tenants, and manage maintenance requests through a user-friendly app.
RentRedi’s pricing structure is subscription-based and ranges from $12/month (paid annually) to 29.95/month (pay-as-you-go).
Benefits of Automated Online Rent Collection
Rent collection software offers a variety of benefits that are specific to SFR property management companies. After all, the impact of reducing workload and saving time adds up, especially when you need to devote so much of your energy to operations across a dispersed area. Here's a closer look at the advantages:
Reduced workload and time savings
Automating rent collection eliminates the need to chase individual payments, freeing up time for tasks that can be time-consuming, such as inspections or maintenance coordination.
Fewer late payments
With on-time automated payments, rental income (and therefore cash flow) becomes more predictable. This allows for better financial planning and budgeting for property maintenance, repairs, or unexpected expenses.
Simplified accounting and record-keeping
For property managers, autopay eliminates the need for manual rent collection processes and reduces the risk of late notifications or missed payments. Rent collection features also help streamline accounting processes by providing accurate and up-to-date records of rent payments. And of course, recurring payments can be set up to occur automatically, saving property managers time and reducing the need for follow-up with tenants. No more existential dread around rent time!
Reduced risk of errors
Manual processing of checks or cash can be error-prone. Automatic rent collection minimizes the risk of human error in recording payments, ensuring accurate financial records and avoiding potential miscommunications or disputes.
Improved security
Automated rent collection platforms typically use secure payment processing systems to safeguard sensitive financial information. This provides peace of mind for property managers and residents alike, as their payment data is protected from unauthorized access or fraud.
Potential for scalability
Even for smaller companies managing a few properties, automated rent collection lays a foundation for a more efficient system. As your portfolio grows, the automation remains in place, simplifying rent collection regardless of the number of properties you manage. In fact, Wolfgang Croskey says automation can level the playing field.
“Technology is the great equalizer,” he says. “It allows us to compete with these nationwide companies and to provide not only the same level of service but to be able to pivot and adapt much quicker than those larger companies can. So for me, you're a smaller company, AI and Automation Tech is that equalizer that's going to allow you to shine just as well as these larger companies.”
Related: 12 Tasks for Property Management Automation
Enhanced resident communication and satisfaction
For residents, recurring rent payments provide a convenient and hassle-free way to pay rent on time every month. It eliminates the need to remember to make a payment, reducing the risk of late fees and improving their credit score by building a consistent payment history.
Property managers who are reporting rent payments to credit bureaus (such as TransUnion) as part of a Resident Benefits Package can use this as a massive incentive for residents to automate payments. Additionally, tenants can set up recurring payment options using their preferred payment method, making it easy and flexible for them to manage their finances.
The other component of improving the resident experience is offering mobile app-based automatic payment methods. That’s why allowing residents to pay rent with Apple Pay or Google Pay is gaining popularity across the property management industry. Zelle is another payment service that can help with ACH payments without transaction fees. PayPal and Venmo are other mobile payment platforms. With these mobile payment apps, renters can pay their rent using their mobile devices.
It’s a win for residents because they can easily make automatic payments on the go using their smartphones without the need for a physical wallet or a business day visit to a bank or property management office. Additionally, these mobile payment methods are highly secure, as they use biometric authentication to ensure the transaction is authorized by the account owner, minimizing the risk of fraud and identity theft.
A note on credit card payments
It’s important to note that some property management companies have experienced the rare but profoundly irritating (and costly) phenomenon of chargeback claims in relation to rental payments made by credit card. If you’re in the market for software that supports automated rent payments, this is an important issue that you should raise with the sales representative.
Use Second Nature to Automate Rent Collection
At Second Nature, we’ve built digital products around creating ease for residents and property managers – adding value and reducing headaches for everyone involved.
Our Resident Benefits Package provides services that incentivize on-time rent payments and support residents in building credit, protecting their identity, and remaining financially sound.
Rent doesn’t have to be stressful for everyone involved. In fact, using the right tools, rent collection can become as easy as – you guessed it – Second Nature. (We had to.)
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October 10, 2024
