The Ultimate Guide To Landlord & Property Management Payment Processing

The days of collecting rent in envelopes stuffed with cash or waiting for checks to arrive is over – it’s inconvenient,  time-consuming, and risky compared to newer technological forward methods with multi-option payment options, enhanced fraud detection and prevention. For landlords and property managers, secure and efficient payment processing is crucial for smooth operations and financial stability.

As experts in payment processing for housing authorities, PaymentVision will  dive deep into the world of landlord and property management payment processing, exploring its benefits, helping you choose the right service, and setting everything up for success.

Benefits of Online Payment Processing for Tenants

There’s a reason online payment processing is becoming the go-to solution for rent collection since it benefits  both landlords and tenants:

• Increased On-Time Payments and Reduced Late Fees: Switching to online payment processing can significantly boost on-time rent payments and reduce late fees. Research indicates that online payments can lead to a 20% decrease in late fees. This improvement not only provides landlords with a more reliable and consistent income stream but also alleviates financial stress for tenants, making the payment process smoother and more predictable for everyone involved.
• Convenience for Tenants: Tenants can schedule automatic payments or pay rent on-demand from anywhere, anytime, eliminating the hassle of mailing checks or remembering due dates. Surveys indicate that a significant majority of renters find online rent payments very or somewhat important, highlighting the growing demand for this convenience. This modern approach to rent payments enhances the tenant experience and ensures timely payments.
• Streamlined Recordkeeping and Financial Management: Landlords and property managers can easily track rent payments, generate reports, and reconcile accounts electronically. This saves them valuable time and reduces the risk of errors associated with manual recordkeeping.
• Improved Security: Online payment processing offers greater security than traditional methods. With PCI-compliant services, sensitive financial information like credit card details are encrypted, minimizing the risk of fraud.

Choosing a Payment Processing Service Your Tenants Will Love

With a wide range of options available, selecting the right payment processing service can feel overwhelming. Here are some key features to consider:

• Accepted Payment Methods: Ensure the service accepts your preferred payment methods, which typically include credit card, debit cards, ACH transfers (electronic bank transfers), and even checks – like PaymentVision. And like PaymentVision, they should allow for custom convenience fee schedules to ensure you receive the full rent amount. 
• Integration with Property Management Software: If you use property management software, choose a payment processor that integrates seamlessly for a streamlined workflow.
  *Insight: Although many property management software solutions have assigned payment processing partners, it’s often the case that you can integrate your own with the software allowing for lower fees and better functionality. 
• Transaction Fees and Pricing Structure: Compare processing fees charged for different payment methods and the benefits being offered by the company. Some services offer flat monthly fees, while others charge per transaction. 
• Security Measures and PCI Compliance: Look for a service with robust security measures like encryption and fraud prevention tools. Ensure they are PCI compliant, a certification that verifies they meet industry standards for protecting cardholder data. 
• Customer Support Availability: Having reliable customer support is essential for troubleshooting any issues that may arise. Some payment processing providers have poor to non-existent customer service while others are quick to respond and go above and beyond to ensure business enablement. 

Here are some popular options for landlord and property management payment processing:

• ACH Payments via Your Bank: Many banks offer ACH payment processing for businesses, often at competitive rates. At PaymentVision, we’re accustomed to helping housing management companies process ACH payments in bulk which saves time in the payout process. 
• Third-Party Payment Processors: PaymentVision and other online processing platforms offer online payment processing specifically designed for property management at scale. These processors integrate with your property management software and provide additional features for yourself and tenants.

Making Online Payments Accessible for All Tenants

While online payment processing offers numerous advantages, it’s important to acknowledge that not all tenants may have easy access to traditional banking methods. Here are some ways to ensure your system is inclusive for everyone:

• Offer Cash Payment Options: Consider partnering with third-party payment processors like PaymentVision who enable walk-in payments. These services allow tenants to pay rent in cash at participating convenience stores or retail locations. The service provider then electronically delivers the funds to your account, eliminating the need for you to handle cash directly. 
• Offer Check by Phone: Another great option for tenants is the ability to pay rent via check by phone. This simple but effective process ensures that everyone has access to pay their rent even with limiting circumstances. 

Setting Up Your Payment Processing System

Setting up your payment processing system is usually a straightforward process. Here’s a general outline:

1. Create an Account: Sign up with your chosen payment processor, such as your very own PaymentVision, and complete the registration process.
2. Link Your Bank Account: Connect your business bank account to receive rent payments electronically.
3. Integrate with Property Management Software (Optional): Follow the instructions provided by your payment processor and property management software to establish a connection. Alternatively, we have worked with housing authorities across the country to create a simple custom solution for payments using our many capabilities. 
4. Inform Your Tenants: Clearly communicate to your tenants about the new payment process. Provide detailed instructions on how to make online payments and answer any questions they may have.

Additional Considerations

Here are some additional points to keep in mind:

• Security Best Practices: Always adhere to security best practices when taking payments from tenants. It is not uncommon for housing authorities to be victim to criminal fraud and a trusted payment partner becomes critical to protect your organization from legal cases and lost revenue. 
• Handling Late Fees and Delinquencies: Most online payment processors allow you to configure automatic late fees and manage delinquencies within the system. Setting custom rules and automations within your software can help improve your rent collection rates. 
• Paper Check Acceptance as a Backup: While online payments are preferred, you may still want to accept paper checks as a backup option for tenants who are unable to pay electronically. For any Section 8 housing landlords, accepting both the housing authority’s payments and any gap payment in the form of check or even cash becomes an important process to consider having in place.
  *Insight: PaymentVision has worked with many large section 8 housing authorities to process payments and we find that it’s more important than ever to cater to your demographic’s abilities to pay. 

Improving Rental Collection for Housing Authorities Moving Forward

By embracing online payment processing, housing authorities, landlords and property managers can experience a more efficient, secure, and convenient way to collect rent. From increased on-time payments and streamlined recordkeeping to improved tenant satisfaction, the benefits are undeniable. 

However, it’s crucial to remember that inclusivity is key. Explore options for an omni-channel approach to payments sends clear communication to all your tenants who can participate in this streamlined system. With a thoughtful approach that caters to diverse needs, you can create a win-win situation for both you and your tenants.

If you’d like to start a conversation with us about how you can set up and manage your property management payment processing, please reach out and get a demo of our capabilities.