Rent Collection: Choosing the Best Method

Rent Collection

Photo credit: 401K (Flickr)

When it comes to paying rent, there are several options: check, money order, cashier’s check, or cash. Although the most important factor about rents is that it gets paid, you should also know which is the best method to accept rent.

The most important factor in collecting rents is to make sure you are paid on time and there’s an easy way to keep record of it. Here are the various forms of rent payments and the factors to consider when accepting each payment type.

Checks

This is one of the most common ways renters pay their rent. Generally, this is also the recommended method, also. One of the biggest perks to using checks as a form of payment is that there’s a paper trail involved. Every time a check is cashed in, it’s recorded in the tenant’s bank account. If there are any disputes over rent payments, you’ll have evidence in the bank account for payment (or non-payment) of rent.

Money Order

This is a fixed amount of money a renter adds to a payment order. Unlike a check, it has a prepaid value attached to it. In contrast, checks risk bouncing. Renters will be able to obtain money orders in places like grocery stores, liquor stores, or the post office. The downside of using this method is that if it’s lost, the renter may lose that money and have to find another way to pay you.

Cashier’s Check

Renters wanting to use a cashier’s check need to go to the bank to have it made. They can make the cashier’s check written to you. Usually, banks require customers to hold an account at their bank or give cash. Some of the fallbacks of cashier checks is that some banks require notice before withdrawing money or you.

Cash

While it’s okay to take cash for rent, it’s not recommended. If you accept cash as payment, you must be diligent about your record keeping. If there are any disputes over rent payments, you need to have payment records ready to go. This also means you need to issue a receipt for every rent payment for the tenant’s records. Without a paper trail of the tenant’s rent payment either party could get into legal troubles if the rent payments hit a bump.If you’re terrible at record keeping, then this form of payment should be avoided.