I have owned rental properties for many years and recently we started using a company that allows us to accept credit cards for rent payments. There are pros and cons to accepting credit cards but our tenants love it and they can pay online with many different sources besides credit cards. It can be quite complicated to set up credit card payments on your own but there are companies that will do this service for you greatly reducing the headaches.
Should you accept credit cards for rent payments?
One of the first things many landlords may ask themselves is should you accept credit cards for rent. There are some ethical concerns with helping tenants get further in debt. Credit cards can get people in trouble and in a bind they may not be able to get out of. However, you have to ask yourself if it is your job to decide how your tenants spend their money and how they pay rent as well.
While some tenants may get themselves in trouble paying with a card some may be responsible enough to handle it. Some tenants may earn points that help them get cash back or travel rewards. Even tenants who can’t use cards responsibly may be in a position to pay rent with a credit card or not pay rent at all. Personally, I don’t think it is the landlord’s job to decide these things. We rent to adults who make their own decisions.
What are the advantages of accepting credit cards for rent?
Many of my tenants like to pay rent in cash or with a money order. They do not like checks which can make our jobs difficult because someone needs to be available to collect the money. Many of those tenants are willing to pay with a credit card or some other online form of payment. It cuts down on the time it takes to collect rent and the risk of having a lot of cash lying around the office if we accept cards.
If tenants do not have the cash or funds to pay rent, they may have room on their credit card which means landlords may have fewer issues with late rent. This could also be an advantage for tenants as well since they can avoid late rent fees.
How can landlords accept credit cards for rent payments?
There are many ways to accept credit cards for payments. I also own a liquor store and mini-mart and we have POS systems to accept credit cards for our customers. I also have some online coaching programs that accept cards through Teachable and I have used Stripe in the past as well. This would be a bit overboard for collecting rent and luckily there are companies that can collect online payments for you and even offer other property management services.
I have been using DoorLoop for a few months and love it. We have set numerous tenants up on auto pay and online payments for rent which they love and makes our lives easier as well. I get notifications when payments are made which is a welcome alert! Many other property management companies will offer this service as well, both local and online. If you are thinking of accepting online payments it may not be as difficult as you think!
Should you use a property manager?
Another thing to consider if you are collecting rent yourself is if it is worth your time. I have a real estate brokerage and people who help me manage the properties and collect rent. There is no way it would be worthwhile for me to do all the tasks involved with property management.
If you are thinking of collecting rent with credit cards you may also consider handing over all of the property management duties as well.