Setting up a bank account is one of the first steps in real estate investing. There are many options, but banks that work for personal…
Never chase down checks or late rent payments again. Accept rent by ACH or card. Automated payments, fees & reminders.
Save hours each month. No more chasing down tenants for cash or checks, and no more manual tracking with Venmo or Zelle.
Get paid on time and apply late fees without lifting a finger. We send automated payment reminders to your tenants so you don’t have to.
Payments are deposited directly into your bank account in as fast as 2 days. Receive automated alerts once rent is paid.
Modern platform for tenants to pay rent on any device. Tenants can pay by ACH bank transfer or debit/credit card, and can easily enroll in auto-pay.
Simple to set up for landlords and tenants. Getting started takes less than 5 minutes. Our live support team is always here to help.
Easy for you, easy for your tenant
Provide your unit address, rent amount, tenant information, and timing of payments.
It takes less than 5 minutes for tenants to set up rent payments on their mobile phone or desktop. Our live support team is always here to help.
Payments are deposited directly into your bank account within 2-3 days. Easily view payment history and outstanding rent.
ACH, Debit, Credit (2.99% fee)
Manual payment via cash/check; Some platforms only allow credit card with 3% fee
Venmo & Zelle limited at $2,000/day
“I love collecting rent on Baselane. I previously used Zelle, but couldn’t collect rent directly into business accounts. I’ve solved this problem with Baselane!”
“Setting up the rent collection on Baselane was so smooth! I’m a first time landlord and didn’t know where to start but I found Baselane and the rest is history!”
“I love the automation of Baselane’s rent collection offering. It’s so easy to use and saves me the hassle of chasing after tenants each month for rent payments!”
This guide will cover the ins and outs of online rent collection, including payment methods, late fees, rent increases, accounting, and more.
Buying rental properties has become one of the most common ways to earn passive income. However, getting tenants to pay rent isn’t always easy. Cash and checks can get the job done, but 81% of tenants prefer to pay rent online. In this guide, we’ll break down the essentials of collecting rent online to ensure you get paid on time.
Whether it’s a career choice or a side hustle, becoming a landlord requires a bit of upfront knowledge to make the most of your real estate investment. We’ve outlined the basics of being a landlord to help get you started.
A landlord is someone who owns residential or commercial property that is rented to tenants in return for payment. Landlords can be individuals, companies, or other entities like government agencies. Specific rights and obligations of each party are outlined in a lease agreement and state landlord-tenant laws.
A rental property is any type of real estate that is leased or rented to tenants. Rental properties can be residential, commercial, or a combination of both (referred to as “mixed-use”).
These properties can be short-term or long-term rentals. Short-term rentals are typically rented on a daily, weekly, or monthly basis. Long-term rentals are usually leased for 12 months. Although, most commercial properties are rented for 3-5 years.
To become a landlord, you first need to find an investment property that tenants can rent out. You can either do this yourself or hire a real estate agent to manage the property search and negotiations.
Steps to become a landlord:
You will also need to be familiar with local landlord-tenant laws. These cover regulations for tenant screening, security deposits, entry notices, and evictions.
A property manager is a person or company that handles the rental process on behalf of a property owner. They can assist with tasks such as tenant background checks, rent collection, rental listings, maintenance requests, and repairs.
Property managers also typically keep records and handle capital improvements for owners. Additionally, they are responsible for legal compliance matters like lease agreements and evictions.
Before you become a real estate mogul, you should start with the basics. Knowing how to find a rental property, get a loan, and estimate potential profits are all essential aspects of real estate investing.
Steps for buying a rental property:
While you’re free to buy property anywhere in the U.S., it’s worth looking into landlord-friendly states. These areas generally prohibit rent control and favor landlords over tenants for lease terminations and evictions.
In its most basic form, a lease agreement should clearly state who is involved, what property is being rented, how long the lease term is for, and what the rental payment policy is. The more details you include, the easier it will be to enforce rules and penalties.
When it comes to rent, lease agreements should include:
There are a few ways to go about creating a lease agreement: draft it yourself, pay a lawyer, or find a lease template online. Regardless of which option you choose, it doesn’t hurt to have a lawyer look over the lease to make sure it protects your rights and complies with local landlord-tenant laws.
Rent prices depend on multiple factors like the location of your property, its size and amenities, occupancy rates in the area, and the type of tenant. Some real estate investors use the 1% rule to get a ballpark figure. This is a quick way to estimate rent, but it overlooks a lot of important variables that impact returns.
How to determine rent prices:
Generally speaking, the amount you charge for rent should cover your monthly expenses (property taxes, insurance payments, mortgage payments) with a bit left over. Make sure you consider extra fees for things like parking, pets, and utilities.
There are multiple rental listing sites that help get your property in front of a large pool of prospective tenants. Zillow Rental Manager reaches nearly 30 million monthly visitors. Other top options include Realtor.com and RedFin. While your property listing will undoubtedly get inquiries, there are a few ways to make sure you’re attracting quality tenants.
How to create an effective rental listing:
The best time to list your rental is 60 days before a tenant moves out. Discussing renewals 90 days before the lease ends will give you time to plan ahead and avoid paying for vacant units, which can cost up to $1,750 per month.
Including tenant policies in your rental listing will help generate quality leads from the start. The rental application process should cover the basics to verify contact information, employment status, and landlord references. You can also request authorization for a background and credit check.
Five attributes of a quality tenant:
Once you screen tenants and review the reports to see how they handled previous rentals, you can decide if you want to move forward.
Property management companies are a great option for rent collection if you have multiple rentals and enough cash flow to cover the expense. The margins might not make sense for smaller portfolios, and some companies don’t accept credit cards, which is a popular rent payment method.
Property management software offers online rent collection and flexible payment options without the premium price tag. Some tools can also handle other aspects of the rental process. With Baselane, you can automate rent collection, expense tracking, tax reporting, and landlord banking.
Whether you manage a small portfolio or hundreds of properties, landlord online payment systems offer multiple options and benefits for streamlining your rent collection process.
Collecting rent online eliminates the need to chase tenants for late payments or wait for rent checks to clear. Even if you own a single property, online rent payments can save hours every month that you can spend on growing your rental business.
Online rent payment systems are more secure than collecting rent in cash or checks, which can easily get lost or stolen. Online transactions and account information is encrypted to protect sensitive data from getting into the wrong hands.
Automatic rent collection gets rent payments on time and into your account within a few business days. The best rental apps for landlords also let you collect security deposits and automate late fees.
Online rent payment tools are generally safe so long as you are dealing with a reputable provider. Payments should be processed through an encrypted system and use strong identity verification protocols like multi-factor authentication to keep accounts secure. Look for services that offer fraud protection and other safety measures like regular penetration testing.
There are multiple apps and platforms to collect rent online. Each method has pros and cons, depending on what you need and how many rental properties you own.
EFT, eCheck, and ACH transfers are convenient pre-authorized electronic payment methods using tenant bank accounts that typically take 2-3 business days to process.
Zelle accepts bank transfers but doesn’t support credit or debit cards and limits transactions to $1,000 per day and $5,000 per month. Zelle also doesn’t support automatic late fees or bookkeeping.
Cash App supports all tenant online payments, but it’s not designed for rent collection. It has low transfer limits and landlords must pay a fee of 1.5% to deposit funds. Cash App also has no auto-late fees or bookkeeping functions.
PayPal is a P2P payment platform that can process bank transfers and credit card payments, but it’s not intended to be used for rent collection. You can’t generate rent invoices, auto-charge late fees, or automate bookkeeping. PayPal also charges 3.49% + 49 cents per transaction.
Venmo is a digital wallet that accepts online rent payments but is not recommended for collecting rent online. While you can ask tenants to Venmo rent payments, it’s not possible to auto-invoice tenants each month or charge auto-late fees. Funds must also be manually transferred to your bank, which will cost 1% per transaction.
Direct deposits work similarly to ACH transfers, but tenants have to provide landlords with their banking information to make automatic monthly withdrawals.
Property management tools collect and deposit tenant rent payments online via ACH, debit and credit cards, in addition to supporting automatic payments, late fees, and rent reminders.
Enforcing late fees can help encourage tenants to pay rent on time. You can charge a flat rate or a percentage of the rent price so long as it’s outlined in the lease agreement. Some states require limits on how and when you can charge tenants for late rent payments. The average late fee is 5% of rent, and grace periods typically range between 3-5 days.
Using property management software to automatically charge late fees can help optimize this process and save countless hours. Baselane lets you schedule auto-late fees for each property using rules to set the number of days after rent is due to apply the charge.
If you plan to pursue eviction for unpaid rent, make sure to disable rent payments from that tenant. Accepting partial rent payments in some states can delay or stop the eviction process.
Any rent you collect from tenants should be recorded for tax purposes. Using an online rent collection tool with integrated accounting can help you track expenses and rental income all in one place. This will provide you with a complete record of every transaction, who paid, the appropriate Schedule E tax category, and which property it’s for.
Online rent collection offers flexible and transparent payment options to help tenants simplify the entire rental process. However, not all options are free and secure. It’s important to look for trusted solutions that don’t charge tenants to pay rent and deposit funds into your account as fast as possible.
Tenants can pay rent online using a debit card, credit card, or ACH bank transfer. Most tenants choose to pay rent via bank transfers, but some prefer to use a credit card to maximize their rewards.
Transaction fees vary among rent collection tools. Tenants can pay $1-3 per ACH transaction on some platforms and up to 3.5% for each debit or credit card transaction. Baselane offers free bank transfers (ACH) and only charges 2.99% to pay rent using a debit or credit card.
Most landlords collecting rent online offer ACH transfers on the tenant payment portal. Look for payment platforms that don’t charge fees to tenants paying rent via ACH.
Tenants can use a credit or debit card to pay rent online with certain platforms. Transaction fees for these methods typically range between 2.9-3.5%.
Paper checks are a common way for tenants to pay rent. Landlords will need to make a trip to the bank and wait 3-5 days for the check to clear. With Baselane banking, rent payment checks can be deposited using a mobile phone.
Online rent collection tools usually offer mobile rent payment options for tenants to use their smartphone or mobile device to pay rent via ACH transfer, credit card, or debit card.
Choosing a property management platform with flexible online payments will make it easier for tenants to pay rent and switch between payment methods depending on their monthly expenses. Auto-pay is a popular feature for tenants who prefer to schedule recurring payments for all their bills.
One of the best ways to ensure you get paid on time is by using an online rent collection service that offers auto-pay. This feature lets tenants set up automatic payments for the same day every month. Tenants using auto-pay can avoid late fees and boost their credit scores with on-time payments.
Sending rent reminders is another way to help tenants stay on track. Baselane’s rent collection platform allows you to schedule automatic reminders for late and upcoming rent payments. You will also receive real-time notifications when payments are received or overdue.
Typically, a landlord is required to give tenants a written notice about rent increases 30 days before the lease expires or renews. Depending on local laws, you may be able to raise rent prices during the lease term if it’s in the signed agreement. States with rent control laws will limit rent increases between 3-5%.
Online rent collection starts with adding rent payment options and charges for monthly rent, recurring fees, prorated rent, late fees, security deposits, and one-time fees. Then you need to connect a bank account to receive payments. Baselane offers free landlord bank accounts for each property to make it easier to track incoming and overdue rent payments.
Tips to make online rent collection easier:
After everything is set up, invite your tenants to create an account. This only takes a few minutes to connect a bank account or credit card. Tenants can sign in to send rent payments every month or select auto-pay to schedule automatic withdrawals.
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Setting up Rent Collection is easy. First, you must have added a property. Please see here for details on adding a property if you haven’t done this already.
Once you’ve added your property, it will appear automatically on the Rent Collection page. You will be able to set up rent collection for every unit of a property. Open the expanded view of each property and select ‘Set up Rent Collection’ for a unit within that property. There are four simple steps to setting up a rent collection:
The final step will be to review & confirm the details. Once confirmed, we will automatically generate the rent collection invoices for the duration defined in the lease terms. We will also send an invite to your tenant to join the Baselane Tenant Platform. Your tenant will be able to view their upcoming invoices and pay rent directly on the Baselane Tenant Platform via bank transfer, debit card, or credit card.
Watch our quick How to Start Collecting Rent for more detailed information.
Our tenant portal makes paying rent and managing rent collection a breeze. After creating an account, tenants will be able to seamlessly pay rent by connecting a bank or credit card account, and optionally enrolling in auto-pay. In addition, Baselane makes it possible to easily view and manage past payments, Rent Collection details, deposits, and landlord contact information. Our tenant portal is fully accessible by mobile or desktop.
To learn more about our Renters portal, watch our quick video on Baselane Renter Portal Overview.
As a renter, there are no fees to pay rent from a linked bank account (via ACH/bank transfer). If renters choose to pay using a debit or credit card, they will incur a 2.99% convenience fee that will be added to the payment.
Baselane has built strict security and privacy controls to exceed the highest banking industry standards. Your funds are secure and available 24/7 in your Baselane account, and all Baselane accounts are FDIC insured by our sponsor bank, Blue Ridge Bank. In addition, we have multiple layers of security on our website to ensure that no one will be able to access your account or data.
Landlords can record rent payments in Quickbooks manually or automatically by connecting a bank account. However, consider using a free bookkeeping option like Baselane tailored-made for rental property finances.
Baselane offers flexible property management software for small to large-scale real estate investors and landlords.