Two of the biggest challenges landlords face are collecting and tracking rent payments. PayPal and Baselane are two online rent collection choices for landlords. But which is better, and which should you use? Let’s compare PayPal vs. Baselane for online rent collection.
1. PayPal vs. Baselane Overview
Baselane and PayPal are viable options for online rent collection for landlords. Before we dive deeper into each service, the comparison chart below gives you a snapshot of PayPal vs. Baselane.
|Payment Options||Bank transfer, credit, debit||Bank transfer, credit|
|Deposit Speed||2-3 business days||2-3 business days|
|Fees||Payments via bank transfer (ACH) are 100% free; Payments via credit or debit card are free for landlords; tenants pay a small processing fee (2.99%)||Payments using personal PayPal accounts are free for landlords. Tenants pay a small processing fee for credit card payments (2.9% + 49¢); Payments using PayPal Business accounts cost 3.49% + 49¢ per transaction|
|Assess and Track Late Fees Automatically||Yes||No|
|Auto-pay||Yes||Yes, if you upgrade to a business account|
|Payment Tracking||Yes||Yes, if you upgrade to a business account|
|Landlord Notifications||Yes||Yes, if you upgrade to a business account|
|Tenant Notifications||Yes||Yes, if you upgrade to a business account|
|Secure Payments||256-bit bank-level SSL encryption||256-bit bank-level SSL encryption|
|Cost to receive a $1,000 rent payment||Free||Personal accounts: Free; Business accounts: $35.39|
Note that while business accounts are free to sign up for, PayPal charges a fee of 3.49% + 49¢ for each transaction. There are no fees to use a personal PayPal account, but many features are unavailable.
2. PayPal Overview
PayPal has been around since the early days of the internet when it gained popularity as a way to pay for purchases made on eBay. Since then, it has evolved into a complete online payments platform, allowing individuals and businesses to send and receive payments using a variety of methods.
How it works: Tenants use their PayPal account to transfer money to your PayPal account when the rent is due.
Payment methods: Tenants can pay rent using their PayPal balance, directly transfer funds from their bank account, or with a credit card. If you are using a personal PayPal account, tenants paying by credit card will be charged a processing fee of 2.9% plus 49¢ per transaction.
Tracking: PayPal will send you a notification when you receive money. There is no option to automatically charge fees for late rent payments. If you’re using a personal PayPal account, you’ll have to manually move money from PayPal to your bank account.
3. Baselane Overview
Baselane is a complete financial platform built specifically for landlords to simplify rental property finances. Baselane offers landlord bank accounts, rental property bookkeeping, automated online rent collection and rental property analytics as a single, integrated tool. Rather than using a variety of different software, Baselane helps you save time and money by putting all your finances in one place.
How it works: Collect online payments for rent, security deposits, and other fees. Tenants can set up auto-payments and select flexible payment options. Tenants receive access to the Baselane Renter’s portal to manage their payments. Funds take two days to process.
Payment methods: Tenants can link any banking institution, credit card, or debit card as a payment method. There are no limits for rent payments sent through Baselane. Baselane is linked to a landlord’s bank account to eliminate the chance of money being sent to the wrong person.
Tracking: Baselane keeps a complete payment history for both landlords and tenants. You can set up automatic late payment reminders to help your tenants stay on track. If you use Baselane for your rental property bookkeeping, rent payments are automatically recorded and reconciled for your convenience.
4. Features: PayPal vs. Baselane
Making the choice between PayPal and Baselane for online rent collection comes down to the features each platform offers.
PayPal: Rent Collection Features
- Request money from your tenants
- Recurring invoices (requires upgrading to a business account which charges 3.49% + 49¢ per transaction))
- Tenants can pay using their PayPal balance, debit card, bank transfer, or credit card
- Payments are deposited to your PayPal account
- PayPal balance can be used to make payments or transferred to your bank account
Baselane: Rent Collection Features
- Quick and easy sign-up process, plus it’s free!
- Payments for rent, security deposits, and fees are deposited directly in your bank account within two business days
- Tenants have the option of making one-time payments or setting up auto-pay for recurring payments debited from their bank account
- Tenants can pay rent their way using their debit card, credit card, or direct from their bank account
- Tenants can manage and pay rent from any device, desktop, mobile, or tablet
- Automated reminders and payment confirmations are sent to tenants
- Easily track payment history and any overdue payments
- Receive real-time notifications when payments are made or are past due
- Payments are secure with 256-bit SSL bank-level encryption
Baselane is designed for landlords, offering more features for rental property finances to help track rent collection and manage cash flow all in one place.
5. Collecting Rent: PayPal vs. Baselane
PayPal and Baselane both offer useful features for collecting rent. They both give your tenant flexibility in the way they pay. And, they both help you solve one core problem: getting money from your tenant’s bank account to yours.
The way they do this is vastly different, however. Because PayPal is intended to be a widely used payment solution, it requires a lot of manual work to collect rent. Baselane, on the other hand, is designed specifically for landlords and makes rent collection easier and more automatic.
Collecting Rent with PayPal
- You and your tenant must both register for a PayPal account
- When the rent is due, you send your tenant a money request using your paypal.me link. If you upgrade to a PayPal business account, you can set up a recurring invoice.
- Your tenant enters the amount owed and pays using their PayPal balance, debit card, bank account or credit card
- Money is deposited into your PayPal account
- You can use your PayPal account to make purchases and pay bills, or manually initiate a transfer to their bank account
To collect rent with PayPal, you need to create an account and request money from your tenants. You can do this by sending a personal request or using a business account to generate an invoice.
If you use a personal payment request, PayPal will give you a link to send to your tenant. The tenant will then be responsible for entering the correct amount and submitting the payment on time. There are no fees to use this method as a landlord. If your tenant pays using a credit card, PayPal will charge them a processing fee of 2.90% + 49¢.
You can upgrade to a PayPal business account to create a recurring invoice with payment reminders. However, PayPal will charge you a merchant fee of 3.49% plus 49¢ per transaction regardless of how your tenant pays. On a $1,000 rent payment, you’ll receive $964.61 – effectively costing you $35.39 per month to automate part of your rent collection.
Once you’ve received the rent via PayPal, you can initiate a transfer to your bank account. Standard transfers are free and take a few days. If you need the money sooner, PayPal’s fee for an instant transfer is 1.5%, up to a maximum of $15. Don’t forget to record the transaction in your books.
Collecting Rent With Baselane
- Sign up (It’s free)
- Connect a receiving bank account
- Add rent collection details and invite tenants
- Collect rent
- Track and manage payments
To collect rent online with Baselane, you’ll start by entering the property details and lease terms. You can then choose to collect any one-time payments like fees or deposits.
From there, all that’s left to do is connect your bank account (or open one with Baselane) and invite your tenant. Baselane will automatically send your tenant reminders and give them the option to set up auto-pay. You’ll get a notification when the rent is paid, and funds will arrive in your bank account within 2-3 days.
If you use Baselane for bookkeeping, it will automatically record and reconcile the transaction. You can use Baselane to get real-time analytics about your rental properties, like cash flow, return on equity, and cash-on-cash return.
There is no fee to use any of Baselane’s features as a landlord. If your tenant chooses to pay by credit card, they will have a 2.99% processing fee.
Key Takeaways: PayPal vs. Baselane
- Baselane and PayPal both require you and your tenant to create a free account
- Baselane allows you to collect one-time fees and deposits automatically, whereas PayPal requires manual payments
- Baselane sends tenants automatic reminders every month to pay the rent before it’s due, whereas PayPal only sends automatic invoices if you use a business PayPal account
- Payments received using Baselane are automatically deposited into your bank account within a few business days, whereas PayPal requires users to manually move money out of their account
- Baselane and PayPal both allow tenants to pay using direct withdrawal from their bank account, debit card or credit card
- Baselane automatically assesses and charges late fees, but PayPal doesn’t offer a similar feature
- Baselane gives you automatic notifications when payments are overdue, but PayPal only notifies you when payments are made
- Baselane offers a fully integrated platform for your rental property finances, whereas PayPal can only be used to accept payments
Baselane is easier to use than PayPal for rent collection
PayPal requires you to send a monthly request to your tenant, forces them to pay manually each time, and doesn’t integrate with your rental property bookkeeping software. Baselane puts rent collection on autopilot by gathering the necessary information up front and taking care of the rest – including sending reminders, giving you notifications when the rent is paid, and automatically recording and reconciling each rent payment.
Baselane is more affordable than PayPal for rent collection
Baselane and PayPal can both be used to collect rent payments. But, PayPal charges high fees to access simple features like automatically recurring payments. Baselane doesn’t charge any fees to landlords.
Baselane makes being a landlord simpler; PayPal doesn’t
When you collect rent with PayPal, you have to manually request payment each month, check to make sure you’ve received it, move the money to your bank account, record and reconcile the transaction in your bookkeeping software, and repeat for each property you own. With Baselane, the entire process happens automatically, saving you time and making your life easier.
Rent collection software should make your life as a landlord easier, not harder. Look for software that handles rent-specific use cases like one-time deposits and fees, recurring fees, and late payments. Choose a solution that automates rent collection completely. And use online rent collection software that integrates with your banking and bookkeeping to save you time and manual work.
Collecting rent online makes it easier for your tenant to pay rent, easier for you to collect it, and gives you access to your money faster than depositing a check. Online rent collection also gives you a clearer view of whether all your tenants have paid on time and how your properties are performing financially.
Create a free Baselane account in minutes:
- Sign up using an email, full name, and password
- Follow the instructions in the confirmation email
- Start using Baselane for rent collection and bookkeeping