Should you be using rent collection system?
Landlords are letting agencies collect payment in various ways, including cash, cheque, standing orders and Direct Debit. However, over the last few months, we’ve seen an increasing number of landlords and letting agencies of all sizes make the switch to collecting rent by Direct Debit.
If you’re collecting rental payments, now is the perfect time to review your payments process to ensure you’re making the most of your time and money and that you are catering for your tenants’ needs. Direct Debit can help you in three ways:
- Reducing late payments
- Increasing rent easily
- Reducing admin
1. Direct Debit helps you to reduce late payments
According to the Money Advice Trust, the number of tenants falling behind with rent payments has more than doubled over the past six years. In December 2012, a total of 326m of rent was either late or unpaid, according to LSL Property Services’ buy-to-let index, up from 241m in November.
As a result, more and more landlords and letting agents are turning to Direct Debit to take control of when they’re paid. With Direct Debit, once you have authorization from your tenant, you can collect rent payments whenever they’re due without your tenant needing to do anything else. This means you don’t need to worry about chasing payments or threatening eviction and tenants don’t need to worry about remembering to send you cash or a cheque or setting up a standing order.
And also with the RentGuard system, RentGuard rental solution provides a hassle free on rental collection with credit card and debit card to deduct the tenants rent money and deposit it to landlord bank account. Receipts and invoices are automatically sent via email and our support teams are here to assist you step by step.
2. Direct Debit lets you increase rent when you need to
As a landlord or letting agency you may, from time to time, need to increase the rent or charge additional fees. If you take payment by standing order, this can be difficult as you’ll need to cancel existing standing orders and ask your tenant to set up a new one.
With Direct Debit, however, your tenant won’t need to do anything: you have full control over how much you take from them, and when.
3. Direct Debit reduces your admin
Taking payments by cheque, cash and standing order can be a huge administrative burden. You need to cash cheques, check your bank every day to see what has cleared and chase any non-payers.
In contrast, Direct Debit payments can be completely automated. Rental payments can be set up and then forgotten about as they’ll be taken automatically each month and you’ll always know exactly what has and hasn’t been paid without checking your bank statement. What’s more, you’ll know as soon as a tenant has cancelled their Direct Debit so you can contact them straight away.
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