According to the Consumer Finance Protection Bureau, 19% of U.S. renters reported paying their rent late at least once in 2023. If you’re a landlord, that delay can throw off your budget fast.
Learning how to collect rent from tenants the right way can help avoid stress and missed payments. Today we’re taking a closer look into rent collection strategies that make life easier for Memphis landlords, from payment methods to automation tools.
How to Collect Rent from Tenants: Methods That Work
Memphis landlords often juggle different approaches depending on the tenant, the property, and how hands-on they want to be. There are three common landlord payment methods:
- Traditional methods like cash or checks
- Bank-based options like direct deposit or Zelle
- Online platforms designed for rent payment
Traditional Methods Like Cash or Checks
Some landlords still accept cash or personal checks. This can work if you live near your tenant and can collect in person. But it also brings risks.
Payments can get lost or delayed. There’s no automatic record unless you write receipts. Checks can bounce, which adds stress for everyone involved.
Bank-Based Options Like Direct Deposit or Zelle
Direct deposit through a bank or using peer-to-peer apps like Zelle can feel like a middle ground. Tenants don’t need special apps or accounts, and the transfer is usually quick. But both sides need to track payments manually, and there’s not much protection if something goes wrong.
Online Platforms Designed for Rent Payment
Online platforms made for landlords offer the most control. Tenants can pay on time, set up recurring payments, and even get reminders. You get an automatic record for every payment.
Some of these tools charge fees, but the time saved is often worth it. For larger properties or landlords with multiple units, this option can make monthly rent collection a lot easier.
Automating Rent Collection for Better Efficiency
Automating rent collection can take a lot of the stress out of being a landlord.
This is true for a few reasons:
- It saves time and reduces manual work
- It helps avoid late or missed payments
- It creates a clear record for every transaction
It Saves Time and Reduces Manual Work
Once you set up an automated system, you don’t have to remind tenants each month. Payments can be scheduled, and receipts go out without extra effort from you.
That means fewer phone calls, emails, or trips to check the mailbox. Over time, this adds up to a much smoother routine.
It Helps Avoid Late or Missed Payments
Automated reminders and scheduled payments help tenants stay on track. Many people forget to pay on time when they’re busy.
When their bank or payment app handles it, there’s a better chance the rent comes in on time. It can help prevent conflicts and improve your relationship with tenants.
It Creates a Clear Record for Every Transaction
Online systems make it easy to see when rent was paid and how much was received. If there’s ever a dispute, you have a full history of all payments. That kind of clarity makes it easier to deal with accounting, tax prep, or legal issues if they come up.
Tenant Communication and Enforcement Strategies
Good communication with tenants plays a big part in how smooth rent collection will be. There are three main ways to keep rent on track through communication and follow-up:
- Write clear lease terms from the start
- Send reminders before rent is due
- Enforce late payment rules consistently
Write Clear Lease Terms from the Start
Every lease should spell out when rent is due, how it should be paid, and what happens if a payment is late. Tenants should never feel unsure about the rules.
If everything is explained upfront, there’s less chance of disagreement later. Review the lease together when a tenant moves in, and let them ask questions.
Send Reminders Before Rent Is Due
Even responsible tenants forget things sometimes. A short reminder by text or email can make a big difference.
It’s especially helpful for people who don’t set up auto-pay. It shows that you’re staying involved without being pushy. Some rent payment platforms do this automatically, which makes it even easier.
Enforce Late Payment Rules Consistently
If rent isn’t paid on time, it’s important to respond quickly and fairly. Don’t wait weeks to follow up.
Stick to what the lease says about late fees or grace periods. Being consistent sends a message that you expect rent to be paid on time.
At the same time, always speak with respect. Tenants are more likely to respond well if they don’t feel threatened.
Handling Missed or Partial Payments
Missed or partial rent payments can create stress for both landlords and tenants. It’s never ideal, but how you respond makes a big difference.
If rent doesn’t come in by the due date, reach out right away. A short message by phone, text, or email can remind the tenant and open the door to a quick fix.
Keep your tone polite but direct. Many problems get solved just by checking in early.
Every lease should include what happens if rent is late. This might involve late fees, a grace period, or written warnings.
Don’t change the rules on the fly. If tenants know you’ll follow the lease, they’re more likely to treat it seriously.
Sometimes tenants hit a rough patch. If the person has a good payment history, you can choose to work with them.
A short-term plan, like breaking up the payment over two weeks, might be better than starting the eviction process. Just make sure everything is in writing so both sides are clear.
Tenant Rent Collection Tips
Learning how to collect rent from tenants doesn’t have to be stressful. With clear communication, reliable payment methods, and smart tools, Memphis landlords can keep things simple.
At Reedy & Company, we’ve been serving Memphis since 2002 and now manage more than 3,500 properties for investors near and far. Our deep local knowledge and broad experience allow us to offer trusted guidance and dependable service. We’re proud to help clients make smarter decisions about their real estate investments.
Get in touch today to find out how we can help with your rent collection needs!
