Electronic Rental Payments
Some owner/managers are now using Electronic Funds Transfer (EFT)
programs to automate their rent collections. Renters can choose to
pay their rent electronically using either a bank service or one of the independent services designed to collect electronic
funds. Many electronic rent collection companies are located on the internet.
Be sure the company you use is reputable and legitmate. You may want to look into your local bank to see if they provide ETF services.
What is EFT and how does it work?
EFT is the electronic payment
alternative that is more faster and more convenient than paper checks. When you use EFT, your tenant
authorizes their bank to electronically deposit monthly rent payments
directly into to your company trust or personal bank account. So
instead of a tenant writing a check every month, your financial
institution will automatically draw the payment from the tenants account to
your account on the firstor the month or another rent date.
The Benefits
- Saves time posting or copying checks
- No "lost in the mail" problems.
- Rent is automatically deposited with less errors
- Collect other tenant bills online automatically
- Saves paper and stamps .
- Faster access to your rent funds because there is no bank
float. This improves cash flow since money is in your
account sooner.
- If you are the owner its faster access to pay bills and if you are a manager its faster access to management fees.
- NSF or bounced checks: there is no wait for a check to clear allowing
you to be on top of non sufficient funds problems within days rather than a week or more.
- Federally regulated clearing house.
- Clear and transparent on line account reports.
Opening A ETF Account
Renters can set up an automatic monthly deduction from their checking
account or even a credit card to pay monthly rent. We are all getting
comfortable with electronic bill payment as a quick and easy way to
reduce nuisance chores.
Owner/managers that subscribe to EFT use
the Federal Reserve's Automatic Clearinghouse (FedACH) system.This is the same system used to electronically move company payrolls,
insurance premiums, mortgage payments and other automatic payments.
-
Monthly statements: Ask your bank if they provide this service
-
Software: Is there any special software involved?
-
Training and Installation: Will they
install and train if necesary and are there any set
up costs involved?
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