Almost everything has moved online. We shop, learn, communicate, and are entertained through the internet. The biggest companies in the world are centered around technology and, according to Forbes, 8 of every 10 people are working hybrid or remote jobs. It’s obvious that we are all innovating towards a society that is increasingly online. So, as a landlord, you are probably rightfully wondering about whether your real estate business should also have an online presence. Specifically, you may be questioning the merits of collecting rent online. There are many misconceptions out there about this practice, but there are a few that are particularly concerning:
- Online transactions pose serious security risks
- There’s a higher risk for bounced eChecks and chargebacks
Below we will go through each of these myths and ease any concerns you may have towards online rent collection.
#1: Online transactions pose serious security risks
There are two main concerns about the security of online transactions. Some worry that their personal information is at risk, or that their money is not safe while being handled by these platforms.
When thinking about your personal information, it’s important to remember that there are national and international regulating bodies that ensure all online institutions take the proper steps to protect their consumers from data breaches. There are many examples of how they achieve this goal, like encryption, SSL certificates, regular systems scans, and firewalls. Although of course no transaction is 100% secure (even offline payments carry their own risks), there is no need to stress. Online payments may seem new and unregulated, but there are many people behind the scenes who are in charge of keeping your data safe when conducting online transactions.
Although it’s important to note that transaction fraud is quite rare, there are a few things you can do to keep you and your tenants safe when handling funds through online rent collection platforms.
- Use a trusted website
When choosing which rent collection platform to use, you must do your research. Look through reviews, ask for personal recommendations from other landlords, and dive into each site’s terms and conditions to scan for statements on security. Keep looking until you find a platform that you feel safe trusting with your and your tenants’ hard-earned money.
Keep track of your accounts
One of the advantages of online rent collection is that tenants can set up automated payments. This reduces the likelihood that your renters will forget to pay and end up getting their payment to you late. However, simply “setting and forgetting” about rent payments isn’t recommended. Make sure you are telling your tenants to keep track of how much the rent collection platform is charging them each month and ensuring it’s the correct amount. You should also let them know that if they see anything suspicious, they should immediately report it to you and the rent collection platform.
Encourage tenants to use credit over debit
If you choose to allow credit and debit cards for rent payment, tenants could benefit from using a credit card over debit. When thinking about the possibility of having to recover lost funds, credit makes it much easier to have that money returned to you. Debit cards subtract “real” money directly from your tenant’s account, while credit does not. If your renters are feeling hesitant towards using an online platform, the option to use a credit card could ease some of their worries.
Ensure your connection is secure
Never use public Wi-Fi connections when completing online transactions. These connections are not secure and increase the likelihood of a security breach. If your tenant cannot pay rent anywhere else, suggest they use a VPN (virtual private network). VPNs add a layer of increased security by masking your IP address and any personal information that may be exposed while being online using a public network.
#2: There’s a higher risk for bounced eChecks and chargebacks
The second misconception about online rent collection is that you will frequently experience bounced eChecks or chargebacks. The whole point of shifting to an online rent collection platform is to receive payment from your tenants quicker, easier, and more securely. So, it may be troubling to hear the misconception that there is a higher risk for payment failure. Luckily, that is not true. The risk that someone tries to pay with a bounced eCheck is the same for a paper check, but these electronic payments must clear with the renter’s bank before they’re credited to landlords. Further, chargebacks (charges returned to a card after a tenant disputes the payment), can be disputed if you have records proving the validity of the charge. This is where keeping organized records is extremely important. If you have a signed lease document or invoice, you should be able to fight any claims like these.
Final Thoughts
When considering switching to an online rent collection method, the advantages should speak for themselves. Don’t let myths and misconceptions keep you from innovating and doing what is best for your real estate business.
Since Misconception #1 was quite long, it would be good to have a sentence here orienting the reader that we’re now moving on to #2. [CN1] [CN1]