Which Rent Collection Method Suits You Best?
Kennedy is an old man who has three rental mabati houses under his name. He doesn’t like the technological know-how that comes with having a mobile phone. He also cannot trust anyone to collect the rent for him. Obviously, collecting the rent in person suits him best. But every case is different depending on different situations one may be in.
Let’s take a look at the different ways landlords can use to collect rent.
- Mobile Money (Paybill)
Paying rent via M-Pesa Paybill is by far the most convenient way to pay and receive rent in Kenya. All the landlord has to do is to acquire the Paybill number from Safaricom and issue it to the tenants. The tenants then pay the money straight from their phones and the owner receives the cash immediately.
Once the tenants pay, they receive a confirmation message stating the amount paid and the time the cash was wired. As the landlord, you can ask them to share the messages with you, and you then generate the receipts for them.
- Online Payment
You can own rental property in a certain country in which you do not reside. In this case, online payments could work best for you. Some household names of online payment brands are PayPal and Worldpay. With PayPal, you only need to give your tenants your email address that is linked to your bank account and they easily wire the money to you. The main downside to this method is if you are not secured, hackers can easily get your important information and steal from your account.
- Collecting in Person
Just like in the above situation, collecting rent in person is suitable when your tenants are not so many and you live near them. This method saves you money in terms of transaction and withdrawal fees.
- Bank Deposits
This is most convenient when the rent is high. It may be risky and costly sending so much money using mobile money or any other method. This is most suitable for commercial buildings. You only need to provide your tenants with your bank account number and they deposit the money in your account, and then they send you the receipts.
- Collect through a Real Estate Management Company
If you have too much on your plate and you don’t have time to follow up with each tenant’s payment, you can source the services of a real estate management company. Such companies collect the rent from tenants and get a commission which is a certain percentage of the rent. They not alone collect rent but also follow up on defaulters.
- Drop-Off in a Specified Location
If you have an office near your rentals, you could simply ask your tenants to make the payment in the office. However, this can only work in situations where the rent is not high. With lots of money, thugs might steal from you or your tenants.