We know exactly what this looks like, but let’s set this straight right off the bat: this is not a Venmo hit piece. We love all the trendy digital wallets and mobile payment services just as much as the next millennial. Whether a co-worker owes you for those happy hour drinks last week, or you forgot to split the check with friends at dinner–these apps are fantastic for all the personal payments in your life. But whatever you do, just promise us you won’t use these apps to collect rent payments at your properties. In the long run, they’ll cost you time and money–and you have a better alternative in property management software. Read on for the top 5 reasons why you should never collect rent payments through platforms like Venmo, Zelle, and PayPal.
1. Additional Fees
Since these types of payment apps are designed for personal use, they’ll charge you additional fees for business transactions like collecting rent. These can range from 1.3% to 3.5%+, depending on the platform. You may also be charged for instant payments if you opt out of standard processing times, as well as collecting credit card payments.
2. Transaction Limits
Almost all of these platforms set a limit on the amount of money a user can send and receive in a given time period–the exact amounts varying by app. This poses a specific problem for property managers, especially in large cities where rent prices are inflated, and in cases of luxury properties. Residents may be forced to make multiple payments to meet their full rent; both an inconvenient and risky trade-off.
3. Lack of Automation
Say goodbye to the sweet conveniences of tech automation If you’re set on using Venmo/Zelle/PayPal for your property management. Sending and receiving is truly where the benefits of these applications end. Residents won’t enjoy rent-is-due reminders, credit bureau reporting, or recurring payments, and you won’t get the benefit of automatic late fee calculations–all of which save time and money, and ultimately increase your NOI.
4. Minimal Protection
As the receiving party of rent collection, payment protections are essentially zero. Again, policies differ depending on which platform transactions are made on, but the general trend favors minimal protection. Whether a resident accidentally sends their rent to the wrong person or there is a genuine case of fraud, many of these services are notorious for not getting involved in payment disputes–leaving you and your income vulnerable.
5. Eviction Complications
Of course, we hope it never escalates to this point, but residents can be unpredictable to say the least. On platforms like Venmo, it’s impossible to block payments sent to you. A major concern around this method of rent collection is the risk of receiving partial payments that you can’t refuse. We’re sure you see the problem here if you’re dealing with an eviction, as any amount of payment can complicate the process.
We understand it may be difficult to refuse what appears to be a convenient form of accepting rent payments, but we hope you’ll consider how it may very well cost you in the long run. The most secure, reliable, and beneficial way you can collect rent is through property management software that offers everything these trendy mobile payment services can’t live up to.
No matter your business goals, ManageGo has your back. To discover just how our software solutions can benefit you and your unique property management needs, request a demo today. Or, connect directly with one of our experts and get started on your journey to better property management.
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