Rent payments

Best Ways To Receive Rental Payments

Deciding how to accept rental payments can be tough. There are multiple options for you to choose from and each option has it’s plus points and it’s minuses. When deciding which form of rental payment to accept you need to decide what features are the most important to you.

In this article I will touch upon the four most common payment methods, their benefits and their negatives. Plus we will discuss failure to pay and the issues with giving tenants control over when and how much rent they pay.

Payment Methods

As discussed earlier, there are a few methods that you will be able to choose from and each offers you different benefits. Let’s start by looking in more detail at each option.


Cash can be an attractive option for landlords due to the nature of it being considered cleared funds immediately. Being able consider funds as cleared is very helpful for landlords as it means it is easy to keep track of what has been paid and what hasn’t.

As soon as someone gives you cash you are able to mark it as paid and even if a tenants falls slightly behind on rent a cash payment can rectify the arrears immediately. Unlike bank transfers or cheques you will know the money is yours as soon as you have it.

The negatives of cash are fairly clear. You will have to arrange times to meet your tenants or attend the property to collect the rent. Which can be laborious and annoying if you don’t have the greatest relationship with your tenants.

Having to collect the funds, also makes it very easy for tenants to dodge you and avoid paying rent should they wish. Another problem that landlords dealing with cash can suffer from is that when you pay the funds into your bank it shows as a cash payment rather than a referenced rent payment. Meaning that you may have issues when completing your tax return; especially if you are collecting multiple properties rents as cash.

This lack of clarity also makes it difficult when going through legal proceedings as it is difficult to prove what the cash payment was for and who you received it from. In my opinion the fact that cash is difficult to trace and annoying to keep records of makes it a fairly undesirable way to collect rent.

The benefit of it being considered cleared funds immediately is great, but I feel that the negatives outway the positives when dealing with business transactions like rental payments.


In my opinion cheques present the most annoying way of collecting rent, due to the fact that they present you with a number of negatives. The main benefit of cheques is how simple they are to collect. There is no need to collect the cheque in person as it can be sent to you in the post or paid into your account similar to cash.

Which means you can avoid the problem of arranging meetings with the tenants to collect rent. They are also safer for you to carry to the bank as cheques don’t come with the associated risk of carrying large sums of cash.

Unfortunately, the negatives as with cash far outweigh any positives. Cheques are not considered cleared funds and it is easy for a tenant to simply give you a bad cheque that then bounces when it is paid into your account.

The fact that cheques can take up to five days to clear means that you are putting a lot of faith into your tenant’s ability to pay rent and it could take you some time to even find out if the cheque has failed to clear.

This makes cheques annoyingly difficult to keep track of as you will have to make sure you double check your account a few days after receiving the cheque to ensure the funds have cleared. Should the funds not clear, you will then have to go through the annoying process of chasing the tenants, getting an explanation and organising a different form of payment.

This potentially laborious process really makes cheques an antiquated and needlessly long winded way of collecting funds. I would rank cheques as the least desirable way to collect rent due to the multiple negatives associated with this method of collecting funds.

Bank Transfer

For me, bank transfers offer the simplest and most efficient way of collecting rent. Transfers can be made at any time of the day or night, generally clear within two to three hours and are completely traceable.

This means you will be able to chase tenants who will have little excuse not to pay as you have made the process so simple for them. It also means that you can set alerts with your bank to confirm when transfers have been made and also set up reminders so that you know exactly when you are expecting transfers.

Another positive is that you can have your tenants use references meaning that you are able to show via bank statements funds hitting your account. It will also be clear whose account the funds came from, so unlike cash you can show that the money came from your tenant’s bank account. This is particularly useful when dealing with tax returns or when having to show history of payments for legal reasons.

The negatives associated are of course the risk you take when divulging your bank details to a third party. This can be negated a little by having one bank account that you use to accept rental payments. You should then transfer the rent into your own savings or business account. This means that there are never any funds sitting in the account and therefore no funds at risk.

Another way to avoid this risk is to have your rent paid to your broker’s or property manager’s account who will then transfer the funds to you. Business accounts are often set up with a higher number of protections and insurances and are checked more regularly meaning that problems are noticed earlier making funds safer.

Having you rent paid to your broker puts the onus on them to keep you updated with payments, etc. meaning that you have little to do in terms of keeping track of your rent.

Online Portal Payments

Some brokers and property managers have internal portal websites that are set up for rent payments. They are easily traceable, fast and no bank details are ever given out. Some tenants will not be keen to deal with systems they don’t know and may prefer to pay you direct. Also a number of these websites will require tenants to input their own card details, something not everyone is comfortable doing.

The negatives of a setup like this are that should the website crash or have problems then your tenants may have a ready-made excuse for failing to pay. Websites can occasionally crash, banks and banking systems tend to be more robust than websites set up for payments so it is rarer for problems to occur with banks.

Failure to Pay

The failure to pay rent is a risk that is present for every option you have when it comes to collecting rent. However each option gives you different benefits when it comes to avoiding rent arrears.

Cash can be considered a good deterrent to rental arrears. Tenants will rarely want to meet face to face and deal with the issue of arrears head on, meaning that tenants paying via cash can feel more connected to their landlords and thus less likely to cause problems.

Cheques give you very little recourse when it comes to arrears. It’s very easy for tenants to pay you a bad cheque or claim that their cheque has been posted to you and lost. Accepting rent via cheque gives you very little control over rent arrears and offers little deterrent to tenants who might willfully fall into arrears.

Bank transfers offer tenants little excuse when it comes to failure to pay and are easy for you to chase tenants on. It is such a simple process that should tenants not pay it will be difficult for them to give you the runaround. Put simply, wire transfers are so quick and easy that your tenants will find it difficult to dodge payment when you are using this method.

Online portal payments like bank transfers offer little excuse for tenants, beyond a website malfunction. Tenants can set reminders, have access to the website and make the payments either by card or without having to be given bank details (which they can get wrong) therefore failure to make payment is again quite tricky to explain for tenants when using this avenue of rent collection.

When dealing with failure to pay rent, it is important that you understand your state’s laws in relation to rent arrears and evictions. Understanding how and when you can commence legal proceedings is important, as is understanding how deep into arrears a tenant may fall before legal action can be taken.

One of the negatives that must be mentioned when dealing with bank transfers or online portals is that you lose control of when rent is deposited into your account. This is important as most states, when dealing with evictions require two full months rent to have gone unpaid. Should a tenant have your bank details or access to an online portal it is easy for them to part-pay their rent thus pushing back your eviction process and nullifying any current proceedings.

This is nearly impossible with cheque or cash payments as you have to accept the cash/cheque and pay the funds in yourself, meaning that you have the ultimate control over when rent is paid. This gives you the ability to reject part payments and means that you are able to avoid tenants forcibly remaining in your property whilst racking up arrears.

My advice to avoid this is to set up alerts on your bank account or online portal to show whenever funds are paid into your account. This gives you the ability to know when funds have been paid and the ability to refuse and return a part payment meaning that your eviction proceedings are unaffected by potentially difficult tenants looking to “play the system”.


In conclusion, no collection method is fool-proof and all methods can give tenants the ability to not make payment or dodge rent. Each method also offers you benefits and negatives and each individual landlord will have their own preferred method.

If you already know how you wish to collect rent then I would suggest sticking with that, should some of the flaws mentioned in this article make you decide to collect rent in a different manner please be conscious that should you change your methods you will be facing a whole new set of potential pitfalls.

Make sure you understand the negatives of each payment method and have plans and procedures in place to negate those negatives and ensure that your rent is paid on time and in full by your tenants. When it comes to rental payments and collecting rent, having a well thought out plan gives you the  ability to avoid any potentially nasty situations and lengthy, costly eviction cases.

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