Landlords collect payments in different ways, such as standing orders, cash, checks, or direct debit.
If you are a landlord and find it challenging to collect rental payments, you can use the direct debit system to avoid problems, save time, and achieve your goals. At the same time, this system caters to your tenant’s needs.
Today’s article will discuss the reasons for moving to a direct debit system based on Abdullah Al Ajaji’s insights. Read on!
Table of Contents
Avoids Late Payments
Research shows that tenants usually fail to pay their rent on time. The number of tenants who fall behind with rent payments has doubled in recent years, causing severe problems for landlords to maintain their property rental business and financial stability.
Abdullah Al Ajaji the founder and managing director of Driven Properties says landlords, property managers, and agents look for ways to avoid these issues. A direct debit system is one of the best ways to take control of your finances and streamline the entire process.
For instance, once your tenant authorizes or approves the direct debit, you can collect rents when they are due without asking the tenant. So, this helps you avoid late payments from your tenants.
Similarly, you won’t have to sabotage relationships with your tenants, threaten them with eviction, or chase payments. The purpose is to save time and optimize your rent collection process without hassle.
Prevents Administrative Burden
According to Abdullah Al Ajaji, taking payments via cash, standing order, or check is a massive administrative burden for landlords. For instance, when you collect payments via checks, you must go to the bank to cash them.
Sometimes, the check you receive does not cash because the tenant’s bank account does not have money. On the other hand, direct debit is an automated system, meaning you will collect rental payments on scheduled dates without issues.
You won’t have to worry about anything, even if you forget to collect rental payments. There is no need to remind your tenant about the payment because the system automatically performs the process.
You don’t need to check your bank statement. Moreover, you can contact the tenant immediately if they cancel their direct debit. Thus, you can take appropriate action, avoid the administrative burden, and collect rental payments promptly.
Improves Tenant-Landlord Relationships
A landlord who maintains positive relationships with tenants streamlines the business processes, increases investment returns, and improves their bottom line. Manual cash or rental payments are usually uncomfortable for most tenants.
For example, if your tenant is busy and can’t go to the bank to transfer the money into your account, it will affect your relationship with your tenant. Sometimes, people have no unpleasant situations to deal with, preventing them from paying rent on time.
Therefore, an automated system or strategy is an excellent way to collect rent. A direct debit system benefits landlords and provides convenience to tenants, especially when they are busy or forget about their payments.
Some direct debit services send SMS reminders to the tenants a few days before the due date to let them know their payment is due. Therefore, direct debit payment systems are reliable for landlords and tenants to avoid unpleasant situations and conflicts and maintain positive relationships.
Enhances Cash Flow Management
If you have rented multiple properties, you may need a property manager to handle the daily, weekly, or monthly tasks. Managing numerous rental properties and dealing with tenants of different natures is daunting and time-consuming.
So, if you don’t have enough time, you will find it challenging to track payments. The dispute between you and your tenant can lead to harsh consequences and negatively impact your reputation as a landlord or property business owner.
Likewise, hiring a trustworthy, honest, experienced, and skilled property manager is not easy because it can cost you money. Therefore, a direct debit system is an excellent method to improve cash flow management, reduce the risk of conflicts, and maintain high tenant retention rates.
Moreover, a direct debit system enables you to manage your cash flow online or via an app on your smartphone, giving you complete control over rent collection. You can track payments, analyze information, send reminders, and generate reports, leading to accurate cash flow management.
Conclusion
Landlords who find it challenging to collect rents via cash, checks, or standing orders can use a direct debit system. It ensures everything goes smoothly and gives you peace of mind while maintaining optimistic relationships with your tenants.
