Property Management

Collecting Rent Safely: The Dos and Don'ts of Online Rent Payments

Written By Melanie Kershaw

Last Updated Sep 26, 2023

A young adult male sits at his laptop on the couch, while his female partner shows him a credit card, paying rent for their rental home securely online.

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There are countless ways you can accept rental payments these days — but not without risk. So what is the best form of payment for rent? 

The safest way to collect rent is using a secure online payment system. Accepting rental payments by check or cash is the highest risk. It’s hard to track and less secure than systems that use encryption and comply with data protection laws

Of course, not all online payment systems are equal either. In this guide, we’ll cover the dos and don’t of online rent collection to protect you and your residents. 

What is the most secure way to collect rent online from tenants?

Without question, the most secure way to collect rent online is to use a payment solution that has been purpose-built for rent collection. These platforms track payments specific to your rental home, keeping a succinct ledger of funds paid without risk of payments going astray. 

This isn’t the case for popular peer-to-peer online payment apps like PayPal, Venmo, Zelle, and Cash App. While simple and user-friendly, they aren’t designed for landlords or rent collection. This leaves homeowners open to disputes and rent payment fraud

If you use the Belong app to collect rent, you’ll get a secure payment system made for homeowners. But you won't need to use it to chase unpaid rent, because the Belong team handles it all for you and even provides guaranteed rent. That means rental income is paid on time, every time, regardless of when your residents pay. If they miss a payment, Belong will keep your cash flow running smoothly while we do the legwork of getting residents back on track.

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Is it safe to use PayPal, Venmo or Zelle to accept rent payments?

Yes and no. On the one hand, these apps do make secure payments easy and avoid the need for you to give out your bank account information. But these apps support personal transactions such as ebay sales or splitting a restaurant bill with your buddies. As a rental payment solution, homeowners should take caution. 

For starters, rent payments are too high to qualify for free transactions. You’ll need a business account as these are not personal payments. Look out for fees and charges you may not have budgeted for in your cash flow analysis.  

Then there is the issue of payment disputes. Your tenants will be able to request a refund at any time, causing the payment to get stuck in limbo while PayPal or Venmo decides who it belongs to. They often side with the ‘buyer’, offering landlords little protection against forced refunds. 

The lack of tracking and transparency can also be a problem for tenancy agreements. With no credit bureau reporting, there is no incentive for residents to pay on time. And if you need to undergo eviction proceedings, receiving partial payment in one of these apps could work against you. In many states, proceedings stop when a payment is accepted, even if it’s less than the amount owed. 

In summary, risks when using a P2P payment platform for rent collection include:

  • Unexpected fees and requirements to maintain a business account
  • The risk of disputed funds and chargebacks
  • The need for manual record keeping and documentation
  • Less flexibility for tenant payment terms
  • No way to charge late fees or report payments to credit bureau 
  • Forces the homeowner to chase up late payments
  • Could slow down or block eviction proceedings, even when rent is owed

How safe is the Belong app for collecting rent?

Very! Belong takes safety and security seriously. All banking information connected to the Belong app is secured and fully encrypted by our payment partner, Plaid. Plaid is certified in internationally-recognized security standards, like ISO 27001, ISO 27701, and is SSAE18 SOC 2 compliant.

Our goal is to provide financial security to homeowners. This is why we guarantee rent and offer flexible payment options for the essentials such as landlords insurance and even repairs. By splitting the cost of expenses over your lease, you can stay cash flow positive on your own terms. 

Belong also gives residents the flexibility to choose payment terms that suit their needs. We even reward them for every on-time payment and offer credit bureau reporting to keep them on track. 

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Collecting rent safely: The dos and don'ts

Regardless of how you choose to collect rent payments from residents, here is a quick look at the ‘dos and don’ts’ to protect yourself as a homeowner. 

What to do when collecting rent online

  • Prioritize the privacy and security of your residents

  • Familiarize yourself with local regulations around data collection

  • Use a secure payment gateway that uses encryption to process payments

  • If you need to accept a check, consider using electronic check processing for more reliable payment

  • Offer the option for tenants to set up automatic payments

  • Be flexible about the frequency of payments to reduce to risk of nonpayment

  • Be very clear with incoming tenants and communicate your payment processes
    clearly in the lease agreement, including due dates, amounts and instructions

  • Keep records of payments including transaction amounts, dates and confirmation receipts — either through a payment app or manually 

What NOT to do when collecting rent online

  • Don’t accept cash payments as they are insecure and hard to track

  • Avoid relying on paper checks as they can bounce or be delayed

  • Avoid sharing your personal information financial information like bank account details

  • Don’t ignore tenant concerns about payment methods or frequency

  • Don’t assume your tenants know how to use your preferred payment method, provide step-by-step instructions if necessary

  • Don’t assume that all P2P payment vendors are free or that they will side with you if a tenant reverses payment

  • Don’t forget about tax time — document all payments, income and expenses 

Get reliable guaranteed rent with Belong

Belong partners with homeowners to offer financial security with guaranteed rent, hassle-free management services, and residents that love your home like its own. For rental ownership without the hard work, BelongPRO is a full service, end-to-end home management solution for rental properties. Learn more about BelongPRO here.

Disclaimer: We prefer to refer to members in our network as homeowners and residents, not landlords and tenants, since we’re on a mission to upend and redefine the traditional landlord-tenant relationship. That said, there’s a big difference between residential ‘homeowners’ and ‘landlords’ when it comes to legal and finance matters, so in some instances we have had to stick to the old term for owners of rental homes. This article is designed to support your research on rent collection and online payment solutions and should not replace advice tailored to your personal financial situation.  

About the author

Melanie Kershaw

Mel Kershaw is a Content Lead at Belong. With an extensive background working with technology companies including Eventbrite and Yelp, she’s always looking for ways to create educational and informative articles that simplifies tech and solves problems for her audience.