Being a landlord is truly a full-time job. Even at the best of times, the business of renting out your property doesn't start at 9 a.m. and rarely finishes at 5 p.m. – it is a task that can call for you at any time of the day or night.
The property market is one of Australia's leading areas of growth. People will always need places to live, so income is rather secure. Or at least it should be. One of the biggest challenges to landlords and landladies is the issue of payment and how to maximise profitability from tenancy agreements.
For that reason, a more robust payment method than cash or bank transfers is necessary.
Here are three ways automating payments through direct debit will make the landlord-tenant arrangement a more fruitful one.
Avoid late payments
It's important for a landlord to get their payments on time – to avoid a domino effect in their own economy. Tenants are rarely aware of this, thinking their landlord must be well off – surely they won't mind one late payment?
By using a direct debit payment structure, new tenants will use a service that automates rent and removes the friction of late payments. After all, tenants have their own concerns, and it's not impossible that they will forget to take cash out or make the bank transfer that allows a landlord to get paid on time.
Late payments are a slippery slope, and an unscrupulous tenant may test the boundaries of where a landlord's good faith lies – unfortunately, these people are out there.
Working with a direct debit model will instead make sure payment is received at a fixed time and date and at the landlord's discretion, leading to a better relationship and a better business.
Related content: Try our Cash Flow Calculator to see how much you could be saving.
Keeping track of payments is much harder when cash-in-hand is the norm. Even bank transfers can result in a landlord crawling through masses of online banking data if any disputes arise.
Large businesses will have an accounting system in place already. Landlords don't have such luxuries readily available, so a direct debit solution that provides one is a bonus.
Online cash flow management is easy to use and allows a landlord to keep complete control over rent collection.
Good direct debit services offer accessible reports to track payments. Valuable information is stored and can be accessed at any time to keep a landlord on top of their business.
Hopefully, property owners will have a good relationship with their tenants and will be careful not to upset that favourable dynamic. Late or missed payments can certainly affect this; as can a weak payment system like cash or cheques.
Straining the payment process is unnecessary and may make occupants look for accommodation elsewhere. Keep the good tenants by making life easier for both of you.
By using direct debit, landlords save time and energy by not worrying about their receivables, whereas tenants get a smoother, more professional rent payment system, making those trips to the bank a thing of the past.
Related content: Download our Cash Flow Playbook to learn even more ways to improve your business cash flow.