Handling Cash Rents
Property managers are now increasingly finding that a few renters do not have a bank account or actually, would rather pay their rent without involving the banking system. According to studies, more than 8% of the adult population in the United States is unbanked or does not use or maintain a bank account, and this could be due to many factors, including the economy and undesirability of engaging in banking transactions. Hence, modern property managers have had to implement an effective cash payment option to collecting some rents.
A Basic Reasoning
Property owners can lose many renters if they insist on bank transactions or having a banking account. Around 50% of all ethnic groups and some young people below 34 years do not have a bank account and prefer dealing in cash. Additionally people with low to medium incomes are unable to save enough in the present economic situation and therefore do not find it worthwhile to have an account where they have to pay fees if they do not have a minimum balance. Considering all these aspects it is now vital to have some system, to make it easier for renters to pay cash.
When there is no office on the property, where tenants can come and pay their rents, then accepting money orders or cashier checks from services such as Western Union and MoneyGram, are viable alternatives for the property manager. However, the management will also have to implement an efficient system for depositing these checks and issuing receipts. Tenants will also have to put up with the delay from the time they issue the money order or cashier check, and receiving a receipt.
Another better option would be implementing cash payments at convenience store/s through PayNearMe or similar services. Such a cash transaction is very convenient for the tenant, and he or she immediately receives a receipt for the payment. The property manager on the other hand also receives immediate notification of the rent payment, and the money is directly deposited in the bank account of the property.
A manual receipt of cash by the property manager or staff is not a sterling option, since it can be expensive. First, the property manager or a particular designated member of the staff has to be at hand to accept cash from the tenants. Then there is the work of manually recording the transaction, issuing a receipt and keeping the money safely until it is deposited in the bank account. All this would result in longer office hours, designating one staff member with this task, and having enough security for all the collected cash. This is neither economical nor convenient method for collecting cash rent in property management.
Property management will have to evaluate various methods for receiving rent in cash, based on certain aspects:
Saving of Time: Consider each method based on the time and staff requirements for completing the transaction, and evaluate it my simulating the full process
Convenience: When you have made the system convenient for the tenant, you will have much less instances of late payments and tenants will be a happier lot.
Issue of Receipt: There should be immediate issuance of receipt to the tenant on receiving the money
Security: The process should have minimum risks of fraud or theft of the money