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What is the best way to handle rent and deposit payments?

What is the best way to handle rent and deposit payments?


As a tenant or landlord paying and receiving the rent on time is essential. If you’re a tenant it enables you to keep possession of your home. As a DIY landlord the rent pays the mortgage and keeps you in business. But what are the best ways for a tenant to pay and for a landlord to receive not only the rent but also deposit payments too?

 

Paying the deposit

If you’re a tenant paying the deposit is the first tangible step to moving into your new home. Making that payment will remove any nagging doubts you may lose the property. But what's the best way of making sure your deposit reaches the landlord or their agent?

It's advisable to not pay in cash. It's often possible to do so but there are other safer methods. However, if you do make a cash payment make sure you obtain a written and signed receipt from the landlord.

But the safest way to pay your deposit is either by credit or debit card or bank transfer. A debit card won't attract any fees or you could transfer the money using your online banking app. This is by far the safest way of transferring money.

Don't forget that since June 1, 2019 the amount of deposit you can be asked to pay has been capped at the equivalent of five weeks rent. The landlord can't ask for more. 

 

Paying the rent as a tenant

The rent should be the expense you give the highest priority to every month. By far the simplest solution to paying the rent is to set up a standing order. Once the standing order is set up you don't have to do anything else. Apart from making sure there's enough money in your account to cover the payment of course. There are several advantages to using a standing order as opposed to cash or cheque:

·         Convenience. You don’t have to do anything once the payment is set up.

·         Can be set up in a few minutes.

·         A standing order creates a payment trail. It's proof you've paid the rent should any dispute arise.

·         You retain control. A standing order is different to a direct debit in which the payee decides the amount deducted from your account.

 

Collecting deposit and rent payments

As a DIY landlord the health of your business depends on you successfully collecting rent payments from your tenant. In an ideal world your tenant will pay the monthly rent without any prompting from yourself. And the money will drop into your account every month just like clockwork. Unfortunately, that doesn't always happen.

For a whole plethora of reasons collecting the rent isn't always straightforward.  This is why you should always encourage your tenant to set up a standing order. However, you may find it beneficial to accept payment by bank transfer, cash or even cheque. But these are all manual payments. They’re easy for the tenant to overlook.  Which is why a standing order is always preferable.

One way for DIY landlords to ensure they receive rent payments regularly is to enlist the help of MakeUrMove. Our property management services include rent collection. We'll collect your rent for you and should your tenant fall behind we'll manage the arrears. We also provide legal eviction assistance if required.

Using MakeUrMove to collect the rent on your behalf allows you to concentrate on other areas of your business. And you won’t lose out financially as rent protection is also included.

Our collection services also include collecting and protecting your tenant's deposit. Again, we do all the work for you. You can find out more about our property management services here.

Tenants – you can find your ideal property faster with MakeUrMove the online letting platform bringing landlords and tenants together.


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