Whether working through property rental software or a brick and mortar property management office, landlords and property managers offer a range of payment options in order to ensure accessibility for their tenants. 

Options may include check, credit card (in the USA), cash, PayPal and more, but what these popular payment methods all have in common is the fact that they keep the power to decide when and how much to pay firmly in the hands of the tenants.

At SLS, meeting the needs and ensuring the success of property managers, landlords and landladies is our first priority, and the foremost way to do this is to help them facilitate timely and consistent, in-full rental payments from all their tenants. 

To this end, we support and highly recommend Pre-authorized Debit (PAD) or Automatic Clearing House (ACH) as the most effective rent payment method available.

How it works

PAD and ACH are simply different terms for the same payment method. That is: an automatic rent payment system whereby the rental sum is debited (on time and in full) each month from the tenant’s bank account, and then deposited directly into the property manager’s own account. To avoid confusion, we’ll be using only the PAD abbreviation for the remainder of this article.

Facilitated in conjunction with the relevant banks or with a payment processing firm, this automated process is set-up in line with the terms of the rental lease. Rent payment is typically debited from the tenant account on the first day of the month, or in accordance with terms agreed to by both parties in the contract of lease.

To bring the convenience of pre-authorized debit payments to all our North America property management clients, SLS have partnered with a payment processing company that operates in both Canada and the United States.

Why Pre-authorized Debit payments are the best way forward

As a new landlord or rental manager, you may think that tenants will find the idea of automating monthly rent payments invasive or risky, but the fact is that just as people prefer to have their cellphone or utility payments automated for convenience, they generally feel that rental PAD actually makes things a whole lot easier. 

The pace and pressure of life increases by the day, people are busier than they’ve ever been and ensuring timely cash or PayPal payments on their monthly home rental is felt as just another responsibility weighing on people’s shoulders. “What did you say the date was? Oh man, I’ve forgotten to pay my rent again!” Statements like this are all too commonplace.

With pre-authorized debit payment as a rent payment method, tenants and landlords alike can ensure that home rental payments don’t arrive late, or short, or not-at-all. It’s one less responsibility to think about and one less date to remember which is why we, at SLS, have found that whenever we introduce PAD to tenants we get their full support. Even our tenants who’ve had a tendency to delay or make late rental payments in the past have welcomed PAD as a solution to their issues.

From the perspective of the property manager or landlord, it’s a complete no-brainer, there’s just no better way to receive consistent and full property rental payments!

Why you should introduce PAD during your tenant screening process

Occasionally, you’ll encounter prospective tenants who seem unwilling to sign up for the pre-authorized debit method of monthly rent payment. In our book, this occurrence should raise some serious red flags, and that’s why we use an introduction to PAD as part of the tenant screening process.

You have to ask yourself: “Why is this person so unwilling to commit to a fixed amount and date for automatic rental payment each month?” After all, a would-be tenant who’s ready to sign a new lease binding them to a set sum and date for payment should be more than happy to automate this tedious process. 

That’s why, at SLS, we firmly recommend that you do not sign a rental agreement with any prospective tenant who is unwilling to agree to the terms of PAD because chances are, such persons either expect or intend to be late or short on their payments moving forward.

As far as existing tenants are concerned, you should have a first-hand idea of why a known tenant may be unwilling to support PAD, perhaps they are a seasoned overdue payer, maybe their employer can’t be relied upon to pay them at the same time each month. Either way, come up with a solution, give them a firm talking-to or offer mid-month PAD payments as a solution, or you could simply allow them to continue paying via their usual method.

To cater to mid-month payments, the occasional payment irregularity, pet deposits, or compensation for damage caused by tenants, SLS does have the capability to process payments one-time payments for clients.

In conclusion

We hope we’ve shed some light on the incredible convenience that Pre-authorized Debit payments can bring to you and your property management business. 

Whether introducing this system to existing or prospective tenants, you should find the experience to be a wholly positive one, just as we’ve always found it to be at SLS. One thing’s for sure, by supporting PAD you’ll be giving yourself and each of your tenants one less thing to worry about!