Why You Should Use Rent Receipts as a Landlord

Any taxpayer will tell you that you should keep a receipt for every business-related purchase, no matter how small. Yet, many landlords aren’t keeping a paper trail of what is often their most important form of monthly income: rent.

A rent receipt is a simple document that shows that your tenant is paying rent. In this article, we will tell you why you need a rent receipt, how to fill it, and how to accept rent payment online.

what is a rent receipt

Rent receipts provide proof to landlords and tenants that rent was paid. They are often more for the benefit of the tenant than the landlord because it provides proof to the tenants that they have honored the terms of their lease. It’s hard to prove whether they pay in cash or by cashier’s cheque.

Rent receipts are physical (sometimes digital) documents that make it easy to keep track of payments. They can also be extremely helpful for landlords or property managers. Also, a rent receipt can aid in their collection efforts if the tenant’s check bounces.

Why is it important to have a paper trail?

First of all, we get it. Landlords already have a lot to do, and getting rent receipts for them and their tenants to sign can seem tedious. Plus, most tenants won’t request one- some don’t even know about them! However, like many things in life, you don’t need them until you make them — and when you do, you’ll probably be grateful to have them.

Apart from being physical proof of monthly rent payment, here are some more reasons why it is important to use rent receipts:

• Rent receipt may be required, many states including washingtonLandlords are required to provide rent receipts if the tenant requests them. If they fail to do so, tenants can file a complaint with their local Department of Consumer Affairs or a comparable agency in their area. The landlord can get fined as a result.
• Rent receipt can prevent disputes, If the tenant or the landlord agree as to whether the rent was paid or not, the receipt of the rent may be terminated before the dispute has arisen. If a tenant always requests a receipt when they pay rent, but can’t get one for that month(s), they might think twice before accusing their landlord of double charging.
• Rent receipts can settle disputes, If a landlord insists that their tenant hasn’t paid the rent yet, but the tenant can provide a rent receipt that proves this, it may prevent the disagreement from developing into something more. Also, if a tenant wishes to dispute the late fee they have received, the rent receipt will be shown to them at the time of paying the rent. If it was paid on the 10th and their rental agreement states that a late fee will be charged if rent is not received by the 5th, then the tenant will know they are responsible for paying the fee.
• Rent receipt gives peace of mind to landlords and tenants, A physical document proving when the rent was paid. Eliminates any unclear areas regarding whether the landlord received payment.

how to fill rent receipt

Filling out a rent receipt is a simple task and should only take a minute of your time. If you create a rent receipt template, it’s even easier!

Here’s the process, step by step:

1. Enter the payment date and receipt number at the top of your form:
2. Enter the property address and the name of your tenant. If you’re using the rent receipt template, you can automate the address and have the tenant type in their name instead.
3. Include the amounts paid and their method of payment.
4. Identify the rental term of the receipt. If there is an outstanding balance (for the month in question or for carry forwards from previous months), include that here as well.
5. The tenant then prints and signs their name, proving they received the rental receipt.
6. Next, the landlord provides their contact information (which can be automated using the rent receipt template) and signature.
7. Lastly, the landlord can make a copy of the rent receipt for his records. You may receive an email with an online rent receipt that the document has been signed.

Here below is an example.

What if a tenant pays rent online?

If you are a landlord or property manager not yet accepting online payments, you should be!

Worrying about whether a tenant will make payments on time is usually a main concern of landlords and property managers. These days physically writing or mailing a check is often considered an inconvenience.

Think of it this way: the average age of tenant Someone who is under the age of 40 and has grown up with the internet, email and all things digital. Many renters only have checkbooks because their landlord only accepts checks. While it may seem trivial, this extra step can leave them paying late and getting charged fees or forgetting to mail the check altogether.

And when one gets left behind, it can be challenging to catch up.

Here are some more reasons why you should consider making online rent payment an option:

renters love it

83% people want to pay your bills online, and 57% already do, This is up from 24% in 2020 and 17% in 2019.

Can automate tenant payments

When a tenant sets up their online profile, they usually have the option to automate their payments. By choosing to do so, they can automatically make rent payments each month—and these payments will be made on time, as long as they have money in their account. It takes the human error of forgetting or paying rent out of the equation.

Online payments are secure

Using the online system to pay rent is one of the most secure options available to tenants. Paper checks contain a lot of sensitive information, including your name, address and bank account information. If they get intercepted, you could be vulnerable to fraud.

automated rent receipts

Finally, online payments can automatically sync with your accounting system and provide proof of payment to you and your tenant. You don’t have to worry about producing physical receipts every month for your and your tenant’s records.

conclusion

Whether you want to switch to online payment or prefer the traditional method, it is always important to maintain a paper trail. Even though it may seem mundane to present a rent receipt, you’ll be grateful if one of your tenants disputes a payment.

Note by BigPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.