The best way for tenants to pay rent is always a hot topic among landlords. Some property owners still prefer the traditional method of collecting a paper check and depositing it in the bank. However, many landlords have embraced technology and encouraged their tenants to pay rent using more secure methods. Collecting rent online using a rental payment app, direct bank transfer, or digital wallet is becoming more and more popular.

Are you a landlord who waits for rent checks to arrive in the mail every month? If so, changes in the U.S. Postal Service (USPS) may mean you have to wait even longer. Starting on Oct. 1, the USPS mail delivery became slower, possibly impacting how quickly you receive monthly rent payments.

Does the postal service slowdown mean that it’s finally time to ditch rent checks for good?

Why rent checks will take longer to arrive

Getting rent on time is crucial for your cash flow. Rent checks that arrive late mean delays in how quickly funds are available in your bank. When many landlords are struggling to make ends meet, more delays in depositing rent checks are unacceptable.

As of Oct. 1, 2021, many pieces of mail will now take longer to arrive. According to reports, U.S. Postmaster General Louis DeJoy announced that the long-term plan is that first-class mail delivery will take up to five days. That is in place of the standard three-day window. Many local governments are already predicting that the change will negatively impact essential services.

For example, CNET reported that USPS “snail mail” could lead to delays in receiving unemployment checks, child tax credit payments, and other vital mail. Additionally, the changes could see mail deliveries become more erratic and harder to predict. If your rental units are in the state where you live, the changes should affect you, but you can still expect mail to arrive within a two-day window.

Even before the changes to delivery times, the USPS was struggling to deliver mail on time. During the first quarter of 2021, CBS reported that 20% of mail arrived late.

Can you afford to keep collecting rent by check?

Even before the changes to the postal delivery times were rolled out, there were compelling reasons to avoid collecting paper checks. For example, from the time your tenant mails the check, it can take up to seven days for the funds to be available in your bank account. Also, checks can go missing or get stolen, and there’s no guarantee that the tenant’s bank account still has the necessary funds.

Considering the potential problems that allowing tenants to pay rent by check causes, many landlords have switched to alternative rent collection methods. This saves money and time.

Here are a few ways that rent checks could be costing your rental business money.

Poor cash flow: Let’s face it—we all forget things, so it’s not uncommon for a tenant to forget to mail the check. With mail taking longer to arrive, you may have to wait even longer for the rent payment to come in. Adding to that is the check processing time (see the next point). During this time, your cash flow suffers.

Time processing paper checks: Think about the time it takes you to deposit the check. First, you must wait for the mail to arrive. According to the USPS, this could now be between two and five days. Next, unless you use online banking, you must drive to the bank, stand in line, and deposit the check. Then you must wait on the funds clearing, hoping that the check doesn’t bounce. Processing checks takes time—sometimes up to seven days.

If the check bounces, it could take a couple of weeks for the bank to inform you. This means that your tenant is late with the rent. Now you have to charge late fees and deal with the confusion. After all, the tenant probably wrote you the check in good faith that they had enough funds.

Risk of check fraud: A common concern when switching to online banking is the risk of fraud. Tenants or landlords may be worried about clicking on fraudulent websites or money getting redirected to other bank accounts. But did you know you’re at a greater risk of check fraud than online payment fraud?

According to Texas Citizens Bank, check fraud accounted for 47% of industry losses in 2018. And this was a 12% increase in two years. Yet, at the same time, debit card fraud decreased. The reason? Banks are investing heavily in reducing credit and debit card fraud and less on check fraud.

The FTC also reports that it can take weeks to discover a fake check, even after the check has “cleared.” This means that the receiver—in this case, the landlord—will then lose the money. Of course, the chances of a trusted tenant sending a fake check are probably zero. However, it highlights one of the many problems with accepting payments by check.

Reasons to switch to online rent collection

Advances in technology mean that collecting rent by paper check will become obsolete. There are many faster and more secure ways to collect rent and streamline your rental business. So why stick to an outdated method of collecting rent when there are better alternatives? Maybe it’s fear of technology. Or it could be a landlord is stuck in their ways.

It’s easy to see why switching to online rent collection is the way forward when you know the benefits. Here are some to consider.

• Online rent payment saves time because the funds are in your bank account instantly.
• You can easily accept many forms of rent payment.
• Tenants can set up automatic payments and direct deposits.
• Postal delays will never affect rent collection.
• Using a rent payment app includes other landlord-specific features to enhance rent collection.
• Online rent payment protects you from fraud.
• You don’t have to enter rent payments in ledgers manually.
• Using online rent payment can help reduce the occurrence of late payments.

Most tenants already use some form of online payment system to pay bills and shop online—so why not have them pay rent this way as well?