As a society, we’ve forgone cheque and cash payment methods when paying bills. Instead, we’ve become accustomed to two options: Direct Debit and BPAY.
But what about the world of paying and receiving rent?
At Dynamic Residential, we pride ourselves on looking after our rental providers. We seek to find the most reliable, secure and transparent ways to manage their investment properties, from signing agreements to recording property inspections. And how renters pay their rent to you is no exception. With these values in mind, Dynamic Residential favours the Direct Debit option, as, in our opinion, the benefits outweigh those provided by the BPAY payment method.
What is the difference between Direct Debit & BPAY?
Direct Debit is an automatic transaction. It is set up by the provider with a form the payer fills out with their details, including bank account, the percentage of rent being paid (if sharing a property) and frequency (weekly, fortnightly or most commonly, monthly). It ensures full payment in one transaction at agreed intervals.
BPAY is an electronic bill pay system. A provider will supply the payee with a biller code and reference number with each bill received. A bill can be paid online or over the phone by quoting these numbers and selecting the amount to pay. It needs to be done each time, putting the onus on the payee to a) pay their bill on time and b) pay the correct amount.
Why is Direct Debit the preferred option for paying rent?
First and foremost, signing our renters up to pay via Direct Debit ensures their rental payments are made on time every month, and our rental providers can expect a regular income stream.
It also provides a convenient automated service for renters to pay. Essentially, we set so you forget, meaning all parties save precious time each month otherwise spent making and chasing payments and dealing with unnecessary admin.
BPAY requires manual effort, meaning there are more opportunities for problems. Firstly, a renter can pay less or make a mistake. There is little to deter them from paying several days late, and usually, there are no financial deterrents from the bank, property management company or rental provider. These late or incomplete payments can cause frustration and financial stress to the payee. To the payer, continually late or incomplete payments may lead to a poor rental record or, even worse, eviction.
There are other advantages to receiving your rental payments by Direct Debit
- Fewer part payments and one complete payment at an agreed interval mean neater statements that are easier to tally up, especially at tax time.
- Bank-issued dishonour (or returned payment) fees help ensure renters have the required funds available on the due date. These are the charges a person receives when a debit is processed without appropriate funds in their bank account. Direct Debit helps to ensure consistency with rental payments so you can confidently manage your money and make your mortgage payments.
- Renters don’t need to remember to process the payment each month manually. They need to ensure funds are available and the transactions are processed automatically.
As property managers, rental providers trust us with one of their most valuable assets. In return, they expect their rent to be paid on time, every time. That’s why at Dynamic Residential, we use Direct Debit for rental payments so that your income stream is predictable, consistent and handled professionally.
If you’d like to chat with one of our property management team about how we can make renting your property easier, get in touch today.