Collecting rent shouldn’t be a hassle for you or your tenants. With the right tools, you can streamline payments, offer incentives for tenants to pay rent on time, and avoid outdated methods like cash and cheques. 

In this guide, we’ll cover the best ways to collect rent from tenants, how to set clear payment expectations, and which methods to skip for a smooth, secure rental experience every month.

Best Ways to Collect Rent as a Landlord

The best ways to collect rent from your tenants are electronic rent payments in the form of:

Interac e-Transfer 

Best for: Receiving money quickly and securely

This is the easiest and most common way to collect rent from tenants. Interac e-Transfer is widely used and supported by all major Canadian banks. Simply provide your tenant with your email, the amount of rent to pay, and the due date, and they should send you an e-Transfer on rent day. 

You can set up auto-deposit so the funds are deposited into your account immediately, and you won’t have to deal with security questions. 

However, some banks may charge fees if you receive multiple e-Transfers, especially with multiple tenants. There are also daily and weekly transfer limits for both you and the tenant. 

Pre-Authorized Debit (PAD)

Best for: Receiving automatic payments of the same amount

Pre-authorized debit is a little more complicated to set up, but it works just as well as e-Transfers–maybe even better. 

PAD agreements allow tenants to authorize recurring debit payments directly from their bank account to yours. It’s highly secure and reliable, and tenants don’t have to remember to send the payment each month. It’s a “one and done” setup. 

However, setting up a pre-authorized debit may take time and might require extra authorization paperwork. Banks may also charge a fee for each transfer–so watch out for that. PADs are usually best for long-term rentals where tenants are comfortable with automatic payments. 

Online Rent Payment Services 

Online rent payment services, like Chexy, are one of the best ways to collect rent electronically. These services allow tenants to set up automatic rent payments, so you don’t have to worry about missing any payments or charging them late fees. 

These online rent payment services also include benefits for tenants, like credit building, earning rewards, and splitting rent with roommates. However, watch out for any fees they may charge you and the tenant. 

Wondering which online rent payment service is the best for collecting rent in Canada? We tell you below. 

Photo by Jakub Żerdzicki on Unsplash

The Best Way to Collect Rent as a Landlord 

In Canada, there is one main rent collection service that you can get tenants to sign up for:

Chexy 

Chexy is a rent payment platform where tenants can earn rewards on their rent payments using their credit cards. They can also sign up for the credit building program for free, which reports their on-time rent payments to Equifax–all without your participation. 

Tenants sign up and input their credit card details. They can choose to send you the rent payments by Interac e-Transfer or pre-authorized debit. Both ways are a one-and-done setup, so payments are automatically sent to you on rent day. No more chasing your tenant for late payments! 

Both methods have a similar signup process, but with PAD, the tenant shares the created bank details with you. Once the initial setup is complete, their rent payments will be automatically withdrawn from their account and sent to you as a bank transfer on rent day. 

Pros:

• No participation needed from you

• Automatic rent payments each month 

• Incentives for tenants to sign up (earning rewards, building credit, splitting rent with roommates, etc.)

Cons:

• Processing fees for your tenants (1.75% for Canadian Visa & Amex credit cards, 2.5% for international credit cards) 

Payment Methods to Avoid When Collecting Rent

Here are two main payment methods you should avoid when collecting rent from tenants: 

Cash 

Some landlords still accept rent payments in cash, especially if their tenants are older and have been paying rent that way for years. However, you should not accept rent payments in cash. Here are a few reasons why:

• There are no formal records, so you and the tenant may have disputes over how much was paid.

• You need to physically go to the bank to deposit the cash and manually track the payments. 

• Tax reporting can become complicated if you accept cash payments without formal receipts. 

Cheques

Cheques are another old-school way of paying rent that some landlords may not accept. Here’s why you shouldn’t accept cheques for rent payments:

• When a tenant writes a cheque, it does not guarantee they have the funds in their bank account. 

• You need to manually deposit the cheque, either at the branch or through your mobile banking app. 

• There is often a wait time of a few days to ensure the funds clear. If the cheque bounces, this can mean weeks of delay before you receive the payment. 

• There is a risk of late or missed payments. 

Expectations in Your Lease for Paying Rent 

Make sure to clearly outline rent-related expectations in your lease agreement to help prevent misunderstandings. Be specific about the following: 

• Rent amount and due date: Clearly state the exact amount of rent, the due date, and any penalties for late payments. Indicate whether there’s a grace period to avoid disputes. 

• Accepted payment methods: List all accepted payment methods (e.g. Interac e-Transfer, PAD, online portal) and provide clear instructions for each method.  

• Late payment fees and consequences: Clearly define any late fees, explain when they’re applied, and whether late payments will be reported to credit bureaus. 

• Early termination and non-payment consequences: Include information on potential consequences of ongoing non-payment of rent, including lease termination and eviction procedures, per local laws. 

If you decide to only accept online rent payments, make sure all your tenants are comfortable with it. For example, elderly renters may need assistance to complete online rent payments. 

Using a rent collection service like Chexy is the best way to get automated rent payments every month. There are no high fees and many incentives for renters to sign up, including credit building and earning rewards on one of their biggest monthly expenses. 

Send your tenants this link to sign up for Chexy.