When you buy a product or pay for a service, you usually get a receipt showing proof of the transaction. So, reason states you should provide rent receipts to your tenants when they pay rent each month.
Rent receipts help tenants feel secure that you received their payment and give property owners and managers a tool to track and manage their transactions. The receipts can serve as important documentation if an issue with rent payment arises, as well.
If you’re not sure when to use them, we can help. This guide includes details about how to write a rent receipt (including a template) and how to send them to your tenants.
What are rent receipts?
A rent receipt is just like any other receipt. It’s a document showing that a property owner or manager received the monthly rent payment. You should use it no matter how a renter pays — by check, money order, cash or electronically. The receipts typically include the amount paid, the date it came in and the tenant who paid the rent. Rent receipts protect you and the tenant in case a rent payment turns up missing.
Why use rent receipts
Rent receipts primarily serve two purposes. They provide proof that a tenant paid their rent, so they can maintain their monthly budgets. They also help property owners and managers track that you received their rent and when and streamlines the financial aspects of running the property.
Here’s why you really need to use rent receipts:
1. Provide a paper trail
This is especially important if tenants pay their rent in cash. Giving them a receipt shows that you’ve received their payment. Rent receipts also ensure that you remember who gave you that envelope of cash and generally keep track of rent payments. This documentation will be useful if you ever get audited, as you would have proof of all rental deposits.
2. Sometimes required by local law
Landlord-tenant laws vary by state and sometimes, even by city. In some cases, local rental laws may require that property owners and managers provide rent receipts and keep a record of receipts for all rent payments.
3. Help organize your records
Owning and managing rental property comes with lots of paperwork. While rent receipts likely seem like more paper to add to the stack, they can help streamline your record-keeping and keep track of rental income. And, you can always use a spreadsheet or software to send and track receipts to avoid accumulating paper files.
4. Reduce tenant-landlord problems
Problems can arise, but good record-keeping can keep disputes to a minimum. If you’re missing a rent payment, but your renter swears they paid it, you can always pull out a receipt.
5. Tenants ask for them
If you’re not offering a rent receipt, your tenant may ask for one. In these instances, it’s a good idea to start using them, especially since maintaining a respectful relationship with renters is crucial.
Property owners and managers should always keep copies in their records. Encourage your tenants to keep copies, too. Explain to them the value of having proof that they paid their rent in case an issue comes up.
When to provide rent receipts to tenants
Each time you receive a rent payment, provide the tenant with a receipt. You should also use receipts for any other tenant payment, including:
It’s always a good idea to provide proof of payment for everything to protect yourself and your renters.
How to send rent receipts to tenants
How exactly you send rent receipts to your tenants is up to you. It might depend on how you collect rent — which you should spell out in the lease agreement. For example, if renters pay by cash, check or money order in person, it would be most convenient to provide a receipt in person.
Here are some ways to send receipts to tenants:
- Hand deliver a paper copy to the tenant
- Mail the receipt to the renter
- Email as a PDF
Keep in mind that more than 80 percent of people prefer to pay their bills online, according to a study by NTC Texas. Using a service like RentPay or other electronic rent collection method lets tenants pay quickly and a receipt will be automatically generated for you and the tenant. You’ll also receive notification as soon as someone pays and renters have the convenience of setting up automatic payments.
How to create a rent receipt
Rent receipts should include specific information to ensure you’re keeping clear and detailed records. Make sure your receipts include the following:
- A receipt number
- Tenant’s full name (or the full name of another person paying rent on their behalf)
- The property address, including apartment number
- Date you received payment
- Payment amount, including rent, pet rent, utilities and other monthly fees
- Method of payment, such as cash, check, electronic payment or another type
- Payment period for the rent, for example, Feb. 1-28, 2022
- Any remaining balance, such as past-due rent or late fees
- Name and signature of the property owner or manager receiving the payment
Then, make a copy to give to the tenant. And, keep one for yourself.
Rent receipt template
The best way to streamline the process is to create a template that you can reuse for each tenant. A template will help you make sure you don’t forget an important piece of information and that you’re treating all tenants equally. We’ve created a rent receipt template that you can download.
Giving rent receipts to your tenants
Giving tenants a rent receipt is good business practice. It serves as proof that they paid their rent and helps property owners and landlords manage their rental income.
Source: rent.com