In the Real Estate business, technology plays a huge role in our ability to communicate with our tenants and streamlines the method in which we are able to receive rent into the agency’s trust account.
The method by which we collect rent will largely depend on the demographic of clientele and the location of the agency. For example cash payments are still a common occurrence in rural agency practice and credit card payments are often used in high-end inner city agencies.

There are a number of different payment options available for tenants but the question is, which ones are better than others? And how do you ensure that you’re not creating an accounting nightmare in your agency

The other issue with offering too many options is that it’s extremely costly to the agency, some payment options also carry risks to the agency and can create an enormous amount of effort in reconciling the different methods within the trust account.

In NSW, the Residential Tenancies Act 2010 stipulates that there is a minimum requirement of 2 payment methods, one of which must be free to the tenant. There may be variations of this in your state however the agency should be offering flexibility to tenants and ensure that there are a number of different options available so agencies can minimise arrears.

What rent payment options are available?

  • Cash
  • Cheque
  • Money Order
  • BPay
  • Direct Debit
  • Direct Credit
  • Rent Card
  • Paying at Bank or Post Office
  • Centrepay or Rent Deduction Scheme
  • Credit Card/EFTPOS

Case study:

End of Month Angels consulted to a Real Estate agency that was offering all 10 payment methods to their tenants. The difficulty they faced was that having these payment methods made it very difficult to reconcile the trust account, often pulling Property Management staff from their normal roles to assist in locating the payments which were mostly due to errors in the way the bank processed the payments. This was costing the agency a small fortune in transaction fees, sometimes up to $1500 per month or more just for the convenience of being flexible to their tenants.

We decided to break down these payment options and look at the costs associated with offering these methods within modern agency practice so that agents can make an informed decision about the right method for their needs.


By far the far the simplest form of payment because there are no fees incurred to the agency. The funds are clear and can be banked immediately into the trust account.

It is also the riskiest form of payment in terms of the security aspect, exposing us to potential harm. I previously worked at an agency where cash payments were regular. One of the staff members was held at knifepoint whilst depositing the daily rent takings.

The biggest down side to cash apart from security is that the agency must be open to receive the funds. If you’re not open, you don’t collect rent. This can become a real nightmare during the post-Christmas collection period with a revolving door of tenants wanting to pay rent. It’s just not an effective way of doing property management.


Cheque payments are generally a favourable free method for the tenants to make payment into the trust account. They can be posted and are an easy way for the tenants to make payment, especially as they can send the cheque outside of agency hours.

The difficulty is that many agents are unaware of the fees associated with depositing these rent cheques into their trust account.

There are two major fees to consider with the cheque method:

  1. Fees for depositing into the trust account can be between $1-$10
  2. If the cheque bounces the agency incurs a $20-$40 dishonour fee which is often difficult to recoup from the tenant

Money Orders

These offer the same benefits as writing a cheque. They can be a little costly for the tenant to obtain nowadays which is not ideal for them and, just like a cheque, a money order can have a stop payment placed on it, again thus making the agency incur a dishonour fee after funds bounce on the statement.


This is a fabulous way of collecting rent because it offers ease of use for the tenants as they can perform bpay transactions from any bank, anywhere in the world, at any time and it’s free for the tenant. The difficulty is that it’s the agent that pays for the luxury of offering this type of service, generally around 0.99c per transaction. It doesn’t sound high, however multiply 0.99c by 100 tenants paying multiple times within a one month period and it becomes an extremely costly exercise.

Direct Debit

Is very easy to setup. You can obtain an authority form from your banking institution and have the tenants sign an agreement to deduct on the rent due date. The worst part about direct debit is that you’re heavily reliant on the tenant making the funds available in their account on the due date. If the bank is unable to make the deduction from the nominated account then it will be the agency that will incur the dishonour fee, roughly $30 per dishonour.

Direct Credit

Is where the tenant simply transfers the funds from their bank account to the trust account. This is one of the easiest forms of payment. The fees incurred on these types of transactions are minimal.

Rent Cards

Rent cards are reward cards from third party providers. They are typically common within franchise groups. The service isn’t free for the tenant. It generally costs between $3-$5 per month in administration fees but is free for the agency. Unfortunately this method isn’t iron clad because some cards pass on dishonour fees to the agency. Payments are also subject to a 3-5 day clearance time.

Paying at Bank or Post Office

Another very simple form of rent collection. It involves your financial institution issuing a deposit book or deposit card for each tenant. Typically costing around $1-2 per card issued. Lost cards will also incur a replacement fee.

Centrepay or Rent Deduction Schemes

These are methods by which tenants may elect to have their rent deducted from their pension or other government benefit they receive. Many people believe that it is guaranteed income for the Landlord, it is not. It is initiated by the tenant, not the Government agency and payment can be stopped at any time. Fees incurred are borne by the tenant. However when received into the agencies trust account, it will be 0.99c less than the agreed weekly or fortnightly rental payment. For example, if the weekly rent is $400 per week then the amount the agency will receive is $399.01.

The owner heads the 0.99c cost and can then claim it as a tax deduction.

Credit Card/EFTPOS

This requires the agency to enter a commercial agreement for terminal services to be setup with the bank. The cost for providing this service is enormous taking into consideration monthly terminal and transaction fee costs.

Tenants who typically favour this are those that wish to earn frequent flyer points for paying their rent. Even with recoverable surcharges, it is the agents that will end up paying for the tenants next trip to New York.

Have you weighed up the cost of rent collection in your agency? Does your agency offer more than 5 of these methods? Do you have provisions in your lease agreements to recover dishonour fees? Or do we just need to offer as many options as possible in order to provide good service to our Landlords? We’d love to hear your thoughts/comments.

(We base our costs in this article on industry knowledge and experience. You should make the appropriate enquiries with your financial institution and decide which options best suit your agency).

Want to know more about the trust accounting services my company provides or have any trust related questions? Don’t hesitate to get in touch: jane@endofmonthangels.com.au

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~ Jane Morgan is the Director of End of Month Angels, a consultancy firm specialising in Trust Accounting. Jane knows the legislative requirements of running a successful Real Estate office through her 18 years industry experience. Don’t trust just anyone with your trust accounting. Trust End of Month Angels and get back to what you do best – growing your business