If you bought property while living abroad for a few years for example and did not want to immediately sell up, you could test the water to see if any tenants may be keen to occupy it as you move back home. Furthermore, you may have purchased a holiday home and renting it out may be more advantageous than ultimately leaving it empty for months on end.
Of course, there are many things to consider once you do decide to establish a rental business, with a key one being just how you will receive rent. Here we have pulled together three different approaches you could take on the matter as you look to make a little bit of cash from your property interests.
1. Post-dated cheque
As AccountingCoach.com explains, a post-dated cheque is essentially a cheque which is written out and includes a date in the future on it. When it comes to paying rent, a tenant would agree with a landlord that the cheques in question would not be cashed or deposited until after the date which is stipulated.
The use of post-dated cheques is quite common in a number of areas across the world. For example, as this property website explains, it may be something people come across if they are looking for flats to rent in regions such as Sharjah. The practice of making rental payments through four to six post-dated cheques is used often in the area, which borders Dubai and has become a popular option due to its affordable rents when compared to the neighbouring city.
2. Online payment platforms
A more modern approach to the issue of rent payments may be to accept online methods such as PayPal or more specialist services. Payments through such services tend to be processed very quickly, while a major benefit is that their use is common across the world.
For example, as this website outlines, there are a host of online rent payment services available for landlords with property interests in the US. The likes of Cozy, Avail and PayYourRent include a range of features designed to ensure payments are received swiftly and easily.
3. Bank transfers from a local account
Alternatively, you could simply ask tenants to transfer rent from their bank account into one which you have established in the country or region where your property is based. The method is popular in many areas and, as this website explains, is commonly used to pay rent on property in Spain.
This may be a straightforward step to take as it would mean there could be the option of direct debits and standing orders too. However, that approach would, of course, mean you would need to manage and decide on how you access those funds, which would be held abroad.
Remove stress and concern
Renting out property can be a real money-spinner for those who are fortunate to have homes in a host of desirable and in-demand locations. Furthermore, having access to the right payments can help to take a lot of stress or concern out of managing or owning such properties.
The approaches listed above should hopefully give you some ideas on how you could address this issue as you get started with your own rental business.
Like most industries at the moment, the financial sector is experiencing vast change, and fresh legislation is coming into play to adjust to the shifting economic landscape and its demands. For financial services and payment services providers (PSPs) operating in the online banking arena, this will raise some concerns.
The Second Payment Services Directive (PSD2) came into force in January 2016, and will become EU law on 18th January 2018. PSD2 looks to encourage competition, protect consumers, and unify Europe’s markets. The implementation has been prompted by the growth of e-commerce and mobile business, and despite Brexit, this is something that is relevant to all European operating PSPs and banks.
The industry is accelerating towards the age of open banking, where PSD2 will enable previously-isolated payment accounts to draw upon one another, giving third parties the ability to access a bank’s application programme interface (API). This will allow them to bypass traditional compliance and infrastructure demands placed on the host. By doing so, the legislation removes the banks’ monopoly on their customers’ account information and payment services.
Many first-mover FinTech organisations and open banks have already recognised the opportunity here and thanks to their agility, have already earned customers’ trust. But the change isn’t quite so readily adaptable for the likes of the established banks.
Indeed, it’s understandable that most established banks see PSD2 as a threat, or at least view it with uncertainty. But the approaching era for open banking is inevitable, and these banks will need to instead consider how this legislation presents fresh opportunities and will incite new, best business practices.
Not all banks are viewing this legislation negatively. In fact, PwC recently found that nearly half of them (44%) are preparing to offer open banking in the next five years. However, with PSD2 coming into place in January, these plans may need to be brought forward.
PSD2 makes the need for collaboration and innovation explicit; only by developing new systems will PSPs meet the consumer’s increasingly-high expectations for fast, simple and secure digital banking. But this won’t be straightforward for banks with legacy technologies, however, they do have other benefits such as access to vast amounts of data, robust customer relations and scope of reach.
As a result, despite banks inevitably being slower than PSPs on the uptake, their scale and heritage will enable them to face the challenges brought about by PSD2 and subsequently they’ll advance their services with new levels of customer-centricity in doing so.
Another benefit for banks will be the ability to integrate third-party approaches to building and testing new business models, enabling them to more flexibly meet changing consumer demands. And by taking a collaborative approach, they will be able to extend their reach into new markets, and draw upon deeper insight from consumer data to create new products and services.
PSD2 may seem like it is opening the door to competition, but doors swing both ways. By overhauling their technological capabilities to meet digital demand, it will not be long before banks are working more closely with the forward-facing third parties that are proving so popular with the consumer – and even beating them at their own game.
Website: https://www.blackpepper.co.uk/
