How to collect rent from tenants: write the amount, due date, accepted payment methods, grace period and late fee into the lease, offer at least one electronic method, send a reminder before the due date, and record every payment in one ledger per unit. Late fee limits are set by state law, so check yours before you set one.
Key takeaways
- Online rent payments rose from 4 percent in 2014 to 51 percent in 2025 on Rentec Direct's platform, and renters paying by cash or check were 23 percent more likely to pay late.
- About one in five renters could not pay rent on time or in full at some point in the three months before January 2026, per the Philadelphia Fed. Most cited a lack of funds.
- Late fee limits differ by state. New York allows the lesser of 50 dollars or 5 percent after 5 days; Texas presumes 12 percent reasonable for buildings of four or fewer units after two full days; Maine caps it at 4 percent after 15 days.
- Advance rent is taxable in the year you receive it, per IRS Publication 527. A security deposit you plan to return is not.
This guide is one part of the landlord guide, the overview of the whole job. It covers rent from the lease clause to the late notice: methods, late fees, the calls about rent, and the records.
How landlords collect rent: the payment methods
Collect rent online by bank transfer, with card or check as a backup. More than half of rent is now paid online. Bank transfer is cheap and lands in your account on a predictable schedule. Cards are fast and familiar but cost a processing fee. Checks are free and slow. Cash is the method to avoid, because it leaves no record unless you write one.
| Method | When the money arrives | Cost to you | Trade-off |
|---|---|---|---|
| Bank transfer (ACH) through rent software | A few business days | Low or none, depending on the software | Can bounce if the account is short |
| Card, online or by phone | Usually within days | A percentage per payment | Highest cost; disputes possible |
| Peer-to-peer apps | Instantly to a few days | Often none on personal accounts | Thin records; check the app's rules for business use |
| Check or money order | When you deposit it | Your time and trips to the bank | Slow; checks can bounce |
| Cash | Immediately | None | No record unless you write a receipt; a safety risk |
The trend is clear. In Rentec Direct's analysis of 1.2 million tenants on its software, online payments went from 4 percent of rent in 2014 to 51 percent in 2025. Renters who paid by cash or check were 23 percent more likely to pay late. Rentec sells rent software and notes its users may not represent the whole market, but the gap is large enough to act on.
Put the rent rules in the lease first
Rent collection starts in the lease. Every rule you want to enforce later has to be written there first, in plain words, and signed. In many states, a late fee that is not in the lease cannot be charged at all.
- Amount and due date: "1,450 dollars, due on the 1st." Say what happens when the 1st falls on a weekend.
- Accepted methods: name them, and name where to send each one.
- Grace period and late fee: when the fee starts and how much, within your state's limit.
- Returned payments: the fee for a bounced payment, if your state allows one.
- Partial payments: whether you accept them, and how they are applied.
States also regulate the methods. California's Civil Code 1947.3, for example, requires landlords to allow at least one way to pay that is neither cash nor electronic transfer, and bars a fee for paying by check. Other states have their own rules. Check yours before you go online-only.
How much can a landlord charge for late fees?
It depends on your state. Some states set a fixed cap and a minimum grace period. Others only require the fee to be reasonable, or say nothing at all, which leaves it to the courts. Several, including Maine, also require the fee to be disclosed in writing. The four states below show how much the rules vary.
| State | When a late fee can start | Limit | Source |
|---|---|---|---|
| New York | Rent unpaid more than 5 days after the due date | 50 dollars or 5 percent of monthly rent, whichever is less | Real Property Law 238-a |
| Texas | Rent unpaid two full days after the due date | Presumed reasonable up to 12 percent of rent (4 or fewer units) or 10 percent (more than 4) | Property Code 92.019 |
| Maine | Rent not paid within 15 days of the due date | 4 percent of one month's rent | 14 M.R.S. 6028 |
| Oregon | Rent not received by the 4th day of the rental period | A reasonable flat fee, or a daily or 5-day fee within set limits | ORS 90.260 |
Two things hold almost everywhere. Write the fee into the lease, and charge it the same way to every tenant. A fee waived for one tenant and enforced for another can invite a fair housing complaint. For your state, start with the landlord-tenant chapter of its statutes or the attorney general's tenant guide.
When rent is late: a calm sequence
Late rent is common and usually about money, not attitude. In the Philadelphia Fed's LIFE Survey, about one in five renters had missed, shorted or paid late at least once in the three months before January 2026. About 90 percent of those who missed a payment cited a lack of funds. A steady process gets more rent paid than an angry text.
- 1
Three days before the due date
Send a reminder with the amount and the ways to pay. Automatic reminders in rent software do this for you. - 2
The day the grace period ends
Send a written notice that rent is late and the late fee from the lease now applies. - 3
A few days later
Call. Ask when they can pay and how. If they offer a plan, get it in writing, with dates. - 4
If it is still unpaid
Serve the formal notice your state requires before an eviction filing, in the form and timing the statute sets. This is the step to check with a local attorney.
The step most landlords skip is answering the tenant who calls first. A tenant who calls on the 3rd to say the check is coming Friday, or to ask if they can pay by card, is the tenant you most want to talk to. If that call hits voicemail, the rent waits on your callback.
Rent by phone: taking payment on the call
Some tenants will always call. They want to confirm the amount, ask about the late fee, or pay right now while they have the card in hand. callflo.ai is an AI receptionist that answers those calls and can take the payment before the tenant hangs up.
Sample call: a tenant paying rent, the 3rd, 7:50pm
Here is how it works, and where it stops:
- Card on the keypad. The tenant types the card number on the phone keypad into a secure payment system. The AI and the call recording never hear it. The charge runs through Stripe into your own Stripe account.
- Or a link by text. If the tenant prefers their screen, it texts a secure Stripe payment link during the call.
- Only the amounts you set. You list what can be paid and the price: rent for a unit, an application fee, a pet deposit. It will not accept an amount the caller suggests.
- The rest comes to you.A partial payment, a payment plan or a fee waiver is a message for you, with the tenant's request and callback number, not a decision the AI makes.
Every payment is logged with the call and its transcript. The guide to taking payment on the call covers the setup in detail, and the pricing page shows which plan includes payments. For the other calls a landlord gets, see the page for investors and landlords.
Let tenants pay rent on the call, at any hour
Call callflo.ai's own AI agent and ask it anything about your business. When you are ready, pick a plan: no setup fee, no contract, and you do not pay unless you are satisfied.
Starter is $39 a month on annual billing. Live on your line about 5 minutes after you sign up.
Records and taxes
Keep one ledger per unit: date due, date paid, amount, method, and any fee charged or waived. Send a receipt for every payment, and always for cash. If rent ever ends up in court, the ledger is your evidence.
Rent is taxable income, and the timing rules catch new landlords. IRS Publication 527 says advance rent goes in your income for the year you receive it, whatever period it covers. A security deposit you plan to return is not income. Any part you keep for damage or unpaid rent becomes income in the year you keep it.