Have you been thinking about investing in real estate?
Did you just get your first-ever tenant? Congratulations!
Well, do you know what it means in business terms? It means that you are now an official renter, and you will now need to know how to write a rent receipt. A rent receipt is very important for both the tenant and you as a renter.
Rent receipts help you keep track of the income you make from the rent and also help the tenant keep track of their expenses.
It should be mandatory for every rental agreement to come with rent receipts.
In this article, I will take you through all the details and purposes of a rent receipt and how to write one so that your real estate business may go as smoothly as you planned it.
- A rent receipt is physical proof that the tenant has indeed paid to the landlord.
- Not only will a rent receipt keep track of the income the renter makes from the rent, but it will also keep track of all the rental expenses the tenant has to incur.
- A rent receipt is a great way to sort out any issues regarding the payments.
- A landlord must issue the receipt to the client with their signature and keep a copy of the same with themselves.
- If the tenant has not made the payment in person or through cash payments, a landlord can still generate a rent receipt through the online payment portal of their choice.
- A rent receipt must be issued under the following circumstances – rent payment, late payment, security deposit payment, and partial payment so that each of the transactions is duly noted.
- The local or state law requires the rent receipt.
What Is Called A Rent Receipt?
A rent receipt refers to an official document that a landlord or a property manager provides to a tenant. It is an acting proof that a monetary transaction is made for the purpose of rent. A rent payment can be made in multiple ways:
- Check payment
- Cash payment
- Electronic fund transfer
- Money order
- Credit card payment
Regardless of the type of payment, a rent receipt must be issued in all cases.
Issuing Rent Receipts
It is crucial when you give out a rent receipt. If you are receiving payments for rent, please go through the steps below about issuing a rent receipt for the purpose of payments:
- Collect the payment fund from the tenant.
- Generate or write a rent receipt and sign it accordingly.
- Make two copies of the same. Give one to the tenant and keep the other one for yourself.
If you are new to the business and never wrote a rent receipt before, stay with me to learn how to write one correctly.
How To Write A Rent Receipt Correctly?
A rent receipt includes the date and the rental period of the payment, the property’s address, the full name of the tenant, and the person to whom the payment is made.
Put in the payment amount, the payment method, the remaining balance on the lease, if any, and any other information that could be significant, such as a late fee or penalty.
If you are new to this and have never written a rent receipt, you can easily get one online and print it out, for instance.
However, whichever method you are choosing, it is very important that you include all the necessary information and fill it out properly. The vital information in the rent receipt includes the following:
- The date of the payment
- Which rental property is the payment for
- The full name of the tenant
- Who received the payment
- The payment amount
- The rental period the payment is for
- The property address
- The method of payment
- The remaining balance for the lease
- Late fees, if there have been late payments
You are free to add any other information that you may feel is valuable or your tenant feels so. If you have downloaded a rent receipt from the internet, you may have already realized that the template can be modified as per the requirements of the renter and the tenant.
Sending A Rent Receipt
There are multiple ways in which a landlord can send a rent receipt to their tenants. If the tenant has paid in cash, the best way is to hand over a handwritten rent receipt. If you are choosing to issue a handwritten rent receipt, you will get many books available that come with the template in it. These books contain a blank template, a cash receipt template, or a generic receipt template with only the necessary details.
In the case of electronic payments, whichever service you choose to use will maintain an online record. Most times, an electronic payment portal gives you easy rent receipts. The portal will keep track of everything, including the payable amount and the method of choice.
The portal itself will provide a copy of the rent receipt to the landlord and the tenant. They can print the same copies if needed.
Benefits Of Maintaining A Rent Receipt
As a landlord or a renter, maintaining rent receipts will keep you on board legally; as multiple local and state laws expect landlords to maintain rent receipts in different cases. If your state does not have any such rules regarding a rent receipt, you should keep in check with the local city housing board, as the local laws may vary in many cases.
A rent receipt also helps you maintain a professional appearance within the business.
Why Do Renters Need To Use A Rent Receipt?
There are many reasons as to why a renter or a landlord must use a rent receipt. The biggest reason is to keep and maintain records. Regardless of the kind of rent receipt that you are using, they will always be helpful in maintaining accuracy and transparency between you and your tenant.
A rent receipt is also one of the best ways to keep disputes at a minimum. If, in any case, there is a disagreement between the renter and the tenant regarding the payment, a rent receipt acts as living proof to solve such disputes.
The Bottom Line
Renting out a property is hectic and deserves acute attention from the renters. From maintaining the property to looking after the various issues raised by the tenants – the responsibilities are never-ending.
A rent receipt is just another way to lighten the stress for renters and maintain a transparent and undisputed relationship between a renter and a tenant.
Thank you for staying with us for this long. I hope you found this article helpful. If you have any unresolved queries, please feel free to drop a comment below.