The Best Way To Collect Rent From Your Tenants in London
By Azeem S. | Created on 20th April 2026
Collecting the rent on time is crucial for landlords in East London – otherwise, you could end up out of pocket for interest payments on your buy-to-let mortgage. Areas like Stratford, Barking and Dagenham can generate good rental yields, but missed payments can leave a noticeable gap in your income.
A missed rental payment can cause much anguish and stress, and no landlord wants the hassle, expense or resentment of going to court to evict a tenant for non-payment of rent.
This article outlines the best way to collect rent to make sure you get paid by tenants on time, every time.
What’s The Best Way To Collect Rent?
Choosing the most convenient payment method for both you and your tenants can help to ensure rent payments go through smoothly. For many tenancies, this will be through Standing Order or Direct Debit but there are several other options that may be more suitable for you. Collecting via Direct Debit means that the landlord controls the rent collection and there is a set date for payments.
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Table: Overview of Rent Collection Methods
Method
Best For
Pros
Cons
Standing Order (Bank Transfer)
Most landlords
Reliable, automated, no fees, easy to track
Tenant controls payment (can cancel/change)
Direct Debit
Maximum control
Landlord controls collection, consistent timing
Possible setup/admin fees, more complex than SO
Online Platforms and Apps
Flexibility & convenience
Fast, easy, automated reminders
Fees, risk of disputes
Letting Agent Collection
Hands-off landlords
Fully managed, less admin
5–10% fees, less control
Cash/Cheque
Rare/legacy cases
Immediate (cash), simple
Risk of theft, poor records, outdated
Before Arranging Rent Collection
Before looking at the best ways to collect rent payments, put everything in place to fulfil all your legal obligations as a landlord or property manager. Before you arrange rent collection, you need the following:
A Contract (Tenancy Agreement) – this lays out the responsibilities of both the tenant and landlord and helps settle disputes if they arise. It also defines the due date on which rent should be paid each month and in what manner.
Most landlords ask that rent is paid in advance, usually on the first day of the month. If tenants move in mid-month, landlords will calculate rent for the first month pro-rata from when the tenants moved in, to the end of the month. Alternatively, some landlords will set the rent date according to the anniversary of the tenancy agreement. So, if tenants move in on the 12th of the month, the rent is due on the 12th of each month.
The tenancy agreement should clearly state when the rent is due and whether it is paid in advance or arrears.
If you neglect to include this in the contracts, then by default, the tenants are entitled to pay the rent in arrears if they wish. Landlords that accept tenants who receive benefits may need to permit rent in arrears.
Is There A Best Way To Collect Rent From Tenants?
There is no one best way to collect rent as a landlord. It varies depending on your situation, but direct debit is generally the most reliable. We’ll explain why later.
It isn’t common for landlords to accept rent payments by debit card or credit card. Card payments can be inconvenient, with tenants having to remember and then manually pay their rent, leading to potential missed due date rental payments. Also, there are usually processing fees that you will have to pass on to your tenants.
Then again, some landlords might prefer to receive cash or get paid by standing order. We don’t know of any landlords who like to receive a cheque, incidentally (not nowadays, anyway). Since these different rent payment options are still around today, we’ll discuss each option.
1. Rent Payments By Direct Debit
Direct Debit payments are similar to Standing Orders. They are also a form of automated rent collection where rents are paid out regularly. The difference is the landlord has more control over the payment. They get the tenant to sign a mandate (with the payment amount and payment date outlined).
Advantages of payment by direct debit:
Simpler record keeping – receiving rent via direct debit means you also have a simple record of what has been received and when, making your tax assessment form so much easier.
More control – payments are automated
Flexibility – the payment amount can be changed
Easily confirmed – you can use your existing online banking service to check if it’s arrived
Disadvantages of payment by direct debit:
Mandate needed – can prove awkward (though many landlords use a third-party provider such as a rent collection agency to handle this)
No cancellation warning – again, you don’t receive any notification if your tenants cancel the payment
2. Collect Rent Payments By Standing Order
Standing Orders are regarded as the best way to collect rent by many landlords. This bank transfer system is easy to set up and track. A fixed amount is automatically paid on the same date every month until the tenant cancels it.
It’s also possible to check the rent has arrived by simply using internet banking, i.e. checking your bank account online. Standing Orders, like Direct Debits, are both excellent ways to collect rent online for free.
Advantages of payment by standing order:
Reliability – rent payments are collected automatically, instead of relying on the tenants remembering
Convenient – you can check online banking to see if the rent payment has arrived yet
No additional software or service – you can use your existing online banking service or app to check if the payment has arrived
Disadvantages of payment by standing order:
Lack of flexibility – you can’t change the payment amount or date without setting up a fresh standing order
No warning of cancellation – if the tenant cancels, you won’t get any notification
3. Collecting Rent Payments By Cheque
Yes, cheque payments are still around today – although we’d be surprised by any landlord in East London who wants to receive their rent this way. We certainly wouldn’t describe cheques as the best way to collect rent.
The main problem with cheques is how long it takes to cash them. Not to mention, if the cheque doesn’t arrive, the rent can be substantially delayed – especially if your tenant sends ‘another’ cheque to cover it. It might be the easiest way to pay rent for the tenant, but it definitely isn’t for you, the landlord.
Advantages of payment by cheque:
No need for in-person collection – unlike cash, they can be posted
No set-up required – tenants write the cheques each month
Disadvantages of payment by cheque:
Clearing time – it could be three to five days before the money is available after you pay it into your account
Visiting the bank – you have to go to the bank to deposit the cheque, which can be a hassle
Less reliable – if your tenant posts you the cheque, there is the possible excuse that it got lost in the mail if they are short that month and can’t pay the full amount
4. Tenants Paying Rent In Cash
Cash payments in the private rental sector are certainly not as popular as they were two or three decades ago. Then, many landlords considered cash the best way to collect rent, but that traditional method is just too much trouble now. For instance, it means going around the property to collect the rent every month.
That’s a chunk of time out of your life – especially if you live outside of London and your rented property is a long drive away in Ilford, East London. What if you had more than one property?
Advantages of payment by cash:
Immediacy – you don’t have to wait for cash to clear
Traditional beliefs – some tenants’ traditions mean they’re more comfortable using cash than a bank account
Disadvantages of payment by cash:
No records – a major drawback to tenants paying rent in cash is that you have no transaction record
Extra admin – if you accept cash payments, you must produce a receipt each time and then diligently record it in a ledger, for your self-assessment accounts.
Impractical – you could rack up significant petrol costs to get there and back, and for landlords who live abroad, having tenants paying rent in cash is impossible
Tenant availability – what happens if you and the tenants aren’t available at the same time to hand over the cash?
Security risk – you risk attracting the attention of muggers
Getting Tenants To Pay Rent On Time
The best way to collect rent on time is to use an agency that collects rent on behalf of private landlords. Rent collection agencies allow landlords to be a step removed from the process and stress.
Tenants are less likely to miss a rent payment if they are paying a company rather than a private individual. Rent collection companies often partner with credit scoring data providers, like Experian. Tenants who pay on time are rewarded by improving their credit score, and late payers are deterred because they know they will be marked down if they miss a payment (just like homeowners with their mortgage).
Rent Collection Service Providers
Open Rent is a company that collects tenants’ rent on landlords’ behalf. It costs landlords £10 a month to activate, and the funds are passed directly to you. You’ll receive statements and notifications when a rent payment is received. Better still, the company will also chase up late payments for you – so you don’t even need to know about them.
Another rent collection company is Rent Collection. They provide their service for £20 per collection and offer a free tenant screening. You can be paid in 1 working day, all without having any awkward conversations or the hassle of chasing non-payment of rent.
Rent collection software and apps
Several innovative, automated rent collection services are currently available with downloadable apps, and more are being developed and updated on what feels like a monthly basis. These are mostly run by Pro-Tech companies and aim to make the landlord’s life as easy as possible, so they’re becoming increasingly popular. These are some of the apps currently available for landlords in the UK:
Pay Rent– One online rent collection and property management tool is Pay Rent, which seeks to foster a positive relationship between landlords and tenants. The platform features include Document e-Sign and automated late fees. There is an app that both landlords and tenants can use, and the fees range from £20 to £55, depending on which level you choose.
GoCardless – This app aims to eliminate late rent payments by taking direct debit payments from the tenant’s account, with added features like alerts if the DD is cancelled. It also integrates with popular accounting systems and provides real time payment status. The fee is charged as 1% of rent plus 20p, so this app is usually more cost effective for property rents at the lower range.
LettsPay – Streamlining your paperwork is the big selling point of LettsPay, which combines accounting and banking on the same portal, and lets you track a tenant’s payment history to monitor arrears. It supports Making Tax Digital compliance and there is a fixed fee depending on the specific property, with a 50% discount for Propertymark members.
Landlord Studio – Landlord Studio targets landlords who are managing the property yourself, with maintenance tracking and communication tools, as well as handling payments and record keeping. Landlord Studio offers three tiers, including a fee version (but MTD tax submission has a fee), Pro for £12 per month and Pro Plus for £24 per month, which is suited to landlords with larger property portfolios.
Goodlord– This service focuses on letting you collect rent payments and pay contractors from the same account, while creating audit trail to make bookkeeping easier. It can also facilitate deposit collection and sends automated reminders and follow-ups to tenants. The monthly fee is based on the number of solutions that you choose.
LandlordVision– The LandlordVision platform includes features such as rent collection, document management, compliance tracking and comprehensive financial management with a user-friendly dashboard. Landlords with one to four tenancies often choose the Starter plan which starts from £7.99 per month, while there are also options for medium sized portfolios up to 10 tenancies (£29.97 per month) and larger portfolios up to 15 tenancies (39.97 per month).
If you’re a landlord, then they are certainly worth looking at. With so many choices available, you’re likely to find the best way to collect rent online through one of them.
What to Do As A Landlord If Your Tenant Misses A Rent Payment
No landlord wants to face unpaid rent, but there are actions you can take. Take the initiative by including all the right clauses in the tenancy agreement, and track rental payments to catch any problems early. If your tenants miss a payment, try to resolve things amicably (it could be a one-time problem that’s easily remedied, for instance).
But you can take further action if they still don’t pay. Read our guide for the full details on what to do if your tenant misses a rental payment.
If the outstanding payments aren’t forthcoming after all your efforts, you may need to evict the tenant. Be aware that evictions can absorb your time and money, and there are strict legal processes to follow.
Are There Changes To Rent Collection Rules Under The Renters’ Rights Act?
Yes, there are some key changes to rent collection rules under the Renters’ Rights Act, including that landlords will not be allowed to collect rent in advance.
Another significant change impacting rent is that there will be a more lenient approach to arrears. The threshold for mandatory eviction under Section 8 increases from two months to three months’ rent arrears and the notice required before a possession claim increases from two weeks to four weeks.
Rent collection FAQs
Can An Agent Collect Rent On Your Behalf?
Yes, many landlords choose to work with a letting agent for rent collection only or for full management services. This removes the hassle of contacting the tenant over missed payments and agents can also support all the compliance requirements associated to the tenancy. At Sandra Davidson we provide a range of letting services including rent collection, tenant screening and managing maintenance and certification.
Do I need to give tenants a receipt when they pay rent?
You’re not legally required to provide a receipt for rent paid by bank transfer, standing order or direct debit, because the transaction is automatically recorded by both banks.
However, if you accept cash payments, you should always issue a written receipt — it protects both you and the tenant in the event of a dispute, and you’ll need the records for your Self Assessment tax return. It’s good practice to include the date, amount, property address, and the period the payment covers.
Can I charge tenants a late payment fee if they miss the rent due date?
Under the Tenant Fees Act 2019, landlords in England can charge interest on overdue rent, but only after the payment is more than 14 days late. The maximum rate you can charge is 3% above the Bank of England base rate on the outstanding amount. You cannot charge a flat penalty or administration fee for late payment — any clause in a tenancy agreement that tries to impose one is unenforceable.
What happens to rent collection if my buy-to-let mortgage lender requires payments on a specific date?
Your mortgage payment date and your tenant’s rent due date don’t have to match, but aligning them can help with cash flow.
Most landlords set the rent due date a few days before their mortgage payment leaves their account, giving time for the funds to clear. If there’s a gap between the two dates, it’s worth keeping a buffer in your account to cover the mortgage in case of a short delay — lenders will charge you for missed payments regardless of whether your tenant has paid.
Should I set up a separate bank account for collecting rent?
There’s no legal obligation to use a separate bank account, but most experienced landlords recommend it. A dedicated account makes it far easier to track income and expenses for your tax return, identify late payments at a glance, and demonstrate a clear financial trail if HMRC queries your records.
If you own multiple rental properties, some landlords go a step further and use one account per property, though a single dedicated lettings account is usually sufficient for smaller portfolios.
Can Universal Credit housing payments be paid directly to the landlord instead of the tenant?
Yes, in certain circumstances. Under the Alternative Payment Arrangement (APA) system, the housing element of Universal Credit can be paid directly to the landlord if the tenant is in at least two months’ rent arrears, or if the DWP considers the tenant vulnerable or unlikely to manage their own payments.
Either the landlord or the tenant can request a managed payment to the landlord through the tenant’s Universal Credit journal or by contacting the Jobcentre. Processing the switch typically takes a few weeks, so it’s worth acting quickly if arrears begin to build.
And Finally
Do you have any questions about rent payment, or renting out your property in East Ham, Wanstead, Silvertown, Gidea Park or the surrounding areas?
Renting out property can be complex, so don’t hesitate to reach out and benefit from our expertise. If you want to discuss collecting rent or ask about becoming a landlord in London, call Sandra Davidson.
I began as a junior apprentice in a corporate estate agents in 2006 have been working in the property sector since, so over 14 years of experience. I have worked in a range of industries from Property sales and lettings, to construction, development, commercial sales and lets as well as facilities management and maintenance. I have a degree in Economics, enjoy keeping fit and healthy, support Man Utd and have a young family.
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