A rent invoice is a document issued by the landlord as a record of a rental transaction/payment made by a tenant right after it has been received.
A rent invoice template ordinarily entails details such as landlord’s name, tenant’s name, rent amount, and payment due date. A rent invoice template can be prepared by the landlord or the property manager.
Importance of Rent Invoice
Rent invoices are used for all sorts of rentals – including residential, commercial, or equipment leasing. They are utilized as a communication tool between landlords and their tenants by breaking down what the tenant was charged for in the received payment. This way, landlords are able to ensure quality service delivery to their tenants and foster the landlord-tenant relationship by encouraging openness.
In some states such as Washington, landlords are required to issue rent invoices if a tenant pays in cash, and in Massachusetts, they are issued in any situation, respectively. Also, in some cities, issuance of rental receipts is mandatory, and therefore landlords and property managers are encouraged to consult applicable laws and the city’s local housing board to ensure compliance.
The organization is an important factor in effective property management. Filled-out rent invoice templates are essential documents for keeping track of payments received, and this way, one can determine which tenant(s) haven’t paid yet. Issuing a well-written rental invoice exhibits an elevated level of professionalism which consequently fosters the landlord’s reputation in the rental scene. Therefore, tenants can refer the property to friends and family because they trust the landlord or property manager due to his or her reliability.
Making a Rent Invoice Template
Crafting a rent invoice does not have to be a lengthy and time-consuming process; landlords and property managers can opt to use a rent invoice template which is an easy and fast way of coming up with an up to standard invoice. Rent invoice templates have the fundamental components of a rent invoice formally structured to serve the primary purposes of an invoice.
Below are steps landlords can follow when crafting a rent invoice template;
Rental billing information
First and foremost, a rent invoice template will have a section where the tenant(s) are supposed to fill out the rental billing information. This information is used to identify the sender and the recipient of the invoice.
The Billing information should be structured as follows;
- Bill from – The sender of the invoice is identified first. This will normally be the landlord. The landlord is identified by the following information: Landlord or Property Manager’s name, Company name with logo/website (if any), mailing address (Street address, City, State, Zip Code), and Telephone number.
- Bill to – Next, the recipient of the invoice should then be identified. This will be the tenant’s details. The following information can be used for identification; Primary Tenant’s name, Company name (if any), mailing (Street address, and the City, State, and the Zip Code), and Telephone Number. Also, landlords can include the invoice number, which is important for accurate recordkeeping. The billing date can also be included at this point.
Property and rent information
Then, the rent invoice template should address pertinent property and rent details. It is advisable first to identify the property being rented out. This is inclusive of information such as the property address, type of property (apartment, office, warehouse, condominium, etc.), and details such as apartment number. If equipment is being rented, it should be accurately described.
Next, the rent invoice template should outline the amount of money expected as rent and the due date (day/month/year). Details such as which month the payment is for (period of tenancy) can also be indicated by stating the first and final day of this period.
Afterward, there should be an itemized list of all the expenses the renter is expected to cover. This includes the monthly rent, utility expenses (water, internet, and cable TV), shared expenses, property taxes (if any), and such.
Any discounts awarded to the renter should also be declared, and an explanation should be included. Applicable late fees should also be declared in this section of the rent invoice template. Late fees are usually given as a percentage of the money owed or a fixed or predetermined fee.
If equipment is being rented, ensure to include applicable damage deposits. Once all bills have been outlined, the sum of all expenses should be written down.
Tip: If a tenant fails to make timely payments, landlords can always use reminder invoices pointing out the concern before resorting to other courses of action.
Specify convenient payment methods
After that, the rent invoice template should show the methods of payment one wishes to be compensated through as a landlord. It is advisable that landlords include more than one method of payment to increase the flexibility and convenience of payment to one’s tenants.
Below are some common methods used for receiving rent payments;
- Bank wire – If bank wire transfers are preferred, the landlord should provide the bank name, account number, account type, and any other information needed to make bank wire transfers.
- PayPal option – Where PayPal payments are preferred, information such as email linked to the landlord’s account necessary for receiving payments should be provided in the rent invoice template.
- Credit or debit card – For credit or debit card payments, ensure that the invoice prompts the tenant to provide the cardholder’s name, account number, CVV security number, expiration date, and the billing address linked to the card account.
Note that the landlord is not limited to these options; the rent invoice template can provide multiple methods for tenants to choose from.
Tip: Landlords can always insert a complimentary statement or appreciation declaration at the bottom of the rent invoice as a courtesy gesture and a way to affirm the tenant’s value to the landlord. A thank you statement would be sufficient.
It is up to the landlord to issue detailed payment instructions if at all they want to avoid inaccuracies and missed rent payments. Payment details should be simple and concise.
Save the invoice
Lastly, one should opt to save the rent invoice template. As earlier mentioned, the invoice is used for tracking one’s income. Depending on the method the landlord intends to send the invoice, there are different formats to save it in – PDF, Google Docs, Word, Excel, etc. This way, one is left with a copy of the invoice even after sending it. Rent invoices can be sent via email or delivery of printed invoices to the tenant’s door or by mail. Printer-friendly invoices are convenient regardless of the method of delivery to be used.
Choose a suitable type of template
With different formats of rent invoice templates available, choosing the most suitable template becomes key in fast pacing the process of creating a rent invoice. There is a template for most types of rentals, ensure to choose a suitable one. Also, consider convenience in issuing them to tenants – most tenants prefer being invoiced electronically.
As much as it is recommended that the tone of a rent invoice be personal in order to avoid damaging the landlord-tenant relationship, a rent invoice template should be professionally crafted.
Invoices can be used for official tasks such as filing taxes and hence the need for them to be formally formatted.
A rent invoice can be personalized by considering the following;
- Custom logo – Landlords can add logos to their invoices to give them a more professional outlook. This is especially in cases where the landlord is an entity such as a real estate agency. Added logos must, however, be professional graphics; otherwise, the contrary would be achieved.
- Purchase order number – Including the purchase order number is another option for customizing a rent invoice template. This way, organizing and referring to the invoices becomes easier if such a need arises in the future.
- Watermarks – Rent invoice templates can be watermarked with the name of the company or landlord. This is an effective way of differentiating invoices for one property and those of another property owned and managed by the same landlord and property manager, respectively.
Free Rent Invoice Templates
Following are some free downloadable rent invoice templates for your ease;
For a completed rent invoice template to effectively serve its purposes, there are certain aspects that the issuer must put into consideration.
Below are essential considerations to take into account before and while crafting a rent invoice template;
Consider the right time
Timing is important when issuing a rent invoice to tenants. Landlords are advised to issue the completed rent invoice template a few weeks before the rent due date. This way, tenants have adequate time to reconcile funds to cover the quoted amount – this is more prevalent in long-term leases. Short-term leases such as vacation rentals, event-space, or equipment leasing landlords will usually ask for the full or part of the payment upfront before issuing the invoice.
Add sufficient details
A rent invoice should be as detailed as possible and necessary. As much as it is important to keep it simple, details are necessary, especially when describing the payment breakdown. Tenants will always appreciate an invoice that represents a high level of openness.
Tip: As much as details are important, do not provide unnecessary details that are unrelated to the tenancy and even more so the payment due or paid. The objective is to ensure that the renter clearly understands every expense billed to them.
Include a payment due date
The rent invoice template should always have a clearly declared due date – regardless of the type of rental. Having a payment due date ensures landlords have a constant flow of income and, therefore, can budget their finances and plan.
Sometimes rent payment will be late for one reason or the other. Landlords should not hesitate or be shy to follow up. Sometimes, a delay might be justified, and instead of making premature conclusions, reaching out to tenants might resolve the issue. Follow-ups are essential in maintaining a healthy landlord-tenant relationship. Remember to be friendly and polite when following up payment; it signifies professionalism.