If you’re a landlord, there are many reasons to keep careful records of your income and expenses. One of the most obvious is taxation, but another is to keep relevant documentation of your property. If you cannot produce documentation for expenses incurred or advances given to tenants, these obligations will be your responsibility.
This situation can be avoided by setting up a rent receipt template for all transactions involving rent payments. The receipt is prepared every time the tenant meets the rent payment obligation.
While states typically have different guidelines on handling rent receipts, issuing receipts is considered a standard practice in leasing current and previous tenants upon request, as applicable by state. Therefore, always consult your state’s landlord-tenant laws because failure to follow applicable laws may result in fines if the tenant files a case.
However, with a receipt, everything is accounted for, and no one can make false claims about what happened with the money in question. You can also collect the rent even if you issue a receipt for a returned or bounced check. This is because, with a signed rental agreement in place, the tenant is legally required to uphold the agreement’s provisions. Most states require landlords to issue receipts at no charge to current tenants in the US. Also, they can issue the receipts to previous tenants if requested within one year after move-out.
This article will guide landlords on effectively utilizing a rent receipt for their venture.
What is a Rent Receipt?
A rent receipt is a slip issued to a tenant after the landlord receives rent payment either in cash or credit card form. The receipt serves as official proof that the transaction has taken place, the amount of money involved, property details, and the person responsible for the transaction. The document can be issued at the time or within a few days, and the landlord must sign it. Rent receipts can be used for both residential (such as penthouses and apartments) and commercial properties (such as warehouses and offices). Also, they are applicable in different types of leases, from month-to-month leases to standard fixed-term leases.
The alternative names of a rent receipt are:
- Rental receipt
- Rent paid receipt
- Rental invoice
- Rent payment receipt
- Renter’s receipt
- Receipt for rent payment
- Proof of rent payment
Benefits of Using Rent Receipts
At its core, the rent receipt records money transactions between landlord and tenant. There are many benefits to utilizing a receipt as a landlord.
Rent receipts are an excellent way to verify whether tenants have paid the rent. This is because the rent receipts record the time when the payments were made, by whom, and the amount. In addition, the receipt can be vital for cash payments where there is no other paper trail.
Renters are awarded certain tax credits due in some states. However, if they do not produce proof of rent payment, they cannot claim that expense as tax-deductible. Issuing your tenants with receipts allows them to file this tax credit.
Receipts are also used to raise credit scores. In addition, they can be used to prove the revenue generated from renting, which can prove your creditworthiness to creditors.
You can use receipts to determine the suitability of a tenant. For example, the information on a rent receipt can be used to check whether your tenant has been making regular payments or not. If they are not, it may indicate that they may default on the lease at some point.
Receipts ensure credible evidence of payments made between the landlord and the tenant. This way, the receipt can be referenced if there are any issues regarding rental payments, such as missed, late, or partial payments. In addition, when they know that the receipts are maintained and compared, any discrepancies become apparent, and thus disputes can be efficiently resolved.
Rent receipts display a level of professionalism from the landlord. This can impress tenants and improve their trust and loyalty.
In states where a rent receipt is mandatory, issuing one becomes a compliance practice.
Issuing receipts is a way of being organized when managing rental units. It ensures there is the documentation for all payments, cash payments included.
How to Fill Out a Rent Receipt?
A rental receipt template is a simple slip that records different information regarding rent payments. While each receipt can be different for different rental spaces, the essential items of a rent receipt are as follows:
Each rent receipt is different. It should contain information that can help with referencing in the future for the first section. This section should include the following:
Payment date: The receipt should be dated. The date should clearly show when the payment was made by indicating the day, month, and year. This is to keep track of whether a tenant meets the due date.
Receipt number: Each receipt should have a unique identifying number, the receipt number at the top. The receipt number should match your filing system, and receipts must be issued in sequence.
The following section should outline details regarding the payment. This section will capture different types of information, including the following:
Tenant’s name: This section should include information that can help identify the tenant who has made the payment. Therefore, it is required to capture the name of the person who made the payment. Ideally, this will be the name of the tenant.
Payment amount: The amount the tenant has paid because of rental payments should be captured in this section. This includes all the payments made at any time. It should be written to show the amount in numerals and words.
Payment method: The method used by a tenant to make the payments should be recorded. The following are payment methods, cash, check, money order, bank deposit, credit card payments, etc.
Rental address: Having the rent receipt capture details of the property is considered good practice. This section should capture details such as the physical address of the property. Additional details, including the unit number, street number, or name, can be recorded.
Rental period: The rental period the payments are meant to cover should be indicated in the receipt. The time represents the days, weeks, or months for renting the unit to the specific tenant. In addition, it should indicate the start and last date of this period.
Remaining balance (if any): The amount of outstanding rent from the payments made should be recorded. This indicates the difference between the total paid and the total owed.
Late fees (if applicable]: The number of late payment fees that have been charged to the tenant should be recorded in this section. The amount will depend on the rental agreement which has been agreed upon. This is to indicate what rent would be charged for the rental period and days or weeks that have elapsed after the due date.
To authenticate that the rent receipt template is an accurate transaction record, the landlord or recipient of the payment has to attest. The following information should thus be supplied to ensure the receipt holds weight as an official document.
Landlord’s name: The person who has received the rent should be recorded. Ideally, it should be the name of the landlord. However, landlords can appoint someone to collect payments, e.g., an agent. This information ensures that it is clear that whoever has received the payment is authorized to do so.
Contact number: The landlord’s contact details should be provided in the receipt. Typically, this section will record the landlord’s mailing address and phone number. This information is meant to facilitate correspondence between the landlord and the tenant.
Signature: Lastly, the receipt should be signed by the landlord. The signature acknowledges that the landlord ascertains that the information provided in the document is true and accurate. Once signed, the landlord should keep the document and send a copy to the tenant.
On __________ (date), _______________________ (tenant name)
paid $________________________ in:
G CHECK NO. __________________________________
G MONEY ORDER NO. __________________________________
for rent on _________________________ (address). The tenant still owes $ __________ (balance due after payment).
Money Received By: __________________________ (Landlord signature) __________________________ (print name)
Free Receipt Templates
Templates reduce the workload and time used in preparing the receipt. Our readers can download such templates from our site for free. In addition, the templates are reusable and easy to modify to suit the requirements of each transaction.
Rent Receipt Book Vs. Rent Receipt Template
A rent receipt book is a collection of blank receipts that can be filled whenever payments are made. All the receipts are similar and contain the same items. The receipt book is advantageous because it can be purchased from most retailers and is thus easily accessible. Also, it is affordable and doesn’t require technical know-how or the internet to use the book. However, it has specific cons. For example, you cannot customize the receipts as they are already printed. Also, if lost, you lose all the rent receipts records, and it can be not easy to organize without plucking the individual receipts.
In contrast, a rent receipt template is a fillable form that contains all the essential sections of a standard rent receipt. Templates have the following advantages; they’re easy to customize, update and reuse, making them ideal for different transactions. Also, they can be saved online, making them less bulky than receipt books. Additionally, multiple users can access them online, making templates convenient when a landlord wants to appoint an agent to collect payments. The downside of using templates is users require technical know-how and the internet to access them. Also, purchasing rent receipt software comes at a cost. Due to technical conversion issues, it may be difficult to transition or upgrade to another software.
Do’s and Don’ts of Providing Rent Receipts to the Tenants
The dos and don’ts of using rent receipt templates to keep records of payment transactions include:
The do’s include:
- Ensure to follow the state’s landlord-tenant guidelines and provide the document when and how it is directed.
- Use templates to ensure all the relevant information is captured.
- Store the receipts in a safe place as the documents are a vital record for renting.
The don’ts include:
- Do not leave out the signature when issuing the receipt. An official stamp can also be included.
- Avoid issuing rent receipts before payments have been received.
- Do not omit the outstanding rental balance. The record should show the balance. This is vital for periodic payments.
Frequently Asked Questions
Does a landlord need to provide rent receipts?
The rules regarding rent payment receipt issuance differ from state to state. For example, landlords are obligated to issue receipts for cash payments ONLY in Texas, Washington, and Maryland. However, in Alabama, there are no statutes guiding this process, and in Massachusetts, all landlords must provide receipts to their tenants.
Do rent receipts need to be signed?
The receipt should be signed by the person who receives the payment. This can be the landlord or any other appointed authority like an agent or property manager.
Should landlords keep copies of rent receipts?
It is recommended that landlords should keep a copy of the rent receipt even though it is not a legal requirement. This ensures a copy for reference should payment issues arise in the future.