One of the most important and challenging tasks of being a landlord is rent collection. The whole point of owning rental property is for the monthly income, so if your tenant isn’t paying, then your investment isn’t working the way you hoped.
There are some common issues that arise when collecting rent. The good news is that you can avoid many of them by taking precautionary steps before the issues arise.
Try these tips for making rent collection easier for your rental properties.
Don’t Accept Partial Payments
A partial payment is when you allow your tenant to pay you a portion of the full amount owed for the month. There are several issues with accepting payments that aren’t the full monthly rent price.
The first is that it takes the importance and urgency off of the tenant to get you full payment. It also lets your tenant know that rent collection by the deadline isn’t a priority.
Avoid getting stuck in a partial payment cycle by requiring all payments in full by the due date.
Accept Online Payments
With an online payment portal, you no longer have to hear the excuse that payment is “lost in the mail”. Payments can be automatic and are processed faster. This makes payment easier for the tenant, and therefore, more likely that they’ll do it.
Charge a Late Fee
While it’s acceptable to allow for a grace period, you should charge a late fee for payments that aren’t made on time. This reinforces to the tenant that they must make payments on time, or there are consequences.
To avoid late payments, impose a late fee when payments are a few days late. Be sure to outline the terms of your late fee in the lease.
Send Written Notices
As the landlord, you’re required to send a written notice to the tenant letting them know to either pay in full or leave. This is the first step in the eviction process and must be taken if you hope to move forward with removing tenants that refuse to pay.
In the letter, you need to outline how much the tenant owes and how long they have to pay it. Once that time elapses, you can then file an eviction lawsuit. You’ll submit your letter as evidence to convince the court to rule in your favor.
Report Tenant Payment History
As a landlord, you can report late payments to the credit bureaus. For desirable tenants that pay on time, this is great news. Your regular reporting will help boost their credit score.
However, for less than desirable tenants, this can be used as leverage to convince them to pay. It can also help you avoid less than desirable tenants who don’t want you reporting. They’ll choose to not rent with you.
Hire a Property Management Company
Instead of trying to collect rent and manage your rental properties on your own, you can hire a property management company. They have the systems in place that can make rent collection a smooth process. Tenants log onto their online portal, and then you receive payment from the management company.
Your property management team can also help you with tenant screening. You can avoid almost all rent collection issues by simply having the right tenant to rent your property. A property management firm can help you screen applications and choose the most desirable of renters.
Let Us Manage Your Property
If you find yourself struggling with rent collection, then it’s time to try these tips. You can get started by hiring us to help you manage the property. Our team will perform a rent analysis and help you price your property to attract the ideal tenants.
We’ll then take care of the monthly rent collection. Should your tenant fail to pay, we’ll handle the entire eviction process for you.
Contact our team today and let us help you successfully collect rent for your properties.