As a landlord, collecting rent is your top priority. You want to get the most out of your property investment, and that means that on-time payments are essential.
But how do you go about rent collection in an efficient way for both you and your tenants? We're here to talk about it.
Read on for a few quick landlord tips about rent collection.
Have a Rent Collection Policy
Having a rent collection policy in your lease, and discussing it with your tenants before they move in, is going to make everyone's lives easier. It's a great way to make sure that you and your tenants are on the same page.
So what should go into this policy?
Make sure that you detail what day you'll be collecting rent, when tenants are first able to make rent payments, and the grace period for late payments. Make sure that you have all of this in writing so you and your tenants can refer back to it.
We recommend always collecting rent on the first of the month to make it easier for everyone involved.
It's also helpful to list consequences for nonpayment so that tenants are prepared for what might happen. Listing consequences can be a helpful deterrent.
The Best Rent Collection Method
If you're relying on paper checks or cash for rent collection, it's time to make a change. Checks are almost obsolete, and many people no longer carry cash if they don't have to. By requiring payments this way, you're making it more difficult for tenants to pay on time.
We recommend allowing several potential payment methods so you can suit as many tenants as possible.
Older tenants may still want to use paper checks. It's helpful to have a mail-in or in-person delivery option for those tenants.
Most tenants, however, prefer paying rent through an online tenant payment portal. This is the most efficient rent collection method.
Tenant payment portals can remind tenants when rent is due and they provide an easy place for tenants to pay with their bank account or credit card. They can even set up automatic rent payments so they never forget.
What to Do When a Tenant Doesn't Pay
So what happens if a tenant doesn't pay on time?
First, if it's within the grace period, let it go. The grace period exists for a reason. If there are multiple late payments that are still within the grace period, consider reaching out to the tenant to see if there's a problem.
If it's outside of the grace period, go by the consequences on your lease and reach out to the tenant. It's possible that the tenant forgot or that they're dealing with financial hardship. It might be in your best interest to set up a payment plan.
Worst-case scenario, you may have to deal with eviction. This should be a last resort.
Collecting Rent Is Simple
Rent collection is the most important part of being a property investor. This quick guide should set you up for success! Remember: have everything in writing, use multiple payment methods (but focus on a tenant portal), and be prepared for late (or nonexistent) payments.
Are you looking for help with rent collection and other tasks? Let our experienced property managers help you! Contact us so we can start working together today.