Ways For Landlords To Collect Rent On-time And Reduce Late Payments…
Collecting rent on time is the driving factor behind becoming a landlord. It’s also the one topic that’s often overlooked… how to collect rent. Establishing the “how” is almost as important as the “how much,” and your collection policy should be something you agree upon with your tenant before they sign the lease. Make it a priority to start collecting payments on time. Depending on our position that might be collecting rent payments or collecting HOA dues. Establishing your collection policy will help you get paid on time and remove any potential confusion, so here are a few ideas on how to collect rent.
Create a Payment Reminder System
As a general rule of thumb remind folks 3 days before a payment is due. The day after the payment is due send a message telling them their payment is now late. There are several web tools that will create an email blast to do this.
Increase Communication With Late Payers
Reach out directly to a routinely late resident. Try to find a reason that prevents that person from paying on time. If there is a reason like his pay date is a week after the rent due date. In a circumstance like that, you may propose an agreement to change his due date to meet his timeline.
Start Collecting Late Fees
Many HOA lease agreements state there are last fees. Most landlords, property managers, and HOA’s are lenient when it comes to enforcing these fees. Start charging your late fee. Late fees may come as a shock to some but can be exactly what is needed to get people to realize they must pay by the proper date. Be sure to implement late fee policies and notify your residents. Be sure to document all communication with residents regarding late fees.
Enable Electronic Payment and Make Them Automatic
Software that allows residents to make payments online is the best way to collect rent. In this day and age, we are all busy. Being able to leverage electronic payment will make it easier for you and your residents. There may some who will always want to pay by check just tell them the check must arrive at your office on the due date. So mail in advance of the due date.
Improve Your Resident Screening Process
- Request an Application
- Run a Credit Check
- Run a Background Check
- Contact Previous Landlords
- Contact the Resident’s Employer
- Interview the Resident
Hire a Property Manager
A property manager is a person/company who manages your property for you. They collect rent, deal with issues, screen applicants, schedule maintenance, manage leases, and even handle evictions if necessary. This is terrific – but it comes with a cost. You have to determine if the benefits of hiring a property manager outweigh the expense.
Accept Payments Through an ACH Debit.
If the resident agrees, setting up an ACH debit will take only a few minutes, and they can even set up automatic payments so they don’t have to worry about paying rent every month. You would receive an automatic payment. However, your bank may charge a fee for this type of payment.
Do Not Excuse the Behavior
Be strict about collecting late payments. A few days late can turn into weeks late. No matter how friendly you become with your resident treat the rental as a business. Late payment can be a detriment to your bottom line.
Having a property management company handling your rentals will help you to live a more enjoyable life. You’ll have less stress, more free time, and essentially more freedom.
Contact us (866-500-6200) for more information today!
About Real Property Management Midwest
We are local property management experts serving Cincinnati, Dayton, Columbus, & Louisville. We manage Single-Family Homes, Apartment Buildings, and Condos. With years of experience, Real Property Management is Cincinnati, Dayton, Columbus, Louisville and Northern Kentucky’s #1 Property Management and Leasing Company.