Rent collection is the one thing every landlord looks forward to. After a grueling month, you cannot wait for your tenants to pay their rent so that you can settle the property's bills and pay yourself.
However, collecting rent isn't always a walk in the park for most landlords. From having tenants who don't pay rent on time to dealing with bad or bounced rental checks, there are several hurdles you can encounter in the process.
You owe it to yourself to make rent collection more convenient. Read on for a few dos and don'ts you should observe.
Do Have a Firm Rent Payment Policy
Rent is due on the first day of every month, but don't assume your renters know this. Even if they do, they might not be incentivized to make the payment if you haven't asked them to do so by that date.
Having a firm rent payment policy in the rental lease agreement helps make sure tenants pay rent on time. The policy should include the consequences for not paying rent on or before the due date, such as a fine.
Do Automate Rent Collection
Federal Reserve Bank of Boston research shows that personal checks (42%) and cash (22%) are the preferred ways for tenants to pay rent.
At a time when financial technology has advanced so much, it's hard to believe that rent collection hasn't gone digital. Well, that doesn't mean you stick to the old ways. If most of your tenants belong to the younger generations, offering digital rent payment methods will not only lighten your work but also make it more convenient for tenants to pay.
When you automate rent collection, you don't have to visit your rental property to collect rental checks or cash from your tenants physically.
Don't Accept Partial Payments
Understandably, any tenant can run into financial difficulty and struggle to pay rent on time. Such a tenant can make an effort and make partial payments.
As a landlord, you might show them some leniency and accept the payments, hoping they'll get their financial ducks in a row soon. However, accepting partial payments sets precedence, and the tenant can make it a habit. Plus, accepting partial payments can complicate an eviction process should the matter get there.
Don't Ignore the Law
There are state and local landlord-tenant laws that touch on rent collection. For example, in Virginia, rent payments are considered late if unpaid by the fifth day of the month. As such, landlords cannot impose an earlier date as the deadline for paying rent.
Violating any of the relevant laws will land you in trouble. A tenant can sue you, for instance.
Rent Collection Shouldn't Be a Headache
Rent collection is an easy job, but it can be a source of many sleepless nights if you don't know how to go about it. The steadiness of your rental income depends on how efficient your collection strategy is.
These dos and don'ts will help you improve your processes, but why worry about it when you can hire a professional to do it? A rental property management company like Renters Warehouse can take all the pain out of the process.
We've been in business for over 10 years and have licensed professionals on our team. Reach out to us to schedule a consultation.
