Education and news for smart DIY landlords!
It’s not uncommon for first-time landlords to make mistakes. One of the most important lessons that they learn (the hard way) is making sure that tenants pay rent on time. Even if you know your renters because they were recommended by a friend or family member, remember that late payments are detrimental to your business.
Last week, I heard a story of a landlord who was okay with late payments because his tenant was doing him a huge favor. In the beginning, the tenant was two weeks late with rent. Eventually, weeks turned into months.
If you want a profitable business, you need to safeguard your cash flow. While proper rent collection is basic, it’s often taken for granted. To spare yourself the trouble of receiving late payments, I’ve prepared 5 useful tips.
I shared about the things that your rental form should contain. Make sure you include rent collection in the form. Specifically, mention the rent amount each month, due date, and rent payment method. Once you have a rent collection policy in place, enforce it. Some tenants may pay late for the first time. It’s alright to let this go especially if there’s a good reason for it. Just be sure that there’ll be no second time around.
Communication is very important when it comes to rent payments. Never take this skill for granted. In fact, it’s better to over-communicate than to keep silent about the concerns you’ve been wanting to tackle with a tenant. If a tenant fails to pay on time, don’t hesitate to ask what’s happening and when they plan on actually paying you.
Thanks to technology, landlords can now leverage online rent payment solutions that automatically move payments from tenants to your bank. While rent payment tools such as payyourrent.com or clickplay.com charge fees, using these tools benefits you and your tenants in many ways:
You may find this unreasonable but yes, incentives do work in motivating tenants to be early with their payments. Nevertheless, you should remember that tenants must be responsible for fulfilling what is said in the lease agreement without being rewarded. If you’d like to give the strategy a try, effective incentives include discounts, gift vouchers, and property upgrades.
The best way to ensure timely rent payments is to enforce a proper screening process. What this means is that you should explore a potential tenant’s background. It would be great if you could call the person’s previous landlord and ask if he or she has a history of making late payments. Also, look at a tenant’s credit report since it’ll give you an idea how well the person meets his or her financial responsibilities.
As a landlord, handle things in a professional manner if tenants pay late. Be careful not to infringe on a tenant’s rights because you’re stressed about his or her behavior. You may need to consider giving the tenant a formal “pay or quit” notice. Pursue an eviction if payment still isn’t made on the date specified in the notice.
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Finally, I offer you the opportunity to take a complete DIY landlording course: Landlord Prep: Video E-Course and How-To Tutorials. Everything you need to know to become not just a landlord, but a successful landlord, is here.