January 22, 2019
7 Tactics to Collect Rent and Get Paid on Time
Every landlord and property manager knows that on-time rent is a critical for cash flow. Money can’t go out, if it’s not coming in. In a perfect world, every renter would pay on the date that the rent is due. But that’s not always the case. Even good tenants miss the odd payment. Usually, though, it is the same tenant or two that has trouble paying on time.
Here are some tactics to get all your residents paying their rent on time.
Set Clear Expectations
One of the best ways to start out on the right foot with a tenant is to be very clear about when rent is due, and what happens if it is not paid on time. From Day 1, walk your tenant through the lease, and note the date rent is due every month, and any fees that are charged if the rent is not paid on time. It’s not a bad idea to ask the tenant to initial this section of the lease, so it is unmistakable that they have been advised to your terms and understand this condition of the lease.
If you’re still asking for checks, you’re asking for trouble. People want to pay their rent the way they pay many of their bills – to have it come out of their account automatically. If you use an online payment system, your tenants can set up their rent to come off their credit card or bank account at the same time every month. It reduces the chances of forgetting and makes it easier for everyone.
Stop Accepting Cash
Don’t accept partial or full rent payments in cash. Just don’t. There’s no paper trail, so it’s hard to trace. It can get lost or stolen. And, quite simply, it’s not professional.
Talk to Them
If your renter hasn’t paid their rent, have a conversation with them. Find out what is going on. Was it a case of simply forgetting? Have they recently lost their job but have a lead on a new one? Perhaps changing the date the rent is due to align with their paycheck might be helpful, or change the payment method. For example, switch from cheques to an automatic payment that comes off their credit card. If they have been a previously good tenant, but are going through a hard time, perhaps you might be able to downsize them to a smaller and more affordable unit. Whatever the case may be, ascertain when and how they will make a payment.
Set Up Escalating Reminders
With some tenants, it’s a matter of changing laissez faire behaviors. Some people are a little too laid back when it comes to paying rent on time. One way to prevent this behavior is to start sending reminders 7 days before rent is due. You can also send follow-up reminders, if rent is not paid on time.
Do What You Say You Are Going to Do
Does your lease outline that the tenant will be charged a late fee after five or seven days? Then do it. In the case of a good tenant who has fallen on hard times, you may want to be lenient. However, when a tenant is late more than once, they need to know that rent needs to come first and be paid on time. It’s up to you to make sure your tenants are aware of the terms of their lease and for you to also follow through on your policies.
Reward Good Behavior
With proper screening and background checks, hopefully you won’t have too many incidents of late payments. One of the best ways to ensure good cash flow is to retain your “besties” – the tenants that pay on time and respect your property. It’s worth it to send them a gift certificate or small gift as a token of your appreciation. It could make the difference between staying or going.
If you need help with tools to help improve communication and encourage online payment, consider Property Vista’s online rent payment system. It makes it easy for your tenants to simply pay online or setup regular scheduled payments. See our online rent payment system and check out our pricing.