December 07, 2017
How to Reduce Rent Delinquencies, Easily & Effectively
One of the biggest frustrations for landlords, and property management companies, is tenants who do not pay their rent on time. Sometimes residents simply don’t have the cash in the bank on the due date, and other times the overdue payment is caused by simple forgetfulness.
Unfortunately, late payments take a big bit out of cash flow, and instantly increase costs through increased administration costs and cheque-chasing.
Here are five easy and effective ways to significantly reduce rent delinquencies.
Give Renters Choices, But Move Away from Cheques
People love convenience. By giving your renters numerous ways to pay their rent, you can not only make it much easier for them, but you can instantly reduce late payments. Encourage payment by credit card or debit. These options quicken the time of payment to bank, but also ensure that the rent comes out of their account on the day it is due.
Send A Friendly Reminder
For people who are habitually late, set up a reminder through automatic phone dialers, SMS text or email to offer a gentle remind that rent is due in a few days. A friendly reminder can go a long way in curbing delinquent payments. For those that miss the due date, set up a series of reminders with elevated urgency.
Implement Late Payment Penalties
When you are late in paying any bill, late fees will be applied. It should be no different for rental payments. (If you live in a state or province where this is not possible, skip to the next section.) A small late fee has a two-pronged approach for property professionals: first and foremost, it can really reduce delinquencies, and secondly, there is no an additional revenue stream where it did not exist previously. With tools like Property Vista, it’s a snap to send notifications such as small balance letters.
Sweeten the Pot
While adding a late fee as a preventative measure is a good idea, it’s not always possible depending on local rules and regulations. For example, in a province or state that has rent control laws, it may be illegal to add a late payment fee. With Property Vista you can set up a prompt payment discount instead, which often has the same net result.
Ensure There’s No Reason to Withhold Rent
If small (or large!) repairs slip through the cracks, tenants will sometimes withhold rent until that leaky faucet has been repaired. (Check with your local laws to see if this is legal.) Regardless, the old adage ‘an ounce of prevention is worth a pound of cure’ is applicable here. Keep your tenants happy. In doing so, they’ll be more inclined to pay their rent on time.
How We Help
While landlords need to tread a careful line between understanding and firmness, it is in everyone’s best interest to work toward the tenant getting caught up in their payments as quickly as possible.
At Property Vista, we can help you implement the systems and processes to minimize late payments, ensure a clear audit trail and improve renter satisfaction with issues like maintenance requests. To learn more about how we can help you mitigate the consequences of bad tenants and protect your bottom line, sign up for your free account today.