May 15, 2018
Tardy Tenants: How to Handle Tenants who Pay Late Rent
It’s unfortunate, but it’s a truth of rental-market life: Some tenants will miss their rent due date.
Late rent payments can be one of the biggest headaches for property managers, who wind up spending valuable time and energy chasing down delinquent residents. It’s a waste of valuable resources, and the trickle-down effect has a negative impact on overall company cash flow.
So how to handle tenants who pay late rent? Here are five tips:
- Communicate, Communicate, Communicate
Be completely clear with your tenants about when rent is due. And make sure you outline any fees or penalties for paying late. Don’t leave anything open to misinterpretation. For tenants who consistently miss the due date, go the extra distance to discuss why they aren’t making rent payments on time. Some tenants may prefer paying smaller installments on a more frequent basis, rather than handing over one large monthly sum. If you can accommodate an alternate payment plan that works for you and your resident, it’s a win-win solution. The important thing is to keep the communication lines open – while being firm about your rent requirements.
- Say “No” to Cheques
The days of dropping off cheques at the office are long gone. Let your tenants pay with what they use on a regular basis: their debit or credit cards. Providing multiple payment options ensures that your customers can choose their preferred payment method. And when tenants start paying via debit or credit card, you instantly reduce the costs associated with late rent payment. These alternative methods improve “speed to bank” and make sure rent is paid on the due date.
- Automate Reminders
For repeat offenders, it helps to send automatic reminders, through phone dialers, SMS text or email. Give tenants a friendly heads up a few days before rent is due; you might be surprised at how often this eliminates delinquent payments. If residents still fall short of the rent due date, you can send a series of automatic reminders with escalating urgency.
- Enforce Late Payment Penalties
Late fees are applied for tardy service payments, so why should rental payments be any different? As long as your province permits it, consider implementing a small late fee. These penalties go a long way toward reducing late payments. And in cases where tenants continue to miss the due date, you wind up with another revenue stream.
- Offer Incentives
Although late fees can be very effective, some local rent control laws prohibit them. If that’s the case where you operate your business, try offering a discount to those who pay promptly. This usually has the same end result as late fees: encouraging timely rent payment.
How We Help
Property Vista can help you implement systems and processes to minimize late payments and manage tenants who continue to miss their rent due date. We have the tools you need to automate everything from messages and reminders, to bills and balance letters. And our online resources make it easy to offer tenants multiple payment options, including debit or credit card, so they can pay on time, using their preferred method. To learn more, get a demo today.