Even the best tenants may be late with rent from time to time, due to financial or personal issues that are temporary. As a landlord, it’s important that your rent comes in on time consistently every month so you can meet your own financial responsibilities. Charging a late fee is one way to deter tenants from paying late, but there are other important considerations.
Today, we’re providing three tips for handling and preventing late rent payments.
Create and Enforce a Consistent Rent Collection Policy
Your lease agreement should outline your process for collecting rent and include information on any late fees or other consequences that will be the result of late payments. Make sure your lease agreement and rent collection policy clearly state:
- The amount of rent due per month.
- When rent is due, and when to pay if the due date is on a weekend or holiday.
- Method for paying rent (mail, online, etc.).
- When rent is considered late, and whether tenants have a grace period.
- Consequences of late payment including late fees and termination of tenancy.
Once you have your rent collection policy in place, make sure you enforce it. If you waive a late fee the first time a tenant pays late, you may find that you get delinquent payments going forward. Make it clear that you expect rent to be paid on time every month.
Provide Multiple Ways to Pay
If a tenant has flexibility in the way he or she may pay rent, you’re more likely to get that rent paid on time. Many property management companies have online portals, which accept online rent payments and allow tenants to schedule their payments in advance. This can be extremely helpful and increases the chances that rent will be paid on time.
While you might not have an online portal of your own, you can still offer electronic payments to your tenants. They might prefer to transfer funds using an app or online banking service rather than writing out a check. Accept cash if that’s the only way your tenants want to pay. If you’re flexible, your tenants will respond by paying on time.
Maintaining Positive and Transparent Communication
Create and maintain open communication with tenants if they are paying rent late. Some tenants pay late because their payday comes after the rental due date. If a tenant knows that rent is going to be late one month, having that information before the due date can be helpful. You won’t waste your time chasing down the tenant, and you can follow up and make sure rent is paid when the tenant said it would be paid.
You don’t want tenants to avoid you when rent is late; that only creates more work and frustration. A good landlord/tenant relationship will increase on-time rental payments and create a positive rental experience for everyone.
Late rent payments can be inconvenient and time-consuming. If you have an action plan to deal with this common problem, you’ll find that collecting rent is less stressful.
We’d love to share more tips with you, so please contact us at McCaw Property Management.