Rent collection can be costly and administratively heavy for landlords when it's not done correctly. It involves extensive financial tracking, emails to chase tenants, and bank queries. There is an easier way to handle it.
Read on to discover some of the strategies used by top property management teams and landlords. These streamlined approaches to rent collection will save you time and hassle.
Be Flexible About Payment Options
Tenants will want the payment option that offers them convenience. For most, that will be a bank transfer or tenant payment systems, which take minutes to complete and are easy to track.
However, these rent payment solutions are often preferred by a tech-savvy demographic and may not suit everyone. If you have a tenant who asks for alternative payment methods, be as flexible as possible.
Have Clear Policies
It's easy for a tenant to claim they didn't pay the rent on time because they thought it was due on a different date. You can avoid situations like that by being clear about your rent policies and communicating them clearly.
Ensure tenants read the payment policies carefully before they sign the lease.
Send Reminders
Sometimes, tenants simply forget to pay the rent. This frustrates landlords and costs them time and money to chase down tenants.
A simple reminder via an app, email, or text message can cut down on the number of late payments, so it's worth getting this type of automation set up for your properties.
Offer Incentives for On-Time Payment
You could give your tenants an incentive to pay the rent on time each month. For example, you could offer a discount on one month's rent each year if they pay on time every month.
Be Consistent With Late Payment Fees
Your lease will have a section covering what happens if the tenant is late paying their rent, and it's likely to include a fee as a penalty. Tenants often know about this but may assume it won't happen.
You must be fair but consistent about applying fees for late payments, especially if you have tenants who are repeatedly late with their rent. Let tenants know by email or text that you'll be charging that fee and why.
Keep Communicating With Tenants
Maintain an excellent relationship with tenants and communicate with them regularly. Building trust with your tenants makes it easier to resolve payment issues.
Your tenant will also feel obliged to stay on top of duties such as timely payment. Remember that trust is built in many ways, such as ensuring you respond quickly to any maintenance request from your tenant.
Rent Collection: Making It Work for Your Investment Portfolio
When you are in the midst of a busy month in your real estate business, you don't want to be sidetracked by chasing tenants for rent. Use these rent collection strategies to help streamline the process for you.
The best way to handle the day-to-day management of any rental is to get help from a professional property management team.
PMI Blue Ridge offers friendly property management services from a highly experienced team. Review our services here to discover how we can help you with your investments.
