Collecting rent on time is important to the integrity of your lease agreement and also to your own financial stability. When we’re talking to new, and even experienced, investors about our best landlord advice, we always discuss the importance of a good rent collection policy.
When tenants understand your expectations and you consistently follow your own policy, you’ll find you have an easier time collecting rent when it’s due. Providing a number of different options for tenants to pay can also increase the chances that rent will be paid on time.
Here are some good considerations for new investors who are worried about rent collection.
Establish and Enforce a Rent Collection Policy
Make sure your tenants understand your expectations when it comes to rent collection.
Discuss your rent collection policy before your tenant pays the security deposit and signs the lease. In your lease agreement, include clear instructions about how much rent is due, when it is due, and what the consequences will be if it’s paid late. Include any information about grace periods and late fees. Make sure tenants know that eviction is always a possibility if they don’t pay rent when it’s due.
Provide Various Rental Payment Options
Online rental payments can really impact your ability to collect rent on time. That’s because most tenants today expect to be able to pay rent online. They don’t like the hassle of mailing a check or dropping off a payment to you in person.
When you make it easy for them to pay rent, they’re more likely to pay on time. Options are important. Some tenants will want to pay with a debit or credit card. Others will want to seamlessly transfer funds from their bank account to yours.
Most Roseville property management companies offer tenants and clients an online portal. This allows tenants to pay rent online, set up recurring rental payments, and identify the cards or accounts that are to be charged. It increases the likelihood that rent will be paid on time, and provides the documentation we need for your accounting and bookkeeping.
While the majority of tenants prefer online rent payments, not every tenant will want to do that. So, provide additional options. You should still be prepared to accept checks or money orders. Some tenants may want to pay in cash. While accepting that much money may not be safe, there are programs where tenants can pay in cash at retailers such as 7-11. The store accepts the cash and the money is deposited into your account.
What to Do When Rent is Late
If rent is late, communicate with your tenant as soon as possible. There’s always a chance the tenant simply forgot.
When you’re unable to reach your tenant or the rent still doesn’t show up, you’ll want to move quickly to begin the eviction process. We think eviction is always a last resort, and we recommend you continue trying to work with your tenant. However, be prepared to evict because the entire process will likely take longer than you expect and you want to mitigate the risk of losing more rental income.
When you cannot collect rent or motivate your tenants to cooperate with you, serve a Notice to Pay or Quit. Then, talk to an attorney so you can move forward with an unlawful detainer action.
We can help you with rent collection and anything else pertaining to Roseville property management. For additional landlord advice, contact our team at Action Properties.