Have delayed rent payments from your tenants become more of a rule than an exception lately? If you've noticed that late payments and even non-payment of rent have been increasing in frequency, then maybe it's time to reassess your approach to rent collection.
There are many tweaks and modern innovations the modern landlord can employ to increase timely rent collections. In this article, we'll discuss five tips for rent collection to help improve your cash flow. Please read on to learn more.
1. Screen Tenants Well
If you have the luxury of preparing your new strategies for new tenants, do not skip the tenant screening process. Screening for good tenants ensures you get financially responsible people who are also easy to work with.
Tenant screening is not a randomly pieced-together background check. You probe into critical parts of the tenant's history and finances to get the information you need. The laws that regulate the practice are also particular, so it's best to do this through a professional service.
2. Be Clear About Your Rent Price
Some landlords try to "soften the blow" by being vague about a rental price they think is too high. Avoiding this practice entirely and attaching a clear rental price for your lease agreement's duration is best. This decreases the chances of confusion and disputes.
3. Be Flexible With Rent Collection
A great way of encouraging timely rent collection is by accepting payment in as many ways as possible. If one tenant wants to do wire transfers and the next wants to hand cash over, let each of them do what they're comfortable with. You can even engage with a rent collection service that allows tenants to pay over an online portal.
4. Enforce Late-Payment Penalties
One of the best landlord tips is to put penalty clauses into a lease agreement and be serious about enforcing them. It's natural to want to extend grace to tenants in a bad spot, but these situations should be rare and have exceptional circumstances (i.e., emergencies) backing them up.
Start by outlining your penalty in the contract. In Washington State, you can charge the greater of $20 or up to 20% from the fifth day the rent is late. You can also use late notices and other correspondence to help enforce your policies.
5. Know Your Rights
Late rent also gives a landlord rights to other, more intrusive legal remedies, such as eviction, to solve the problem. Be sure to learn what these are so you can use them to encourage your tenants to pay on time.
Run Your Rental Business Like a Professional
Rent collection can sometimes turn into a headache for landlords, but it doesn't have to. Learn what your rights are as a landlord, including your right to screen tenants and to put late payment penalties into the lease agreement. Enforcing these policies property encourages tenants to pay on time.
Also, ensure that you're clear about your rental price and be prepared to accept payment in as many ways as possible. PMI Brewder Realty has vast expertise in good rental policy, enforcement, and all other elements of property management. If you need help collecting rent or with anything else, contact us today for premier property management assistance.
