As a Raleigh property owner, you naturally expect to receive rent from your tenants at the turn of each month without fail. It can be frustrating if, at the end of each month, a lessee consistently fails to pay when the rent is due. Not only is it a waste of your precious time and money but discommoding if you have other time-specific obligations such as repaying the mortgage. But how can a landlord ensure that he or she receives the payment on time? Here are a few practical solutions.
Choose your tenants carefully
At times, getting your renters to pay promptly is a struggle because you have occupants who either cannot afford the property or have a poor record of meeting financial obligations. Many rental property owners nevertheless, often find themselves in such a predicament simply because they were too eager to fill the vacancy, that they took in the first person who showed interest. Experienced investors, however, are cognizant of this fact. Consequently, they subject every potential tenant through a rigorous screening process to ascertain whether they have a stable income, can afford to pay the rent, and have an outstanding rent paying record. Be kind to yourself by also doing the same.
Have a distinct, defined rent policy
To avoid getting into endless squabbles over payment with your tenant, establish clear rent guidelines by which the renter must pledge to abide. But make sure your rules do not violate you state laws. Some of the issues you must address include the exact rent amount, the due date, the grace period if any, where to pay, the acceptable payment methods, as well as consequences of late payments, non-payments and returned checks. Since you wish to make these rules binding, it is prudent for you to incorporate them into the lease agreement which includes other important aspects such as scheduled maintenance checks. Moreover, get time to go over those terms with your tenants to ensure that they understand and agree with your expectations on rent.
Provide convenient rent paying solutions
Another way to help you collect on time is by making it easy for your clients to pay. Whichever payment solution you adopt, make sure it is practical, secure and appropriate to you and your residents. Luckily, there are plenty of such options from which you can pick. For starters, you could adopt electronic or automated payment methods such as PayPal, Direct deposits, as well as automatic cash transfers. Besides making it easy for the tenants to pay, these solutions eliminate the possibility of the customer conveniently forgetting to pay the rent when it is due, as the amount will automatically deduct from his or her bank account.
Avoid cash and part payments
Refrain from taking cash or partial payments from your renters, as they are hard to keep track of, and involves a lot of record keeping. Instead, insist that all payments must be through non-cash means and in full. Nevertheless, if for one reason or another a tenant cannot pay the full amount, yet he or she used to pay promptly before, it will be reasonable if you accepted the partial payment and asked him or her to put in place a practical plan of action for offsetting the difference.
Give incentive for on-time payments
People love recognition, and they will readily repeat an action that got them incentivized in the first place. Put this knowledge to your advantage by recognizing and giving incentives to those tenants who are always punctual with their payments. For instance, you could discount the rent for renters who pay ahead of time or have set up automated payments. Also, you can offer shopping vouchers, gift baskets, concert tickets and much more. Such a move will reinforce your tenant’s desire to pay promptly.
Remind the renters that the pay is due
If you client has a habit of making late payments, you can counter that by sending him or her reminders a couple of days before the payment becomes due. The notification could be in the form of a phone call, email, or text message. Alternatively, you could create a group of all your tenants on internet based platforms like WhatsApp, Google, or Facebook, from which you can schedule automated rent payment reminders.
Confront the tenants who default
If your renter fails to submit their rent promptly, make time and inquire from him or her what might have occasioned it. It could be that he or she is going through some financial challenges, or they might be withholding the pay deliberately to get you to address particular concerns. Whatever the reason, find it out. Once you know the cause, ascertain by when, how much, and what means the tenant intends to pay. One of the key advantages of working with property managers is that they handle these tough conversation but if you don’t, you need to do it yourself.
Make the consequences of default clear
At times there is no better deterrent for late payments than reminding your tenants of what will happen if they do not pay their rent promptly. For instance, make them aware that you will not hesitate to enforce late fees, report the defaulting tenant to leading credit reference bureaus, or even apply for an eviction order.
Evict the person
In as much as you would want your house occupied, it makes no sense to host a non-paying resident. After all, you are in business. If you have tried all means but the tenant still doesn’t adhere to your rent payment rules, it is best to get rid of such a person and welcome a deserving high-quality renter.
Employing the above tips will help you have a relatively easy time when collecting rent from your tenants. However, for you to succeed, you must firmly implement them.