Collecting rent on time is an important part of being an effective landlord. When you approve a tenant and meet to discuss and sign the lease agreement, make sure you go over the expectations for rent collection. Your tenant needs to know how much rent is due every month and how they should pay it.
At CMC Realty, we provide an online portal for our tenants to pay rent online. We have found that this increases on-time rental payments and provides a convenient, secure, and hassle-free way for our residents to pay their rent every month.
Follow these tips for a better chance of on-time rent collection.
Provide Several Ways to Pay
Tenants need flexibility, and today’s tenants are tech-savvy. While it might be difficult for an individual landlord to provide the online payment system that a property management company can provide, you can still find a way to enable your tenants to pay rent electronically. Collect rent via PayPal, Apple Wallet, Zelle, or any number of other online payment systems. Many tenants will find this preferable to writing out a check every month.
In addition to electronic payments, offer other ways to pay. Perhaps your tenants can pay you in-person or send a check or money order through the mail. Some tenants might prefer to pay in cash. This might be difficult for you to document, but if you’re able to provide receipts and log the income into your own accounting system, it’s a good idea to provide as much flexibility as possible to your tenants when it comes to rental payments.
It’s important that tenants know what you’ll accept. If you don’t want to accept cash, be clear about that from the beginning, and offer some alternatives. If you’re not able to provide online payments, make sure your tenants know what will work and how they can get their payments in on time and even automatically. Work together so everyone’s needs are met.
Be Consistent with Late Fees
Show your tenants that you’re serious about on-time rental payments. If your lease agreement provides for a grace period, honor that. You should also enforce any late fees or other consequences that are in your lease agreement. If you accept rent late one or two months without charging your late fee, you’re starting a dangerous precedent. Collect your late fees and give the tenants an incentive to pay rent on time.
Keep the Lines of Communication Open
Even great tenants may fall into financial trouble now and then. Make sure that you have a good relationship in place with your tenants so they’re comfortable coming to you when they know rent will be late. It’s much better to be informed than surprised. If a tenant calls you a few days before rent is due to explain why it will be late, put a payment plan in place that includes your late fees. Be understanding, but also hold the tenant accountable. This is better than having to chase your tenants down five or 10 days after the rental due date.
If you have any questions about rent collection or anything pertaining to Long Beach property management, please contact us at CMC Realty. We’d love to help.