6 Tips For Property Managers To Avoid Late Rent Payments
June 23, 2020
As a property manager, the ideal tenant is one who pays his/her rent on time and this applies to most. However, you are will likely come across a few delinquent tenants who, for one reason or the other, have no problem living for “free”. Although there is no perfect solution, below are a few suggestions that might help to deal with this issue when it does arise.
- Implement A Payment Reminder System – These reminders could be sent out about 3 or 4 days before the rent is due. It could be done via an email blast, phone call, or text messages. A day after the rent is due, the tenant/s should also be advised that their payment is now late if payment has not been received.
- Collecting Late Fees – The lease agreement signed between Landlord and Tenant should stipulate what the late charges are and/or how they are calculated. Most Landlords fail to enforce this even though they are within their rights to do so. Early enforcement of this clause may shock the tenant into paying on time.
- Use An Efficient Form Of Payment – Collecting rent by electronic means is the fastest and most efficient way. It saves time from having to go to the property to collect rent by cheque or cash. Of course, there may be some exceptions to this as not everyone is tech-savvy. For those tenants who are receiving Government support, ensure that arrangements are put in place from the beginning so that the funds go directly to the Landlord and not the tenant. Most Government agencies pay by direct deposit, if not by cheque.
- Maintain Open Communication – If you have a tenant that is habitually late then it may be time to have a conversation. It is always a good idea to have the channels of communication open with your tenants so that they feel comfortable coming to you when there is an issue. A tenant may be experiencing hardship due to late child support payments or maybe their salaries/wages are paid after the due date. These circumstances should be treated on a case by case basis. If the tenant has been reliable in the past and other interactions, then possibly some alternate arrangements can be made with respect to the due date.
- Effective Tenant Screening – Ensure that a comprehensive tenant screening is done before the lease is signed. Always ensure that your tenant provides a job letter/proof of income and the reference check should include both current and past employers as well as past Landlords. It is also a very good idea to have a credit report done as well. As much as possible, try and cover all your bases.
- Do Not Become Complacent – Do NOT become complacent when it comes to late payments or else this behavior may become the “norm”. Remember, the idea behind a rental property is to have a continuous stream of income. If your tenant(s) are consistently late then you may also fall behind in your financial obligations (ie. for example mortgage and utility payments). Even though you may be on friendly terms with your tenants, do not let them take advantage of you. Keep in mind that you are operating a business.
If rent collection starts becoming a hassle for you, then it may be time to consider hiring a Property Management Company such as ACCL. We have the expertise to implement effective payment systems and know-how to take corrective action when the need arises
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