5 Tips for Collecting Rent on Time
Do you have a hard time collecting rent from your tenants each month? We understand how frustrating late payments can be, so we’re giving you 5 tips for collecting rent on time and handling tenants who have trouble paying.
How to Collect Rent on Time
Set Up Automatic Payments
Having tenants pay via auto-pay is one of the best ways to collect rent in a timely manner and eliminate the human error of “forgetting” to pay. There are several ways to set up automatic payments, including:
- Online Bill Pay
Most banks offer a bill pay feature. Ask your tenant to set up their rent payment as a recurring bill. You’ll receive a check automatically each month. Although this option offers several benefits, there are a few downsides. Not only do you have to go out of your way to deposit the check, it’s possible for the payment to get lost in the mail.
- ACH Bill Payment
If your tenant doesn’t want to set up online bill pay, see if they’d be willing to use an ACH (automatic clearing house) to withdraw money from their bank account each month. All you need for authorization is your tenant’s signature on a document that clarifies the amount of money and the specific recurring dates.
Give Incentives for On Time Payments
For tenants who pay on time each month, consider giving small discounts or gift vouchers. Not only will your tenants be more willing to pay on time, but they’ll value and appreciate you more as a landlord.
Find Quality Tenants
Having a strong screening process will help you find quality tenants who pay on time. Your screening process should consist of a credit check, background check, job verification, and income verification. Look for a history of paying rent on time with past landlords and enough income to pay rent, utilities, additional bills, and personal expenses.
Have a No Cash Policy
Accepting cash as a form of payment is a bad idea on a few different levels. Not only is carrying around that much cash dangerous, it’s also difficult to track and report. In addition, it’s easily lost. Eliminate these risks by establishing a policy that clearly states that you do not accept cash as a payment for rent.
Enforce Consequences for Late Payments
As a landlord, you must be prepared to deal with tenants who are past-due. Inform your tenant that late payments will be reported to major credit agencies. We recommend including a statement in your lease agreement that outlines the consequences of late payments. That way, it won’t come as a surprise to your tenant.
If you have more questions about how to collect rent on time for your rental property in (city keyword), contact the experts at Real Property Management. Our goal is to help you reach your financial goals.