If you ask any landlord, they will tell you that late rent payments cause them a lot of heartaches. In fact, of all the things a tenant can do to a landlord, the number one thing that frustrates them the most is being late with the rent. I, Mark Roemer, am no different. There is a way around this, however. By practicing flawless screening techniques and following the steps we are going to outline below, you will all but eliminate that headache in your life.
Sending reminders is not just something that you are going to do once. You are going to want to do this every month. The truth of the matter is, most tenants have the money, they forget to send it. We live in a different time. The number of things that are on the plates of your tenants is much more than it ever was in years passed. Between having to go to work and shuttling the kids around, things get overlooked. If the problem is not staring them directly in the face, most people will forget. Do you think it is any coincidence that companies that require a payment send payment reminders each month? You are no different than they are. There is a bill that needs paying and it is just as much your responsibility as it is the tenants to make sure you have your money on time.
Now, I am not suggesting that you send physical mail to each client. That can get expensive in the long run. One thing that will not get expensive is sending them an e-mail. Chances are, you got their e-mail when they applied for the apartment. Utilize this and make sure they know well in advance they have a payment due. Make sure that you highlight the date, so there is no confusion. There are many of these services that you can find online. I am not going to tell you which one to use. Each of them will be useful to different landlords. Larger companies use some of these services, and other services are meant to be used by people who are not so computer savvy. Just look around and see which one works best for you.
It doesn’t matter if the tenant is late one time or a dozen times; your response needs to be similar. You need to be direct with them. Being firm does not mean you are going to be rude. One way to sort things out is to ask them if there is a reason they are late on the rent. They may have been away on vacation, or a family member may have been in the hospital. Of course, this will be the first time they are late. As the number of times increases, you need to get to the root of the problem. Perhaps the date you have selected for rent to be due does not coincide with their paycheck. Discuss with the tenant a better day for their rent to be due. Just because you are moving a date does not mean that you are too lenient. If after the date rent is due gets moved, and they are still consistently late, it may be time to employ different consequences.
If you don’t already have a rental agreement outlining the repercussions for late rent, I highly suggest that you make this happen. Making changes is not something that you can do in the middle of a lease agreement. You will have to wait until the next lease to implement this. While you are waiting for the cycle to come around, you may want to consider the following courses of action.
Most landlords will tack on a $20 late fee to all late payments. Before you decide you want to do this, you will need to check the legality of said action. You may be limited to the amount of money you can charge a tenant for late fees. Additionally, you may not be able to charge them at all. This is not likely the case, but it is always best to make sure you are operating within the confines of the law. This will make things a lot easier when it comes time to evict them if that becomes necessary.
Additionally, if things get too bad, some municipalities will allow you to report them to creditors. Think of this as protecting others that may do business with your tenants. This is not a thing you want to do, but something that you must do. This should be one of the last things that you do. There is no need to ruin someone’s credit over one or two late payments. This is something you should reserve for your most extreme cases.
Traditionally, rent payments are made in one of three ways. The landlord will visit the tenant and request rent. At which point, the tenant is expected to pay immediately. The second way is the tenant bringing the payment to the landlord. The final method is the tenant mails the rent to the landlord. Any of these are entirely acceptable. However, we are living in a digital age. Many tenants are looking for a more neutral way to make payments. Since the rent does not change, they can quickly sign up for automatic payment. You should allow your tenants to do this. Simply put, you will no longer have to hear excuses as to why the rent is late.
Collecting rent is one of the least desirable things a landlord must face. With the suggestions and tips, I have provided you above, it should be a lot easier. Remember, when you make things easier for your tenants, it is really making things easier for yourself. If you can think of anything I missed, do not hesitate to add a comment or send me an e-mail. I am always looking for new and exciting ways to streamline the rental process.