Collecting and receiving rent is the cornerstone of investing in rental properties. For some Landlords, collecting rent is not difficult and for others it can be a nightmare.
It is very important to be consistent from the beginning of the Lease. Start out by explaining to your Tenants in detail, the terms of payment in the Lease and any consequences for late payment.
It is a good practice to send rent reminders, before rent is late.
Precedent must be set from the beginning as soon as a Tenant fails to pay rent on time. Once you start accepting excuses, you have lost footing. It gives the Tenants the assumption that it is ok to pay the rent late because they had a problem. The next time they have a situation or issue, they will believe that you will be understanding once again. This sets the tone for a frequently late rent payer or worst an eventual legal matter.
Keep all communication in written or email form to avoid the “he said, she said” scenario. Send a letter out as soon as rent becomes late, the very first day after any grace period specified in your Lease. Include the late charge if there is one and do not make “deals.” As soon as you negotiate with your Tenant on late rent or late charges or fees, they tend not to take a Landlord seriously and may try to push things farther.
It is a good idea to send a sequence of notices. You can get online a set of such notices to make this easier for the Landlord. Mark on a calendar when you will send these notices out, if need be.
Check with your local jurisdiction to find out the regulations for eviction. Each state, county and/or jurisdiction may institute requirements for how many days may pass before legal proceedings can be brought against the Tenant. There may be certain notices required such as a “Notice to Quit,” before you may even file in a local court. If after several attempts are made to collect the past due rent, follow your jurisdiction rules as soon as possible. Eviction can be a lengthy battle, especially in larger cities.
Property Management Best Practices
Be sure and remember it is important from the beginning of the Landlord/Tenant relationship to set an example in your collection efforts. Do not get emotionally involved. Keep it business, after all you invested in order to make money not lose money.
Starting off with a good Lease is essential and having the necessary documents and notices can be just as important. Having a good system and series of different Leases, Notices and Tenant Documents is important for all Landlords in ensuring proper and timely rent collection.