The last thing you want to deal with as a landlord is late-paying tenants. No landlord in Gwinnett wants to have to chase down their tenants each month, asking them to pay what’s due. The foolproof way to handle late rent payments is to do your best at preventing it from happening in the first place. How is this possible, though? Encourage your tenants to pay on time by incorporating these property management strategies that boost good payment habits.
Screen Tenants First
The best thing you can do to try and prevent your tenants from paying their rent late is to screen them before they sign a lease. A thorough tenant screening usually includes a background and credit check, income statements or pay slips, and interviewing references such as previous landlords. These will all give you a better idea of whether or not the tenant is a good fit for you. When speaking to a prospective tenant’s previous landlord, ask if they had any issues collecting rent from them, or any other issues. When reviewing the tenant’s finances and income, ensure they aren’t spending more than 30% of their paycheck on the rent. If it’s more, it could cause potential problems down the line.
Clearly Communicate Your Expectations
You must assert your authority while still maintaining your friendliness with tenants. You can achieve this by clearly communicating your expectations. While your lease agreement should state all of your expectations, your tenants may understand them better if told in person. So, when they first move in, let them know the rules of living there, including when rent is due. It’s of the utmost importance to be clear and concise when giving information about when and how you would like the rent to be paid each month. You can reiterate your expectations in an email so your tenants can refer back to it over the course of their lease if need be.
Offer Multiple Payment Options
Make paying rent as convenient as possible for everyone. Online Bill Pay is how a majority of payments are made by the world but be sure to have other forms of payment options available to your tenants as well. It proves versatility but also creates a no-excuses baseline because there is no excuse for inaccessible rent paying. Although checks, cash, and money orders may add an extra step on the business side, it makes all forms of payment available and accessible for every single one of your tenants. No excuses!
Make It Easy to Pay
A little flexibility can go a long way in encouraging tenants to pay on time. Many will prefer online or automated methods of payment, so check with your bank or payment providers to understand the options. Requiring cumbersome methods of payment (ex: only cash, only money orders) can slow the rent payment process for tenants who have a difficult time getting to the bank or grocery store in time. While multiple options are a good thing, some electronic payment methods give tenants control over when payments are deducted. The point of automated payments is for the landlord to receive the money at a predetermined time, without any extra steps.
Not only does staying consistent prevent problems with late rent payments, it helps to preserve your reputation as a rental property owner and as always, will help you defend your actions should you end up in a legal battle with a tenant over late payments, late fees, or even non-payment of rent. As an owner/investor/ property manager, it is crucial to have records of when and how much your tenants paid their rent to you. This information is detrimental to completing the bookkeeping for your business. So, no matter what payment method you require, ensure you are keeping track!
Communicate with your Tenants
If the same tenants are consistently paying their rent late every month, try to reach out to them and figure out what is going on, and what needs to change. Although rent due dates are not flexible, a simple conversation could make all parties feel better regarding late rent payments. There are many factors that are affected by late rent payments; monthly rent payments fund a lot of behind-the-scenes work. By openly communicating with the tenant, this gives an idea of what headspace the tenant is at, when the rent will be paid, or what steps, as the property manager or owner, needs to take next if rent is not paid within a reasonable amount of time. Everyone needs to be on the same page. By building relationships with your residents, you create an environment where hopefully, tenants will not lie about their financial situations.
Enforce a Late Fee
It is a common courtesy to give your tenants a grace period. Usually, landlords will allow four or five days after the first of the month (or whenever the rent is due) for some leniency. However, you should enforce a late fee on your late-paying tenants after this grace period ends. Reminding them of the accruing late fees might be enough to get them to hop on it and pay their rent!
You can also send your tenants friendly reminders that their rent is due a few days beforehand. This can be in the form of a text or email; calls aren’t necessary. This could be seen as passive-aggressive by some tenants, so you may want to ask them if they would appreciate a reminder each month when they first move in. Some people are aware that they could use the help and are appreciative, some people need the help and don’t want to admit it!
Managing a property is not an easy task, especially successfully collecting rent on time every month. Every owner/ property manager has a wide spread of tenants who pay early, on time, and late. No matter how thorough your tenant screening is, some residents look great on paper but can surprise you. With that being said, it is almost impossible to prevent late payments, but you can do everything in your power to control them. By keeping multiple payment options available, and making your financial expectations understood by tenants, rent control should be just a tad bit easier for you!
The information in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.
If you are looking to move into Gwinnett County, contact us today and we will find the perfect rental for you! If you own a home in Gwinnett County and would like to rent it out and have us manage your property, reach out to us and we will be glad to assist you during this process!
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