How to Collect Rent on Time, Every Month

Posted by Teresa on May 21, 2010 under Landlord Tips, Rents and Deposits | icon: commentBe the First to Comment

iStock_000002872280XSmall1-208x300Every landlord we know would agree with this understatement: rent is important. Actually, it’s more than just important—rent is like a fertilizer that keeps your rental business growing and healthy. Rent is as necessary to your rental property business as rain is to plants.

If only collecting rent was as easy as collecting the rain when it falls from the sky. Rent collecting can be an easy task—or it can be a monthly struggle. It all depends on how you set up your leases, your management skills, expectations, and consequences.

Lease Language: Make sure your lease clearly states the amount of the rent, the day of the month rent is due, any grace period, late fees and when they are added, and number of days until eviction action is taken for non-payment.

Terms of Acceptance: Let multi-roommate units know that you do not accept multiple checks—you don’t want the hassle of chasing down several tenants for rent. Let your tenants figure out who owes whom how much, and collect one check from someone. Also, it’s best to avoid accepting partial payments. Evictions for non-payment are difficult to obtain if you’ve accepted a payment!

Manage the process: It’s up to you to determine how things are going to run in your rental property business. After all, nobody else is taking on the responsibility and liability of owning rental property. So manage your business like the boss that you are. Keep excellent records, establish procedures, and stick to them. Let your tenants know that you don’t waive late fees, and that you will file for eviction if they don’t pay within an agreed-upon time frame.

Expectations and consequences: If you’re managing your rental property well, your tenants know exactly what is expected for rent: they are to pay you on the day the rent is due, not later; they are to pay with one check; they are not to bounce checks; and they are to notify you if any of the previous terms are impossible, due to circumstances beyond their control.

It’s your job to clearly communicate your expectations to every tenant. Let them know up front the consequences for not meeting your expectations, too. Not every tenant has been asked to strictly keep to the terms of a lease. Let your tenants know that you expect them to, and they will be more likely to do so.

More and more landlords are turning to online rent collection. It’s a convenience for you and for your tenants. There are many services to choose from, so ask your friends in the business if they’ve had good experiences with online rent collection. It certainly eliminates the need to make runs to your post office box and the bank, as well as a tenant blaming the U.S. Postal Service for late rent checks!