As a landlord, there are very few things that are more important than to collect rent on time. Any rental business’s main goal is to collect rent, and doing so in a timely manner ensures optimal cash flow management and the best possible return on your investment.
On the other hand, having to chase your tenants for rent costs you precious time, adds avoidable stress to your life, and could ultimately cost you money.
So how can you ensure that rent is always paid on time? There are a few crucial steps that every landlord should take.
Make Sure Your Tenants are Qualified
Investing time in getting to know your future renters is extremely important. Having qualified tenants is the most important factor in ensuring timely rent payment.
With the rise of technological screening tools, it is now easier than ever to run comprehensive tenant screening even for DIY landlords. However, while running a thorough background and credit check is a must, landlords shouldn’t stop there to make sure potential tenants are qualified.
Taking extra measures like contacting past and current employers and landlords could provide insights into your applicants’ level of responsibility and history as a renter.
If you deem your future renter to be a person of integrity, you will have little additional work to make sure you get paid on time. To be safe though, there are a few additional steps all landlords should take.
Make it Very Clear When it Comes to Rent Payments
Relying on your renters to figure things out every month is not a good idea. Giving them clear rent payment instructions will simplify the process for them and significantly improve the chances of timely payment.
Outlining important details such as the monthly rent amount, due date, and preferred method of payment in one place for your renters to see will eliminate all doubt and will help ensure you collect rent on time.
Doing this in an email could work, but a much better alternative is to collect rent online using solid property management software that will generate detailed monthly rent payments for your renters to act on.
Let Your Renters Pay How They Want
Asking your renters to drop off cash, mail a check, or stand in line at the bank to deposit money into your account in today’s world is like asking them to go down to the post office to pay their utility bills.
This old-school approach doesn’t fit the expectations and behaviors of most tenants, and the more time and effort required, the lower the likelihood of it happening on time.
Letting your tenants pay rent online will remove a monthly burden from their hearts. Telling them they can use an app for free might even cause them to look forward to paying rent!
Using Zuby to collect rent online is free, secure, and has many other benefits for landlords. One of these landlord benefits is a particularly good motivator for paying rent on time – automatic late fees.
Automatic Late Fees
Nobody likes late fees, and anytime we could avoid them we would. Rent late fees are no different, and if your tenants think you are serious about collecting the late rent fees they would be more likely to pay rent on time.
The concept of late rent fees is simple – if rent isn’t paid in full by a certain date, usually the end of the Grace Period in the lease agreement, then an agreed upon late fee as stated in the rental lease agreement will be applied to the rent.
The main issues in collecting late fees without an online tool are timing uncertainties and human nature. What if, for example, the rent check actually was lost in the mail? Then, whether it was late or lost, you might give your tenants a pass because you feel bad or don’t want to make things awkward.
A property management app solves all of these issues by making it abundantly clear if rent was paid on time, and by automatically, and unapologetically, applying late fees.
Being able to collect rent on time is manageable when using the right tools and communicating with your renters ahead of time.