How to Encourage On Time Rent
Getting rent paid on time is great for your pocketbook as you have your own bills to pay. As a landlord, you want to prevent tenants from paying rent late. If a tenant pays rent late, and you let it go, they’ll know they can do it again and again. For this reason, it’s important to have rental payment guidelines put in place to deal with late rent payments before they happen.
Continuous late payments are a problem and many landlords feel that eviction is their only option. This should be used as a last resort, however. Instead of jumping to eviction, which takes both time and money, try some different methods we have outlined here.
Make it Easy to Pay Rent
To avoid rent being late, make it easy for your tenants to pay rent. If they have to go down to the local convenience store and get a money order to mail out to you, chances are your rent may be late more than once. Instead of making it complicated for your tenants to pay rent, use one easy method, such as automatic rent payments. Alternatively, allow your tenant to transfer rent directly into your account. This avoids late mail and other reasons your rent could show up late.
Choose Your Tenants Carefully
If you want your rent paid on time, choose your tenants very carefully. To start to tenant screening process contact any past landlords to ask if rent was paid on time. If it was, chances are they’ll keep up this habit. If not, move on to the next rental application. You’ll also want to verify income, which means you’ll have to reach out to employers. This is well worth the effort to determine whether the applicant can afford the rent every month. The rule of thumb to go by is they should be earning three times the amount of the rent. Checking credit scores and payment history is another way to weed out potential late rent payers.
Charge a Late Fee
Make sure your tenant knows upfront that you will charge them a late fee for any late rent payments. This will act as a deterrent to late payments. Don’t defer the late fee for any excuses. Instead, be firm and stick with the late fee every time the rent is late. No matter what kind of teary story your tenant gives, don’t give in. If you do, chances are they will know they can get away with paying late rent. By charging a late fee, you provide a consistency that your tenants can expect every month.
Report Rent Payments to a Credit Check Bureau
Credit check bureaus provide landlords with this all important service. You can report both on time and late payments to a credit check bureau. It’s important to let your tenants know you are doing this beforehand. Most tenants will want to avoid late rent payments when they know it will adversely affect their credit score. It’s best to put this in writing in your lease agreement and be sure your tenant has a signed copy.
Have you thought about offering an incentive for on-time rent payments? For example, you could offer $10 or more off the rent if the tenant pays before the due date. You could also offer a percentage off the rent if the tenant pays on time for six consecutive months. These types of incentives really work and are a win-win situation for both the landlord and the tenant.
Talk about Late Payments
When a tenant is late with the rent, find out why. This investigation will help avoid late rent payments in the future. Your tenant may have simply forgotten to pay the rent. It slipped their mind. If this is the case, you can start sending out rent payment reminders before they are due. The reason could be as simple as they ran out of checks and are waiting for their order to come in. Whatever the reason for the late rent payment, there will be a solution. You just need to find out what is causing the late payments and go from there.
When Nothing Works
When you’ve tried everything and your rent is still continuously late, you may want to choose to evict. This will require that you follow a set of eviction procedure requirements. This depends upon the type of terms agreed to in the lease, as well as the state you live in.
The Bottom Line
Whether you have one property or twelve, getting your rent paid on time is important for staying on top of your finances. Using the tips outlined above can help you to encourage your tenants to pay on time each and every month. Charging a late fee, offering positive incentives, and reporting payments to a credit check bureau are just some ways you can get your tenants to pay their rent on time.