By Tracey March
At the core, rental owners are in the rental business because they want rental income. If tenants don’t pay their rent, rental owners don’t get paid and they may have to initiate costly and time-consuming evictions.
Property management professionals know that the method used to collect and process monthly rent impacts whether tenants make on-time rent payments. A good rent collection and payment system should meet two requirements. First, it should make it easy for the property owner or manager to collect and track payments. Second, it should make it easy for your tenants to pay their rent. Many rental owners hire property managers because they don’t want to deal with rent collection. If you self-manage your rental home, here are three tips for making your payment system easy and efficient.
Collecting and tracking physical payments like rent checks or cash is a pain. Several web-based services, including APM parter Yapstone RentPayment.com, allow rental owners to collect rent payments online, over the phone, or via direct bank transfers, while keeping their checking account information private. Rent payments can be automated or paid around the clock for guaranteed on-time collection, and they can be paid using mobile phones. RentPayment.com even allows property managers and rental owners to input customized late fees and penalties so they are automatically tallied when appropriate, and to accept application fees and security deposits so leases can be closed without a wait.
2. Insist on receiving one payment for the full amount of rent.
When you have tenants who are roommates, have them choose one amongst them who will be responsible for collecting rent from the others and paying rent to you in one payment. This rent collection policy makes life easier for you because you only have to collect and track one rent payment. It also minimizes your involvement in your tenants’ personal financial situations. In addition, make sure that roommate tenants are jointly and severally liable for the rent, meaning that if one roommate doesn’t come up with his or her share, the others are responsible.
3. Review your rent collection policy with your tenants.
Have a formal, written rent collection policy. At move-in go over it with your tenants, have them sign it, and give them a copy. Consider offering incentives for on-time payment as well as penalties for late payments. Enforcing the policy consistently from the beginning of each tenancy sets a professional tone and lets tenants know your clear expectations about on-time rent payments.
Current landlords and property managers: do you have any rent collection tips?