Property investment is hot right now. Have you jumped on the trend and started your new secondary income stream?
While it might seem like passive income, being a landlord means taking on a lot of responsibilities. You have to handle tenant screening, drafting a lease, maintenance, and more. One responsibility that stresses out many new landlords is rent collection.
Rent collection is how you make your money, so you need to do it, but how should you go about it? Keep reading for our top landlord advice on how to collect rent.
Choose The Right Payment Method
In the old days, it was reasonable to accept payment through the mail or in-person exclusively. Tenants handed their checks to their landlords and the transaction was over.
In 2021, we suggest adding another method. While you should still allow those original methods for tenants who prefer cash and checks, most tenants prefer online payments.
Online payments also allow tenants to establish auto-pay so they never miss a payment. It also creates a clear history of payments that the tenant is able to view right away just in case there are any disagreements or problems in the future. Both you and your tenant have proof of payment.
Consistent Payment Schedules
You should always request rent on the first of the month. This makes it easy for tenants to remember so they're less likely to miss rent payments. It's also helpful when it comes to your own organization.
It's helpful if a tenant's tenancy starts on the first of the month, but if it doesn't, make sure that their rent payment is only for the amount of time that they were in the apartment.
Consider adding a grace period and a late fee to your payment schedule. Grace periods are often 3-5 days post-due date. During the grace period, the tenant will not accrue a late fee.
Have your late fee in writing in the lease agreement.
Disputes and Complications
Most landlords will have to handle disputes from time to time. As long as you know what to do ahead of time, you can fix the problem with ease.
If a tenant is late, or if they miss a rent payment, open up communication with them. Make sure that there's a "paper trail" for your communication. We suggest starting with a reminder email or note.
Most of the time, missing or late rent is an accident. Your tenant may also be struggling with financial issues. Establishing a payment plan is a better and easier solution than starting an eviction and finding new tenants.
If you must evict your tenant, make sure that you're abiding by all local regulations.
Hire a Management Company for Rent Collection
Does this all seem like a lot of work? Rent collection is challenging, but you don't have to do it alone. Why not hire a property management company to take some of the responsibilities off of your shoulders?
We want to help you. Contact us at Inheritance Realty Group so we can start managing your property today.