In any random meeting of landlords, one topic will not escape their discussions: rent collection. Listen keenly and you'll inevitably conclude that a good number of landlords are struggling to collect what's owed to them from their tenants.
One of the allures of investing in a rental property is the promise of a steady passive income. However, this promise can become elusive if you don't implement an elaborate rent collection strategy. From missed rent payments to bouncing checks, you'll find yourself dealing with all sorts of challenges.
To help you ensure you're getting paid on time, we're sharing a few tips for solving some of the most common challenges around rent payment and collection.
Vet Your Tenants
Non-payment of rent is a common issue among landlords. While anybody can face financial challenges and fall behind on rent, some tenants simply don't pay rent on time to punish the landlord.
You can prevent this challenge by keeping such tenants off your property. And you don't have to wait until you need to evict. You can prevent them from becoming your tenants in the first place by screening all your rental applicants.
When you check an applicant's credit history and verify their income, you'll be in a stronger position to identify those who have a shaky financial background and are therefore likely to default on rent.
Checking their rental history or asking for landlord references can also get you valuable information about a renter's record.
Draw Up a Clear Rent Payment Policy
Tenants know that they must pay rent to continue living in a rental property, even if they have certain eviction protections. However, don't bank on your tenant paying rent because they're expected to. Without a clear rent payment policy baked into the lease agreement, expect to run into all sorts of obstacles when trying to collect the rent.
Your rent payment policy should outline the following key details:
- Deadline for paying rent -usually rent is due on the 1st of every month
- Grace period - Although Georgia laws don't obligate landlords to have a grace period, it's advisable to have one, usually up to five days after the deadline
- Late fees
- Security deposit deductions
- Damaged property costs
- Rent payment accounts.
Provide Multiple Rent Payment Methods
Speaking of rent payment, sometimes it can be a landlord's fault that they're running into rent collection challenges. Are you making it easier for your tenants to pay you?
If you have only provided one payment method, or you prefer collecting your money in cash, you aren't doing yourself any favors. In today's digitized world, tenants want to have multiple payment methods at their disposal. Online rent payment is especially an important option to provide, seeing that a whopping 84% of renters want to pay rent online, according to Multifamily Dive.
Overcome Rent Collection Challenges
Rent collection, the one task that matters the most to all landlords, should not cause you any stress. Unfortunately, where money is changing hands, trouble is bound to arise. These strategies should help you solve many challenges that will arise, but that's not all.
How about leaving the job to a professional? At PMI Atlanta City, we're rent collection experts. As a full-service property management company that's part of a franchise that's been in the game for over two decades, we have the experience, technology, and personnel to make rent collection at your property a breeze.
Contact us to learn more about our services.
