Rent Collection Strategies: Ensuring Timely and Efficient Payments
On average, a landlord in the U.S. makes about $87,000 a year in rental income. However, this money isn't going to magically appear in your account. You must have a rent collection strategy that works.
Collecting your rent doesn't have to give you any headaches. With a proper plan, you won't have to keep sending payment reminders to your tenants.
Continue reading to learn a few tips and tricks for streamlining your rent collection processes.
Find Reliable Tenants
It doesn't matter whether you're using state-of-the-art rent collection technology or have the strictest rent payment policy, if you have tenants who're not paying rent on schedule, you'll be frustrated.
Yet some landlords skimp on or skip tenant screening. If you're among them, you'll only have yourself to blame when rent goes unpaid. Yes, you can always evict a delinquent tenant, but it's a legal process that will cost you time and money.
Finding tenants who you can rely on to honor their obligations goes a long way to making your rent collection efforts easier.
Rent Payment Policy in the Lease
Some landlords make verbal agreements with tenants about rent payments. Generally, rent is due on the first day of the month, but many states have a five-day grace period written into their landlord-tenant laws. Tenants know this, so it's understandable that verbally asking them to pay their rent by the fifth day suffices.
If you do that, though, you're setting yourself up for trouble. Although oral agreements are legally binding, they're difficult to prove in court. So, don't be surprised if your tenant turns around and says they never agreed to pay a certain amount as rent.
Drawing up a lease agreement is a property management best practice, and ensure your rental policy is clearly fleshed out there. Every tenant who signs the lease agrees to abide by your rules, including late fees and other fines.
Online Rent Payment
Unbelievably, even in today's digitized world, over 50% of rent payments are made in check and cash. These methods are tried and tested, but they present certain rent collection challenges to landlords. If you live several miles away from your rental property, or have multiple properties across the state, collecting the checks and cash can be tiring and expensive.
This is why you need to automate rent collection. With a tenant portal, you can integrate functionality that enables tenants to make electronic payments from anywhere in the world.
On your part, you don't have to visit the tenants anymore. The money will be sent to your collection account in real time, and you'll have live data on who has and hasn't paid their rent.
Let Professionals Handle Your Rent Collection
Taking on the rent collection duty is a good move, especially if you don't have many properties. But there's an option most savvy landlords are settling for: hiring a full-service property management company.
PMI San Diego's mission is to help landlords in San Diego, California, maximize their return on investment. If you'd like to be served by a local company that's part of a global property management franchise with over 300 locations, get in touch!